The first formal method to benchmark salaries for ministers was established in 1994, with a White Paper on 'Competitive Salaries for Competent and Honest Government'.
Under the framework, an entry level minister's annual salary was pegged to two-thirds the average salary of the top four earners in each of six professions, namely bankers, accountants, engineers, lawyers and chief executives of local manufacturers and of multi-national corporations.
Prior to 1994, ministerial salaries were set by making informal comparisons with the private sector.
In 2000, the entry ministerial grade (MR4) benchmark was fine-tuned to make it more stable.
The benchmark's base was broadened by using median income, instead of average income, and a 50 per cent discount on gains from stock options was provided for.
This means the benchmark pegged the annual salary of an entry level minister to two-thirds the salary of the 24th highest earner, from among top eight earners from each of the six professions chosen earlier.
This salary benchmark remains in use today.
Ministerial salaries review committee's proposal
The committee to review ministers' salaries has recommended wage cuts of between 36 and 53 per cent for political appointment holders.
The Speaker of Parliament's wage will see the largest percentage cut of 53 per cent, to $550,000.
The committee also proposed the removal of political appointment holders' pension schemes and a new benchmark for entry level minister salaries.
Other recommendations of note:
- Ministers' pension scheme to be removed
- President may see 51% pay cut
- Committee recommends 3% pay cut for MPs
The proposed formula for a junior minister's pay will be the median income of the top 1,000 earners who are Singapore citizens.
A 40 per cent discount will then be applied, working the pay out to be S$1.1 million per year.
This was revealed on Wednesday by the Ministerial Salary Review Committee chairman Gerard Ee, who also elaborated on how the committee arrived at the formula and the impact on attracting talent.
Mr Ee said the figures were no "magic numbers".
PM Lee says government intends to accept wage cuts
Prime Minister Lee Hsien Loong said the government intends to accept the recommended wage cuts put forward by the salary review committee in its report, which was released to the public on Wednesday.
In a letter addressed to Mr Gerard Ee, the committee's chairman, PM Lee said that the report will be published as a White Paper and Parliament will move a motion on Jan 16 to adopt it as the basis for setting political salaries.
Opposition members respond to pay cut
Chairman of the Workers' Party Sylvia Lim said her party is studying the recommendations and will also respond in due course.
Similarly, Non-Constituency MP Lina Chiam from the Singapore People's Party said she is studying if the changes will benefit Singaporeans.
The Singapore Democratic Party (SDP) said it welcomed the proposed removal of pensions but it is still unhappy over the overall pay package.
SDP's James Gomez said: "However, at the SDP, we feel that the quantum is still extremely very high. I don't think the new Singaporean politician who wants to bring Singaporean issues forward is motivated by monetary incentives."
"Comparing the new salary levels for an entry level minister, S$1.1 million, that's already higher than the salaries of prime ministers and presidents in other developed countries."
President, MPs react to pay cut
Singapore's President Tony Tan Keng Yam has welcomed the recommendations of the Ministerial Salaries Review Committee announced today.
In a statement, a spokesman for the Office of the President said Dr Tony Tan has informed the prime minister he will adopt the president's salary as recommended by the committee, backdated Sep 1 last year, the day he was sworn into office.
Meanwhile, Member of Parliament (MP) for Jurong Group Representation Constituency (GRC) David Ong said: "Personally, for me, with the reduction of the MP allowance and removal of the GDP Bonus, it won't affect my performance at all, as an MP ... I'm elected to serve the people of Singapore, my residents in Jurong GRC, and I'll continue to do that."
Readers' responses mixed
Member of public Soh Boon Guan expressed his scepticism on the proposed pay cuts in comparison to salaries of ministers in other countries and posted: "Our junior ministers' pay can hire two United States (US) presidents to work for us."
Another member of public, Wong Li Ping, remarked: 'Good enough. Let's not ask for too much."
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