Minister Explains Why Ministerial Salary Review, Which was Due in 2023, is Deferred

If you weren’t aware, a ministerial salary review was targeted for 2023.

However, Minister-in-charge of the Public Service Chan Chun Sing announced that the review has been deferred.

Here’s why.

“Other Pressing Issues” to Deal With

Mr Chan announced the deferment of the review in Parliament on 9 January 2024. 

He said that reviewing the political salaries framework and benchmark will occur “in due course to ensure they remain relevant and up to date”.

Mr Chan was responding on behalf of Prime Minister Lee Hsien Loong to parliamentary questions by Progress Singapore Party’s Non-Constitutency Member of Parliament (NCMP) Hazel Poa and MP Alex Yam (PAP-Marsiling-Yew Tee).

Mr Yam had asked for an update on the review.

As for Ms Poa, she had asked if the targeted review would be carried out on those on the review committee.

Recommendations from the last ministerial salary review were announced in 2018.

Mr Chan said that the government had deferred the review due to “other pressing issues”.

He cited the current global geopolitical climate and economic concerns as reasons for the deferment.

He explained, “In 2023, the global geopolitical situation has become more uncertain, with conflicts in the Middle East and Ukraine, and continuing heightened geopolitical contestation.

“On the economic front, significant uncertainties and downside risks in the global economy remain, impacting our local economy and our wage and inflation outlooks.

“Hence, we decided to focus on dealing with these key challenges at hand and defer the review of political salaries for now.”

In January 2023, Mr Chan said that the next review of Singapore’s political appointment holders’ salaries was targeted for 2023.

How Often Are Political Salaries Reviewed?

The last political salaries review in 2018, carried out by an independent committee chaired by Dr Gerald Ee, recommended that the political salaries framework be reviewed every five years, or when necessary.

It also recommended an upward annual adjustment to match annual benchmark movements of 9% since 2011.

The recommendation suggested setting the annual salary for an entry-level minister at $1,200,000.

This salary includes a 13th-month bonus, a three-month performance bonus and a National Bonus paid out if indicators are met.

It also recommended adjusting the allowance for NCMPs from 15% of elected MPs to 20% to “recognise that NCMPs have full voting rights in Parliament from April 2017”, as explained by then-Deputy Prime Minister Teo Chee Hean.

Notably, the last political salaries review committee was appointed in 2017.

Mr Chan said, “The government did not make any changes to political salaries following the 2018 review as the salary structure remained valid and there were economic uncertainties in the previous few years.”

How Are Political Salaries Calculated?

Political salaries are benchmarked against salaries in the private sector.

According to the Public Service Division’s (PSD) website, the current benchmark for an entry-level minister is based on the median income of the top 1,000 Singapore citizen earners.

A 40% discount is applied to “reflect the ethos of the public service”.

For other political office holders, salaries are determined based on their salaries to MR4.

The salary ratios are supposed to reflect the roles and responsibilities of the different political appointment holders.

For instance, the Prime Minister earns twice the salary of an MR4 minister, as explained by PSD.

Notably, political appointment holders receive only one pay package.

This is regardless of the number of appointments they hold.

The PSD said, “The salaries of political appointment holders will be adjusted according to the movement of the benchmark as it responds to market conditions.”

As of 2023, the benchmark level of a minister’s monthly salary stands at $55,000.

This works out to an annual salary of $1,100,000.

Reason Behind the Design of the Salary Benchmark

According to PSD, though a sense of public service is the first quality the government looks for in a political appointment holder, this is not “sufficient to run a country well”.

Thus, the government looks out for other qualities, such as “organisational and leadership capabilities, capacity to handle multiple responsibilities, ability to solve problems and take charge in a crisis, and the ability to hold his own with world leaders and further Singapore’s interests”.

So, what’s so special about the top 1,000 Singapore citizen earners?

Among the 1,000 chosen ones are those in senior management positions, representatives from financial services, and professionals.

PSD explained, “Looking at the responsibilities of the jobs that these 1,000 hold, this is a reasonable level that reflects the quality and abilities of people that Singapore seeks to bring in as ministers for continued good government.”

The current salary framework was introduced in 2012.

Parliament also endorsed a White Paper on Salaries for a Capable and Committed Government, recommending that the framework be reviewed once every five years.

Misconceptions About Ministerial Salaries

In 2018, Channel News Asia interviewed the chairman of resort developer Banyan Tree, Mr Ho Kwon Ping.

In the interview, he said that he was paid less than ministers.

The interviewer noted that according to Banyan Tree Holdings’ 2017 annual report, his salary, including benefits and a bonus, was more than $2,500,000.

Citing this example in Parliament on 1 October 2018, then-Deputy Prime Minister Teo Chee Hean said that “even knowledgeable and well-meaning people with a deep interest in politics are susceptible to misconceptions about ministerial salaries”.

He told the House that Mr Ho’s salary was “significantly higher than that of ministers and certainly not lower than ministers’ salaries.”

Mr Ho’s statement was used as a case study of a more significant point Mr Teo wanted to make about ministerial salaries.

He said that the topic of ministerial salaries was a difficult one to talk about, adding, “It is an emotional one. There are misconceptions that are sometimes deliberately propagated. It is easily politicised.”

On the same day, Mr Teo said, “The salary structure is totally transparent. There are no hidden salary components or perks.”