The PM on Paying For Talent !

Excessive Ministerial pay is not there to secure talent. If the government were interested in talent it would want to promote competition and encourage a market place of ideas.

This is what I said when interviewed by Today in 2010, http://sonofadud.com/about-ricebowl/about/interview-for-today-newspaper-in-2010-which-explains-a-little-bit-about-me/

The PAP may be against the two-party system but it’s inevitable, as we have seen in Korea, Taiwan and Indonesia. The problem with the one-party system is not corruption – at least not in Singapore because the Government is not corrupt – but it leads to a society closed to new ideas, with too many “yes men”.

Nothing much has changed since that interview except maybe that women are proving to be the best “Yes Men” amongst the Ministerial ranks and we are realising that the key word in discussion of Ministerial pay is not “corrupt” but “obscene”.  The PAP still takes steps to ensure that only the official point of view is heard. Betraying its Communist roots, the PAP is organised as an old-fashioned monopolist where high pay levels reflect the lack of competition.  Like the cadre system or the nomenklatura system for the Stalinist and Brezhnev-era elite, the payment of economic rent is there to ensure loyalty and a cabinet of yes-men.

Yesterday the PM gave his rationale for our excessive Ministerial salaries. He asked several important questions,

  • Can a future PM continue to get the best and most committed people to serve as his ministers?
  • In fact, can we get the best possible future PM for Singapore?
  • How can our pay system support this important goal?

So far so good but of course for our dear PM these were just rhetorical questions.  In fact he failed to answer them and instead side-stepped and answered some easier questions. That’s disappointing. For me one of the most interesting aspects of the Pay review commission has been the questions asked.GerardEestarted his presentation with the question,

  • What is Singapore?

Gerard answered his question by saying that Singapore is a rock and then used that as justification for the pay levels but the question is one that requires further discussion.  Many Singaporeans would say that Singapore is a Nation of convenience for whoever wants to take advantage of our tax haven and secret banking facilities. A Nation built on a rock by the sweat of our brow for the convenience of others, who now reap our just rewards.

The Prime Minister answers his own  rhetorical questions by going on to say that it was only by paying people well (obscenely well by the standards of what ordinary Singaporeans earn and by the pay of politicians in other countries with similar or higher living standards) that Singapore could get these people to come forward.  There may be public-spirited people among us, PM Lee asked, “But will there be enough of them to produce a whole team of ministers, a whole Cabinet equal to the task and with the standards which we have come to expect?”  (ST, 18th January).

The problem is not the pay structure as a barrier or an enticement. Part of the obstacle to developing talent as I have said elsewhere is the cadre system.

I have also already written elsewhere (http://sonofadud.com/2012/01/05/a-committee-that-cannot-calculate-the-median-of-the-top-1000-is-either-deliberately-misleading-the-public-or-incompetent/) about how absurd it is to benchmark the pay of politicians against the median income (including stock options!) of the top 1,000 earners. Many of these people will be genuine wealth creators who have founded innovative companies or created new products or even whole new technologies. Imagine if President Obama was to say that his pay should be pegged to what Steve Jobs,Mark Zuckerberg or Larry Page earned in any year. I cannot say for certain what reception he would receive but I suspect that it would be universal derision.

A question I would like to see the PM answer is,

How many of the top 1,000 earners are CEOs or top management of government-or NTUC-linked companies or civil servants?”

Since the government sets the salaries of those in the public sector we seem to have an inbuilt mechanism for rampant pay inflation of public-sector managers. The latter are already overpaid compared to their counterparts in the private sector (particularly when job security and pensions are taken into account).

In any case this government should not pretend that it wants talented people to step forward and enter politics. For fifty years they have taken the harshest steps to raise the barriers to entry to politics for Singaporeans and to ensure that those who dared to have different ideas paid an enormous financial and personal cost. In the past they detained people, often for longer than a murderer would receive. When this became difficult after the fall of Communism, they switched to using defamation suits to bankrupt their opponents. Whether justified or not, there is still a perception in most Singaporean’s minds, reinforced by the government’s stifling control over the domestic economy, that standing for an Opposition party or even being a member of one is the kiss of death to one’s career prospects.

In the realm of ideas, the Newspaper and Printing Presses Act and total control of the media ensure that views which do not accord with the ruling party or even the approved Opposition do not get aired. The same restrictions apply to debates and forums. Requirements that political parties register their websites and apply for annual newspaper licences reinforce this. Even in the new social media, the state-run media, aided by their monopoly profits elsewhere, have established a dominant presence and a well-funded and staffed clandestine internet brigade ensures that those who have dissenting views are subjected to the internet equivalent of being shouted down. While this would be fine if there was genuine freedom of expression the fact is that the right of reply is not established anywhere.

The government has never believed that competition is the best way to ensure that we do get the top talent.  Even in the narrow field of electoral competition the government behaves like the convoy system in WWII. In order to cross open seas the smaller weaker vessels were put in the centre and surrounded by battleships and destroyers on the outside. The GRC system allows unelectable newbies, speaking with the voices of entitlement and privilege (Tin Pei Ling, Janil Puthucheary) to shelter beneath the big guns of Ministers and Ministers of State and pass untested into Parliament. Until the last election more than 50% of them could expect to do this without even the formality of an electoral contest. No wonder Grace protested.

I believe the PM is substituting the question of “How do I get the best people to come forward” which is difficult to answer with the easier question of,

How do I get people to come forward who will be loyal yes-men (or women) and not have any views of their own?”

Perhaps the PM is not totally cynical and actually believes he is answering the first question when in fact he is answering the second. He is himself a victim of brainwashing and cannot see that he is confusingSingapore’s interests with those of the PAP. Knowing that loyalty rather than talent is the real objective of the pay system also helps to explain some of the puzzling remarks that have been made by people like Grace Fu. In business people generally want to be compensated for towing the company line and stifling their own creativity and originality. Giving Grace Fu the benefit of the doubt perhaps that is what she meant when she said that cutting the pay of ministers any further might induce her to rethink her commitment to politics. Or her comments may be indicative of cracks within the PAP. Was this a warning shot across the bows? A warning that she didn’t get into this for the good of the country and that if she is not even to be compensated adequately for her loss of privacy, (and the 1,400 negative Facebook comments)  then don’t be too confident on her continued support in the future.

We must ask, would it be so bad if all the Chan Chun Sings and Tin Pei Lings of Singapore were forced to contest in a free and fair election, one candidate per ward, and the majority of them lost their seats. Well normally in a democracy that wouldn’t be a tragedy or a national disaster because equally talented people would be sitting across the hall in team B waiting to serve. It is the PAP’s 50 years of squashing alternative views that has brought us to the current situation.

So PM please drop the sanctimonious humbug about (obscenely) high pay being necessary to induce good people to come forward. If you are genuinely interested in the widest possible talent pool and the best people (whether in the PAP or an alternative government) then you would adopt the following steps (these are just a few of the many suggestions) before paying your ministers top salaries:

  • Abolish restrictions on freedom of expression
  • Dismantle the Newspaper and Printing presses Act
  • Abolish the ISA
  • Abolish the GRC system
  • Reform the defamation laws
  • Remove race from our IC cards
  • Raise the status and profile of the Opposition by creating the title of Leader of the Opposition and paying that person like a minister (as is the practice in the UK and other countries) Give Opposition parties working budgets and office space.
  • Broaden access and funding for scholarships but restrict the monetary component to students from lower-income groups while eliminating the requirement to be bonded. This would reduce “groupthink” while promoting equality of opportunity and hopefully lessening income inequality as well.
  • Support open debate and free thinking. Encourage and support a culture of diversity of views.

Only after that can we start to examine how our pay structure can support talent once it has been identified and nurtured. Then we can start looking at the big questions such as, What is Singapore? What do we want it to be?

About kjeyaretnam

As a blogger I hope to help imagine a model for a New Asian Nation to bring about a free and fair future for Singapore. I'm a Singaporean born and bred and a Cambridge trained economist who could be broadly described as from the Keynesian school. I'm also a successful ex - hedge fund manager and a liberal opposition politician who contested the 2011 General Election with his party. After economics and politics my greatest interests are history, film and makan!

Posted on January 19, 2012, in The market and tagged , , , , . Bookmark the permalink. 9 Comments.

  1. singaporean born and bred

    It’s inevitable that the PAP will one day not form the government. The PAP is standing in the way of our nation’s progress, tied down by assumptions, theories and dogma of its founding fathers that are now increasingly exposed to be inadequate, obsolete and worse, plain wrong-headed. It takes time for the voting scales to tilt away from the PAP, but once the weights shift there will be no coming back.

    • @Singaporean born and bred. Yes it is inevitable yet I remember how soundly I was attacked for saying that when I first entered politics. The role of the opposition is to be prepared to form an alternative government but only three years ago people were aghast when I said this. The talk then was and now still is of tweaks and a voice a balance. The scales have already tilted. Only three years ago democracy was another dirty word. The talk then was of a special kind of Asian democracy suitable for Singapore or that democracy was Western and somehow destructive. I had always cited our democratic Asian neighbours and numerous non Western democratic Nations but the Arab Spring really finally nailed the lid down on that piece of brainwashing. So when I look back at the changes and what is acceptable now compared with even three years ago then yes, I think the balance is tipping. Even small seemingly undramatic steps such a seeing that every seat is contested, has a major effect. What we need to do now is to continue to press for more political reform to give us robustly independent structures and to remove the barriers to Opposition and freedom of expression. Having removed the barriers we need to actively nurture a strong, independent Opposition. Then we need a Free Press, independent judiciary and all the rest. Whilst we do all of this we must be aware that the PAP has an internal structure (not just a mindset) that makes them incapable of change. The PAP will do anything to ensure survival. Therefore we must be vigilant and keep an eye out for the PAP ‘B’ team which will be sent out to infiltrate the Opposition so that the PAP can maintain its grip under another guise.

  2. Most likely the cabinet will do another round of adjusting the whole package 1 year or few months before the next election, though still quite high, make it in such a way that it will not become hot topic for opposition party to sustantial votes. But for sure, the cabinet still insist on they make sacrifice in order to give false picture that they have moral compass till their last day in power.

  3. Nice, Ken! I enjoy all your posts. It’s been 8 months since the watershed GE2011. There have some changes. However, I find that the PAP has not changed any fundamental policies despite the PM’s promise of change. Catherine Lim is right. There is little hope that PAP can reinvent itself. PAP may be ousted out in GE2016 unless the real change materializes, and quickly. Otherwise, PAP may be history by 2016. Hopefully, the PM is reading this post …

  4. What do you get when you have “talents” in our Parliament?
    You get a public train system who makes millions by setting up Kiosks and Satellite mini-shops and raising fare prices but not service levels. The system then protested by breaking down irreparably.

    You get a big billion dollar payout in terms of Stamp Duty, when you manage Public housing pricing and inject 1 million immigrants under 10 years. You get HDB car parks being rented out to BMW, Mercedes and other car sellers, saying it is underutlised, and then you start to plan to build auto-sorting multi-storey pigeon-hole carparks. Profits speaks louder than common people’s needs.

    What you get for talents paid at obscenely high salaries, are creative ways to make money, money and more money. For whom? For that S$500 bonus to each citizen, and maybe upto S$1000 to the poor families, etc.

    To me, it is not worth it, not worth it to sacrifice Singapore for this meagre kopi money, especially when a plate of char kway is rumoured to become S$10 soon.

    Give me back my old Singapore of 1980s….
    We may be less rich, but we were wealthy in Singapore culture and Singaporism.
    Now, we are just rojak, and a piece of pee sai.

  5. They also want to accumulate enough for their progeny to emigrate to Switzerland if the Red Dot should turn black.
    If just by paying them enough, we can get the talent, I wonder how much MORE we could have paid (before May 2011) to have avoided Wong Kan Seng, Mah Boh Tan et al. It is not like we cannot afford to, and by paying even lesser now, are we preparing for better horror Ministers? But my understanding is that payola is never for talent, rather it is more like a division of spoils or sharing of loot after conquests.

  6. what is singapore?
    ans: high class brothel…

  7. Koh Kee Sen Matthew

    Telling the PAP to reform the Presses Act, ISA etc is like telling them to stop being PAP, wind-up the party and dissolve into thin air. The PAP machinery is like a “Rock” . It needs to be “weathered” away by the elements. So, we need the Opposition; True opposition like RP to knock some senses into their thick skull. All “rock” formations will succumb to weathering in a matter of time. Come GE2016, we must unseat PAP from power. The “money-making” culture of PAP government will frustrate the electorate and eventually result in the PAP’s downfall.

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