Ministerial salaries to increase by up to 9% to S$1.2m, lower than review committee’s recommendation
The new salaries will take effect from Oct 15 this year.
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SINGAPORE: Singapore’s political office holders will receive a salary increase of up to 9 per cent, taking the sum to about S$1.2 million annually for a minister in the lowest MR4 grade, Prime Minister Lawrence Wong announced on Tuesday (Sep 8).
Speaking in parliament, Mr Wong, who is also finance minister, said the changes will kick in from Oct 15 this year, after the government accepted the recommendations by an independent review committee that was appointed in December last year.
It is the first time since 2011 that ministerial salaries have been changed.
Mr Wong was delivering the government’s response to the committee’s recommendations for the benchmark salary for a minister at the MR4 grade – the lowest of four tiers – to be raised from the current reference salary of S$1.1 million to S$1.8 million.
The committee also recommended changes to other political salaries and to the allowances of members of parliament and other parliamentarians.
Adjustments to the salaries of the president, parliamentary speaker and deputy speakers will also take effect from the same date, said Mr Wong.
“We will not move immediately to the new salary benchmarks. Instead, we will make a one-off adjustment now of up to 9 per cent for political office holders,” said Mr Wong.
“I say ‘up to’ because the same increase will not automatically apply to everyone. The adjustment for each officeholder will depend on individual circumstances, including performance and when his or her salary was last adjusted.”
Mr Wong explained that for an MR4 minister earning the current reference salary of S$1.1 million, the full 9 per cent adjustment would bring the amount to about S$1.2 million.
There would be no further special adjustments to close the gap to S$1.8 million thereafter, said Mr Wong.
Instead, any subsequent changes will be based on individual performance and responsibilities, he noted.
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MINISTERS’ WAGE PACKAGE
There are currently four ministerial grades – MR4, MR3, MR2 and MR1 – with a range of salary points within each grade which determine a minister’s fixed pay, said Mr Wong.
“As PM, I decide the grade of each minister; where each minister is positioned within the salary range for that grade; and the individual performance bonus each year,” he said.
A total of 10 out of the 16 ministers are currently at MR4.
The other six are at higher grades, reflecting their seniority and heavier responsibilities, including those serving as coordinating ministers.
The three coordinating ministers are Defence Minister Chan Chun Sing who oversees public services, Health Minister Ong Ye Kung who oversees social policies, and Home Affairs Minister K Shanmugam who helms national security. The two senior ministers in Cabinet are Mr Shanmugam and former prime minister Lee Hsien Loong.
Over time, ministers can move to different salary points within their grade based on their performance, said Mr Wong.
“They may begin at the lower end of the salary range. Those who perform well may move to a higher point within the range. Some ministers may also be promoted to a higher grade as they take on greater responsibilities,” he said.
There are also variable components which make up more than one-third of a minister’s annual remuneration, he said.
For instance, a National Bonus applies to all office holders, based on the outcomes specified in the framework.
An individual performance bonus also depends on the prime minister’s assessment of each office holder’s performance. Last year, it ranged from three to six months, said Mr Wong.
“So when we refer to the current MR4 reference salary of S$1.1 million, this is an all-in reference figure. It includes fixed pay together with assumed levels of performance and bonus payouts,” Mr Wong said.
“The actual remuneration received by an individual minister in any year can therefore be higher or lower than the reference salary, depending on his or her salary point and the variable payouts.”
PM DONATES SALARY INCREASE TO CHARITY
In his speech, Mr Wong said that the prime minister’s salary is set at twice the MR4 benchmark.
“I have decided that, for the next five years – assuming I remain PM – I will donate the full increase in my salary arising from this adjustment,” he said.
He will continue to receive his salary as provided for under the framework, and will then “donate the increase to suitable good causes”, said Mr Wong.
“This is my own decision. I do not expect other office holders to do the same. As a general rule, I do not believe in making a public show of charitable giving.”
Mr Wong said that, as prime minister, he carries the “ultimate responsibility” for the salary framework, and so “it is right that Singaporeans should know what I have decided, and that I am taking these changes forward because I believe they are in Singapore’s interests”.
He will review the position again at the end of five years, taking into account the circumstances at that time.
“I fully expect to continue supporting good causes, as I have always done. But I do not want to make an open-ended public commitment, or to create an expectation that future prime ministers may feel obliged to follow,” he added.
STREAMLINING MINISTERIAL GRADES
The review committee also recommended combining the MR2 and MR3 grades into one, bringing the number of tiers down from four to three, said Mr Wong.
The salary range for each grade will also be widened to plus or minus 25 per cent, he said.
“We agree with these changes. But the basic approach to assessing and differentiating individual salaries will remain the same,” he said.
“After the one-off special adjustment, I will continue to assess ministers and adjust their salaries in the usual way, based on performance.”
On that basis, he expects most ministers who remain at MR4 to be at the lower end of the new salary range – about S$1.35 million – by the end of this term of government.
Mr Wong said that those who excel and take on larger responsibilities may move higher within the range, or be promoted to a higher grade.
“So the revised MR4 benchmark of S$1.8 million is not a target salary that every minister must eventually reach. Ministers can be paid above or below the benchmark, within the prescribed range,” he noted.
OTHER OFFICE HOLDERS
For ministers of state, parliamentary secretaries and mayors, Mr Wong said he would “typically consult their supervising ministers on their performance”, but noted that the final decision on their salary points, grades and bonuses rests with him.
New office holders appointed in the next term will likewise come in at different points within those ranges, taking into account their experience and previous remuneration, he said.
This would over time bring a wider spread in salaries compared to today, which is the purpose of the revised structure, said Mr Wong.
“It gives the PM more room to differentiate pay according to performance, and importantly, to bring in people with substantial experience from outside government, especially those already earning significantly more in the private sector,” he said.
While they are still expected to make a “meaningful sacrifice” to enter political service, “we should not make that gap larger than it needs to be”, said Mr Wong.
“Overall, I believe this will give me and future prime ministers a better chance of persuading capable Singaporeans to step forward, and of building the strongest possible team for Singapore,” he said.
The government’s response to the review committee’s recommendations will be debated in parliament on Thursday.
Source: CNA/an(nj)
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