Singapore 2025

I spoke at a public forum hosted by the Young Sikh Association http://www.ysas.org on 9 Jul 2011, alongside Zakir Hussain of the Straits Times, PAP MP Inderjit Singh and Dr Tan Chi Chiu, Chairman of the Lien Centre for Social Innovation, Singapore Management University on the new social compact in Singapore. It was yet another fascinating discussion where I found Dr Tan’s views particularly thoughtful and worthy of greater circulation. Specifically, he shared many insights on how the government could move forward together with civil society.

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Pritam Singh: YSA Speech 9 Jul 2011

Good afternoon ladies and gentlemen. Before I begin I would like to thank the Young Sikh Association for inviting me to share my thoughts with all of you.

From the outset, I would like to say that the public discourse on a new social compact is not something new. The questions that are being posed this afternoon were already being asked by Singaporeans 10 years ago, as the second generation of PAP leaders handed over the reins of the power to the third generation. Let me take you on a short journey, thanks to the mainstream media to make this point.

First, I present an article entitled, “Poor get more help in PM’s new deal” dated 21 August 2001 by then Straits Times journalist and current PAP MP Irene Ng. The article was a reference to then PM Goh Chok Tong’s 2001 National Day rally. The article outlined the new social contract as follows, and I quote, “The new contract continues the emphasis on self-reliance and family ties. But it goes on to say you must work or at least go for retraining, and if you do, the Government will give some support if you earn too little to support your family. And if you fall in the low-income group, you will get more. It is an approach that has been introduced into the system over the years in an ad-hoc and piecemeal fashion, with an announcement of a CPF top-up here, a HDB service and conservancy rebate and worker-upgrading programme there.”

In 2003, Paul Jacob of the Straits Times in a very appropriately titled article called, “Is the social compact changing?” commented (quote) “something has changed when ordinary members of the public take on new ministers and policies. (unquote)” So by 2003, the reality of a more questioning and critical population had been readily noted, and evidently, Singaporeans were no longer just pragmatic individuals.

In 2005, former Chairman of the PAP, Lim Boon Heng, openly noted:

“In the past, better education, better health care and better housing were clearly seen as key components of this social compact. Today, low-income Singaporeans may feel that they are shouldering a higher share of the costs than before.

‘Will this lead to social tension? Not if we can show the lower income that we care and play our part to help them.

‘So, how do we reshape the social compact, without destroying self-reliance and the incentive to work, and without loading the cost on to business?”

In 2006, in an article written by Daniel Buenas in the Business Times, current DPM Tharman Shanmugaratnam noted:

“Not only has income distribution become unequal, but lower-income groups, particularly unskilled workers, have experienced stagnation, or sometimes decline, in their standards of living.’

He added that, if left unchecked, these developments will lead to a breakdown of the social compact required for Singapore to continue to participate in a global economy and reap the benefits of globalisation for the majority of the population. ‘We have to address this,’ he said. ‘Through the CPF system, in particular, we have to continue to do that – saving for the future needs of the lower-income, including their medical needs and their other retirement needs, not just provide for the present.

‘It requires some political stamina. But, well, I think that is the most responsible thing to do.‘”

Now if you forgot what I have said so far, its ok, because now is the time to sit up and take notice of the most lucid and thoughtful analysis of the new social compact that Singaporeans were thinking about over the last decade. The next article I am going to refer to appeared in the Straits Times on 23 Nov 2007. It was written by a gentleman by the name of Yeoh Lam Keong. Today, he is the Managing Director and Chief Economist at the Economic Strategy Dept of the Government of Singapore Investment Corporation (GIC). The article was so profound that the Wall Street Journal and Newsweek found it appropriate to write a piece on the basis of his insights and revelations. And yes, no surprise, the title of Yeoh Lam Keong’s article was “A New Social Compact for Singapore”.

I tried to select appropriate excerpts to share with you, but there is so much of value in that piece towards our discussion today that I have decided to spend a few minutes reading out what he so presiently delivered 4 years ago in 2007:

“Since the late 1990s, a fundamental change has taken place. Median real wages are no longer rising with robust growth. Instead, they have been roughly stagnating since 1998. For the bottom 60 percent of workers, individual wages have, in fact, cumulatively declined by 7 to 15 per cent over the past five years up to last year, despite 5 to 7 per cent GDP growth.

The poorest and least skilled have been the hardest hit. Median monthly starting pay for cleaners and labourers has fallen by nearly one-third, from $860 to $600, between 1996 and (2006). While household incomes especially of the bottom 30 per cent rebounded last year, this is due to jobs being plentiful enough for more family members to work. Yet the poor have to run faster just to stand still. The bottom 30 percent have now experienced stagnating real household incomes for eight to 10 years.

In the long run, this malign combination of median wage stagnation and rising inequality is potentially poisonous for the social compact underpinning Singapore’s virtuous circle of strong governance.

If the median worker faces long-term wage stagnation, the credibility of tough policies – will be undermined. Many will feel their stake in the common enterprise of prosperity has been eroded. What remains may be the bitter, zero-sum politics of envy and dead-end populism.

Current net Workfare payments of around $80 to $100 per month are a long way from being able to bridge the poverty gap between bare subsistence and the small surplus needed to invest in human capital at the household level. Yet Workfare remains the fastest way to get there without compromising the work ethic.

The political will and policy framework to deal with wage stagnation may well be one of the biggest tests of compassion, pragmatism and policy innovation Singapore has faced. However, some subtle risks also arise from our traditional policy distrust of large-scale welfare, or direct social spending to address poverty.

The latter is perhaps more difficult to deal with, as it reflects a policy paradigm that may also need radical change. A stronger, direct social safety net may now need to be seen by both policymakers and the public as an institution that enables policy to take advantage of globalisation more quickly and boldly, rather than one that erodes the work ethic, drains the Budget or hamstrings economic reform.

Can we, policymakers as well as citizens, be bold, compassionate and creative enough to re-imagine and remake our social compact, one that includes a social safety net more suited to the current mega-trends of globalisation?”

The last government official to speak at length on the social compact was current Emiritus Senior Minister Goh Chok Tong at the Singapore-China forum in 2010. ESM Goh explained Singapore’s success through three key elements that defined our social compact. ESM Goh identified our education system, our multi-racialism, and the decision to pay public officials competitive wages as central to our social compact.

So there you have it – six articles sourced from the mainstream media, from 2001 to 2010, some very quite presciently premonitioning the drivers of a new social compact for Singapore. Without doubt, the new social compact did not become a reality after 7 May 2011. It has been in gestation for the last 10 years, under the PAP’s watch.

In the aftermath of the elections, we finally see the PAP responding. Why did it take them this long, that is not for me to say. But during our rally speeches, the Workers’ Party did allude to the reality that the PAP listens to the wishes of the electorate on polling day – your vote is indeed very powerful. In 1991, when 4 opposition members of parliament were elected, the PAP duly formed a cost review committee to address cost of living issues, which were raised by the opposition during those elections.

In the aftermath of the 2011 elections, we have already come to know that three central planks of Singapore’s social compact are being reviewed: HDB policy – any review of which has a direct impact on CPF, healthcare, and ministerial salaries. Lets be clear about it, the shape of the new social compact is in the PAP’s hands. The Workers’ Party, and I am sure many Singaporeans, certainly look forward their recommendations.

Ladies and gentlemen, so far, I have alluded to the hard aspects of the new social compact. Let me conclude, with a view to provoke more discussion later about the soft aspects of this new social compact. For the longest time, from the time of the first-generation of PAP leaders, the public discourse has not been about individuals, but about community.

At its height, this national ideology was framed with a view to reject individualism. But over the last few years, even concepts of community have been shaken with 1/3 of Singapore comprising of foreigners. Some well-meaning Singaporeans fear that we have become more xenophobic. However, this fear of xenophobia may not be a function more foreigners in Singapore, many of whom are not socialized to the no spitting and no littering campaigns of the Singapore many of us grew up in. On the contrary, it is also helpful to remember that we are the third or fourth most densely populated countries in the world today – many Singaporeans also feel a sense of dislocation, unfamiliarity and discomfort with the Singapore they grew up in. Let us not underestimate this emotion as we deliberate and consider what the new social compact will look like. It may well be timely to conceive of the new social compact not only in terms of community as the PAP has done for the longest time, but in terms of what individual Singaporeans like you and me, and I hazard even PAP supporters desire as well.

Thank you very much.

Ms Sylvia Lim (Non-Constituency Member): Mr Speaker, Sir, in the last two days, Members have covered many aspects of this contentious issue of benchmarking Ministerial pay to the private sector at two-thirds of M48.  The Member for Hougang has comprehensively stated the Workers’ Party’s position on this matter.

The gist of our position is that we should instead consider benchmarking based on the remuneration of political office holders in countries which tick.  They generally favour a more moderate use of taxpayers’ money for political salaries, and they do not seem to have run their countries aground.

Today, I would like  to examine a few points raised by Minister Teo Chee Hean in his reply speech yesterday, and also to argue why the benchmark of two-thirds of M48 for political office will ultimately be against the national interest.

First, the point raised by the Minister yesterday.  Mr Teo attempted to rebut the Member for Hougang’s contention that this debate was a waste of taxpayers’ money.  He said instead that this was a hallmark of PAP’s commitment to transparency.  While I do agree that this is an opportunity to have a public airing, the debate arouses a feeling of deja vu, harking back to the other transparent debate about whether to have casinos in Singapore.  This revision is presented to Parliament in the form of a Ministerial Statement under Standing Order where no vote will be taken.  Not one thing  said by any MP will change the decision of the Government.  Personally, I would very much like to hear what each individual Minister feels about taking $2 million of taxpayers’ money home each year, while fellow citizens struggle with the rising cost and taxes.

Secondly, Minister Teo mentioned that it was not right to look at how much political leaders elsewhere earn, because our Ministers cannot become Ministers in other countries. But the comparison is logical because we are comparing similar skill sets and responsibilities, funded by the public.

Looking instead at our benchmark of two-thirds of M48, how valid is it as a measure of a Minister’s worth?  Is it possible that, in fact, some of our Ministers are doing better in Cabinet than they would have done in their previous careers? Can we say that each and every Minister in Cabinet now would have become a top-earning banker, accountant, lawyer, engineer or CEO?  We have all seen instances of civil servants and military personnel embark on second careers in the private sector, and find the business world a whole new ball game and some, in fact, flounder.

Thirdly, the Minister attempted to show that Cabinet salaries were not in the rarefied zone of high flyers by plotting a graph of 1,000 residents and Malaysians.  Even so, l,000 out of the resident workforce of about 1.9 million is less than 0.1%.  To be in this group of 1,000 is already to be in a very privileged few and, as far as the public is concerned, is already in the rarefied zone.

For the remainder of my speech, I would like to argue why the two-thirds of M48 benchmark may ultimately be against the national interest.  Economists have noted that globalisation increases income disparity.  As such, the top earners’ salaries will, in all likelihood, move up further in the future.  A few years from now, two-thirds of M48 may require us to endorse each Cabinet Minister’s pay for $3 million or $4 million annually. As these pay packets are funded from taxes, including poor people paying GST, how far is the Government prepared to go with this? Does it have a threshold of unconscionability?

Next, what makes a good Minister?  There may be differences of opinion but, fundamentally, political leadership is a different creature from administration.  To add value to policy making, the Minister must play the role of politician.  He should understand the public sentiments and aspirations and be able to fund policies and explain things plainly to people.  He must lead not just with the head but with heart. His ground feel of the need of the people and understanding of their plight distinguishes him from the professional civil servant who usually focuses more on efficiency and expediency in implementation.  Indeed, to be effective, a Minister’s EQ may be more important than for him to be part of a Mensa club.  In fact, he would be better if he was wired differently from the top civil servants, to reduce the mistakes perpetuated by groupthink.

Minister Mentor Lee Kuan Yew previously justified why it was not feasible to have foreign talent in the political leadership.  He said that political leadership should “have passion, the commitment and share the same dreams as the people.”  I agree.  The question is: how will two-thirds of M48 affect empathy, the ability of Ministers to share the same dreams as the people?

Ministers are currently drawing about $1.2 million annually, which divided by 12 will be about $100,000 a month.  How does this compare with the average person?

According to a Report of the Labour Force in Singapore 2006, the median gross monthly income of someone in full-time employment is $2,170.  In other words, an ordinary person takes a month to earn what a Minister earns in half a day.  For university graduates, the median gross monthly income is about $4,450.  This would take the Minister about one day to earn.

As we move salaries up to 88% of the benchmark, we will find that the average worker’s monthly pay may be earned by a Minister in a matter of two or three hours.  Does the Cabinet not feel a tinge of discomfort, drawing taxpayers’ money at such rates?  Can Ministers and Singaporeans share the same dream? Another reality is that our leaders may face problems in marshalling the people to make sacrifices for the country.

About four years ago, Minister Dr Vivian Balakrishnan told the House that his son had asked whether one should be prepared to die for Singapore.  This sparked off a heated public debate.  The cynics invariably linked this question to Ministerial salaries. To quote a member of the public, and I paraphrase, “Who are we trying to kid?  Before we start talking about dying for Singapore, let us look at our leaders.  We are told that we cannot get good leaders unless we pay top dollar. So why expect more from the rest of us?”

Citizens should be able to look to leaders for moral leadership and inspiration.  If what they perceive are mercenaries at the helm, then asking them to make sacrifices will be met with cynicism and indifference.  This will not bode well for Singapore’s future. What will happen when crunch time comes?  Is this a time bomb planted for the future of Singapore?

Sir, if we are seriously unable to interest good people into public office, we must ask why other countries can do it and we cannot.  Is it just the money or the fact that we have not invested in creating a culture of high public spiritedness?

In some countries, there are young people who aspire to hold public office. Senior Minister Goh had previously told Parliament that we could not expect Singaporeans to behave like people in other countries because we are a young nation, and people still see things in material terms. How sad! After 41 years of nationhood, National Service, and National Day Parades, what do we teach our children?  Do we judge a person’s worth by his salary? If so, we have wasted millions of tax dollars on these nation-building efforts, which have truly been in vain.

Public service must remain a noble undertaking for which people are prepared to make sacrifices in exchange for the benevolent power to improve the lives of others.  If we corrupt this by money, we can be efficient but never a country of high ideals. As such, I cannot agree with the Members who see political office as yet another career choice.  It must be more than a job and the holder must be able to think of others besides himself.

In the popular American comic strip, “The Wizard of Id”, there was a public address by the King to his subjects from the royal balcony.  The King began, “Remember the golden rule”.  One of the subjects called back, “What’s that?”  Back came the royal reply, “Whoever has the gold makes the rules.”

If the gold is indeed taxpayers’ money, then Singapore is not that far from the Kingdom of Id.  And it does not matter what transparency the Government has claimed in its attempt to justify the pay hike.

Ends.