Speech by Deputy Prime Minister Teo Chee Hean at Committee of Supply 2015

SPEECH BY DEPUTY PRIME MINISTER TEO CHEE HEANAND MINISTER IN CHARGE OF THE CIVIL SERVICEPUBLIC SERVICE DIVISION (PRIME MINISTER’S OFFICE)COMMITTEE OF SUPPLY 2015

10 MARCH 2015

Preamble

1. Madam Chairperson, first let me thank Members for their interest in, and support for, the Public Service.

   • Capable and Committed Government

2. First, let me address Mr Edwin Tong’s question on salaries for political office holders. In May 2011, PM Lee had appointed an independent Committee to review the basis and level of salaries for the President, Prime Minister, political appointment holders and Members of Parliament to help ensure honest and competent government. The Committee’s report was thoroughly debated in this House over three days in January 2012, and endorsed by this House.

Consensus on Key Principles

1. In determining Ministerial salaries, the Committee was guided by three key principles:

   1. First, salaries must be competitive so that people of the right calibre are not deterred from stepping forward to lead the country;

   2. Second, the ethos of political service entails making sacrifices and hence there should be a discount in the pay formula; and

   3. Third, there should be a “clean wage” with no hidden perks.

2. Madam, there was consensus in this House, among all parties, on these three key principles. In particular, the Workers’ Party stated that it agreed with the three principles, and accepted benchmarking salaries competitively.This was a fundamental change from their past proposals. This significant change helped the debate to arrive at areas of convergence.

Salary Levels Proposed by Opposition Parties Around the Same General Levels

1. Based on these key principles, the House agreed to the Committee’s recommendations to establish a new framework for Ministerial salaries. Let me briefly recap these recommendations:

   1. One, a new benchmark, which is based on the median income of the top 1,000 earners who are Singapore citizens, with a 40% discount to reflect the ethos of political service;

   2. Two, a new salary framework and National Bonus linked to the socio-economic progress of average and lower income Singaporeans, and not just GDP growth alone[1]; and

   3. Three, removal of the pension scheme for politicians.

2. Based on this formula, the 2011 MR4 benchmark for Ministers was $1.1 million. We set the norm annual salary of an MR4 Minister at this level of $1.1 million. This is the norm total annual remuneration which includes all salary components - basic salary, 13th month, AVC, and all individual performance and national bonuses[2]. This meant an annual salary cut of 37% for an MR4 Minister. An entry-level Minister’s total annual salary would start below that, at $935,000 a year in total.The Prime Minister’s total annual salary was reduced by 36%; and the President’s total annual salary by 51%. With these changes, the President’s annual salary is now 70% that of the Prime Minister.

3. While accepting the three key principles including competitive salaries and benchmarks, Opposition Members had suggested alternative formulas. The Workers’ Party proposed to make Ministers’ salaries a multiple of MPs’ allowances, to be benchmarked to the starting salary of the MX 9 (Superscale) grade in the Civil Service. In actual fact, the MX 9 (Superscale) pool is part of a select group of senior civil servants in senior leadership positions. They made up just 1.2%, just 1.2%, of our 76,000 civil servants then.

4. Importantly, the overall salaries derived by the Workers’ Party proposal were at the same general levels as the Committee’s recommended salary level. The Singapore People’s Party also proposed salaries that were around the same level. In fact, the Singapore People’s Party proposed a monthly salary that was 10% higher than what the Committee had recommended. In short, the proposals by the Workers’ Party and the Singapore People’s Party yielded salary levels that were not significantly different, either in principle or in quantum, from those proposed by the Committee and which Parliament endorsed.

5. The Committee also assessed that the current level of the MP monthly allowance was roughly correct, and recommended maintaining the allowances of MPs, NCMPs and NMPs at about the same level as their monthly allowances then.[3] Neither the Workers’ Party nor the Singapore People’s Party proposed cutting MPs’ allowances together with ministerial salary cuts. The Government concurred with the feeling in the House and left MPs’ allowances alone.

Although some upward movement of benchmark, salary not changed

1. Madam, since 2011, the year-on-year benchmark movement has been moderate, moving up in two of the three years, and down slightly in one year, giving an overall change of around 3% upward annually over the three years that the formula has been in operation. Because the changes in the benchmark have been moderate, we have not adjusted political salaries in these past 3 years. The 2014 MR4 benchmark should be $1.2 million, but we have kept the MR4 norm annual salary unchanged at $1.1 million.

2. Let me summarise the position, Madam Chairperson. One, in January 2012, all parties in this House agreed to the key principles for setting political salaries as set out in the Committee’s report. Two, during the debate, opposition parties in the House proposed salaries that were at the same general levels as recommended by the Committee. * Three, Parliament endorsed the current salary framework which meant an annual salary cut of 37% for an MR4 Minister.

   • Since then, the formula has remained stable and has worked well. The Committee recommended that the salary framework be reviewed every five years.. Given that things have been stable, we believe the framework remains valid, and we can continue to adjust salaries within this framework should there be a change in overall salary levels in the coming years.

3. As Members have agreed, we must continue to keep wages in the public service realistic, and strike the right balance between recognising the ethos of political service and providing a fair salary, to ensure a flow of able and committed leaders into Government to serve Singapore and Singaporeans well, into the future.

Hiring and Progression in the Public Service and Improving Career Prospects for Non-Graduates in the Civil Service

1. Madam Chairperson, I will now address Members’ questions concerning hiring and promotion in the Public Service, and what we are doing to improve the career prospects of all officers, in particular non-graduates as well as to support lower-wage officers.

2. I agree with Mr Inderjit Singh that we need to look at other factors, and not just prior academic performance, in hiring and promotion.

3. The Civil Service offers a diverse range of jobs. When recruiting officers, the Service considers several important aspects, beyond academic qualifications, such as character and motivation, commitment to public service, initiative, and interpersonal skills, to assess suitability for a particular job.

4. Academic or professional qualifications are necessary for certain jobs, for example in medicine, engineering, law or accountancy. For a candidate with no prior working experience, academic qualification can be one useful proxy to assess ability and suitability. But for a mid-career candidate, relevant work experience would be a better proxy. A candidate, who is suitable, will be offered a position commensurate with assessed abilities and experience.

5. After joining the Civil Service, an officer is assessed based on job performance, and is developed and promoted based on performance and readiness to take on larger responsibilities. Officers will have training opportunities to acquire the necessary skills, competencies and knowledge, including academic or professional qualifications. For example, the People’s Association partnered UniSIM to develop a Master of Community Leadership and Social Development to deepen their officers’ expertise in community work.

6. In statutory boards such as the People’s Association and the Inland Revenue Authority of Singapore, graduate and non-graduate officers are already appointed to the same scheme of service. Officers then progress along the same scheme according to their demonstrated performance and ability to take on larger responsibilities.

7. Mr Heng Chee How asked for an update on PSD’s study announced last August, for a single career scheme for Management Executive Officers (MXO) and Management Support Officers (MSO). The study has been completed, and I am happy to announce that we will extend the existing Management Executive Scheme to have a single scheme, with effect from August 2015.

8. Both degree holders and non-degree holders will be recruited on, and progress along, the extended Management Executive Scheme. All officers in the same grade will be assessed for performance and potential in the same way. Officers assessed to have the same performance and potential will have the same opportunities for advancement and career development, whether they are degree holders or not.

9. The extension of the scheme will be accompanied by a re-design of jobs and responsibilities so that the Civil Service can make full use of the abilities and potential of our officers.

10. The Civil Service is aligned with SkillsFuture, and we are committed to supporting our officers to acquire deeper skills relevant to their jobs.

Supporting Lower-Wage Officers

1. Mr Ang Hin Kee asked for an update on upgrading our lower-wage officers. Madam, we remain committed to improving the jobs and skills of our lower-wage civil servants, most of whom are Operations Support Officers in our schools. Last year, PSD partnered the Amalgamated Union of Public Employees and the Ministry of Education to do a study on the work challenges of these officers.

2. We will provide our lower-wage officers with more training opportunities. For example, Operations Support Officers can learn skills that are not just useful in their current job, but can also be applied in other jobs. The Civil Service has a Training Incentive Scheme to encourage and reward officers who upgrade themselves.

3. In support of the National Wages Council’s recommendations, we had in the past three years given built-in wage increases of $60 to $70 per year to our Division IV officers. Taken together with our regular salary adjustments, our lower-wage officers have received total salary adjustments of about $300 to $330 from 2012 to 2014 and this amounts to about a 25% increase in the officers’ monthly salaries, and is over and above their annual increments. Next month, approximately 2,200 lower-wage civil servants will receive a salary increase of $60 to $80, to keep salaries market competitive as part of our regular review of salaries. From next month, their salary scales will also be lengthened so that officers who have reached the previous maximum of their scales can receive further increments as they uplift their skills.

4. The Public Service will continue to work closely with the unions, and make salary adjustments where necessary, while providing our lower-wage officers with relevant opportunities to upgrade their skills.

Strengthening Public Trust

1. Madam Chairperson, Mr Seng Han Thong called for more effective delivery of public services, and asked about engagement and maintaining integrity.

2. Madam Chairperson, the Public Service continues to review areas where we can serve Singaporeans more effectively. Where necessary, we will change the way we work to better meet the needs of Singaporeans. This includes agencies working in a more integrated way. I will cite three multi-agency initiatives because single-agency initiatives have been covered by my colleagues under their Heads.

3. The Ministry of Social and Family Development’s Social Service Offices bring help closer to our residents by working with voluntary welfare organisations and community partners to provide more coordinated social services.

4. The new Municipal Services Office (MSO) ensures that municipal services are well co-ordinated across different agencies and delivered promptly and effectively.

5. The Smart Nation Programme Office will partner various agencies to drive our whole-of-government smart city applications for citizens.

6. I would like to thank Mr Seng for commending our officers for carrying out consultation, in particular our officers involved in the Pioneer Generation Package. As mentioned by the Ministry of Finance during its Committee of Supply debate, our Pioneer Generation Ambassadors will continue their outreach programme, and also reach out to Pioneers who need more specific help through house visits or engagements in smaller group settings.

7. To support good quality policy development and effective implementation, we have been broadening our public engagement efforts, including through REACH’s new citizen-centric platforms. Last year, REACH deployed 23 roving open-concept booths or “Listening Points”, where Singaporeans can obtain information and provide feedback and suggestions on national policies and issues.

8. In addition, REACH uses the Internet and social media to reach out to Singaporeans. REACH received some 32,000 pieces of feedback through its various online channels in 2014.

9. The eCitizen Ideas! crowdsourcing portal which was launched in April 2014 has received over 400 ideas in response to challenge statements posed by agencies. For example, some of the ideas to sustain Pulau Ubin’s rustic charm are already being implemented.

10. My colleagues have also communicated more information on public engagement during the Committee of Supply debate on the Ministry of Communications and Information that has just concluded.

Integrity: Anti-corruption Measures

1. Mr Seng also asked about anti-corruption measures. Our zero tolerance approach against corruption is well-known, and demonstrated through firm action. The number of corruption cases has remained at a stable and low level.

2. We have taken further steps to combat corruption in both the private and public sectors. In January this year, PM Lee announced that the Corrupt Practices Investigation Bureau will increase its manpower by 20%. This is to better deal with an operating environment where corruption offences become more complex and trans-national. CPIB is also stepping up public education and outreach efforts.

3. A One-Stop Corruption Reporting Centre will be set up in the city centre for members of the public to make reports about corruption, and learn more about the challenging journey of Singapore’s fight against corruption, including CPIB’s work.

The Centre will be ready in about a year’s time.

1. Although Singapore remains one of the most corruption-free countries, the fight against corruption goes on.

Conclusion

1. Madam Chairperson, our Public Service is internationally recognised for its excellence, effectiveness and efficiency, with zero tolerance for corruption and wrongdoing. I am confident that our public officers will continue to do their best, and in doing so, maintain public trust and confidence in the Public Service. I encourage our public officers and members of the public to continue to work together, with mutual respect and trust, to make Singapore a better home for all of us.

2. And I thank members for their support for the Public Service as well. Thank you.

[1] The National Bonus is determined by (i) real median income growth rate of the average Singaporean, (ii) real income growth rate of the lowest 20th percentile of Singaporean income earners and (iii) unemployment rate of Singaporeans, besides (iv) real GDP growth rate.

[2] Annual Salary in a typical year = Fixed Salary (13 months) + Annual Variable Component (AVC) (typically 1 month) + Individual Performance Bonus (typically 3 months for good performance) + National Bonus (typically 3 months if targets are met) = 20 months

[3] The Committee recommended that an MP’s annual allowance be 17.5% of the MR4 norm annual salary, i.e. $192,500, which is a drop in allowance of $6,700 or 3% from the 2010 allowance. This reduction was mainly due to the removal of the GDP Bonus. The Committee recommended that the total annual allowance of an NCMP / NMP be pegged to 15% of the MP’s total annual allowance, as had been the practice.