Singapore Prime Minister’s salary up 5,200% since independence

For a country which is only 49 years old, the central message of PAP leaders is ‘greed is good for Singapore’. Just take a look at how political salaries have been increasing like ‘nobody’s business’.

42 years after independence, the PAP had increased the PM’s pay by 7,300% to $3,090,000. When Singapore gained independence in 1965, our PM’s salary was $42,000 ($3500 X12). It was only after huge election losses in 2011 that political salaries were reviewed. Althouth citizens were given a ‘discount’, our PM’s salary is still 5,200% ($2,200,000 / $42,000) higher than since independence.

Contrary to public perception, the PAP did not peg political salaries to the private sector in 1994 but had already been doing so since 1970. In 1970, Lee Kuan Yew, then PM, told Parliament that Law Minister E.W. Barker had wanted to leave politics because “he could not afford his mortgage” which was based on Barker’s former income as a lawyer (private sector).

Lee also wanted to “appoint Hon Sui Sen as Finance Minister”. Hon Sui Sen, a Hakka who had studied at Raffles, used to head the DBS bank.

The reasons given by Lee – it was “not fair” and “unrealistic” to be earning low political salaries when compared to the private sector. Lee also claimed that “family needs are also pressing”.

Parliament agreed to raise the pay of ministers by 80% (from $2,500 to $4,500) to align it closer with the private sector. Of the 64 MPs in Parliament, 62 were from the PAP.

What’s more shocking was the PM’s pay had been increasing at a faster clip than ministers’ pay.

For a factual historical account of ministers’ salaries, read Andrea Ong’s “What price a minister? 42 years of controversy”.

Chronology of our PM’s salary increase since 1970

(from 1970 to 1994 monthly salary)

1970– Ministers’ salary increases by 80% from $2,500 to $4,500. PM’s salary remains at $3500 to “demonstrate his commitment to the policy of no wage increases without productivity growth”. (note our productivity growth has been dismal during the last 3 decades but PM’s salary went up almost 1000% since 1984)

1972– NWC is formed, recommends ‘13th month bonus’. (Adopted by the public sector, ministers’ salary effectively increases by 8.3%.)

1973– PM’s salary increases by 170% from $3,500 to $9,500. (ministers’ increase by 55% from $4,500 to $7,000)

1981– PM’s pay increases by 79% to $16500. (ministers’ increase by 79% to $11500)

1985– Lee offers another reason – “to keep political leaders clean and corruption-free”.

1989– PM’s salary increases by another 200% to $49,608. (ministers’ by 149% to $28,644)

1994– PM’s salary increases by 94% to $96,000. (ministers’ by 123% to $64,000)

(yearly salary from 1995)

1995– PM Goh’s increases by 39%, or $450,000, to $1,600,000.

2000– PM’s salary increases by 23%, or $364,000, to $$1,940,000.

2007– PM’s salary increases by 59%, or $1,150,000, to $3,090,000.

2011– PM’s salary reduces by 29%**, or $890,000, to $2,200,000.

The table below is a summary of PM’s salary since independence.

* Salary from 1973 includes “13th month bonus” implemented in 1972.

** Figure of 36% reduction in the press includes pension. PM’s total pay in 2010 was therefore much higher than $3,072,000 because pension was not included. Including PM’s pension, his total salary in 2010 was $3,305,920. (36% X $3,072,000 = $1,105,920. $1,105,920 + $2,200,000 (new salary) = $3,305,920)

PAP became more brazen with each unopposed PM’s salary increase ie with each successful increase, the absolute amount increased. PM Goh’s annual salary jumped $450,000 from 1994 to 1995 for no rhyme or reason. After the increase of 39% within a year, Goh said he would forgo “any salary increase for himself for five years”. This is nonsense.

Let’s put the salary increase in perspective. In the 1970’s, a new HDB 3-room, 4-room and 5-room flat in Marine Parade cost $17,000, $20,000 and $35,000 respectively. PM’s salary increase of $81,000 could buy two 5-room flats, with some furnishing thrown in, or even a landed property in some areas. Ordinary citizens had to take 30-year mortgages so where was PAP’s sense of proportion?

Lee Kuan Yew ‘invented’ many ridiculous justifications for each salary increase. Lee told Parliament in 1970 that his pay would “remain at $3,500 to demonstrate his commitment to the policy of no wage increases without productivity growth”.

In 1973, without a corresponding increase in productivity, Lee’s pay increased by 170%.

In 1981, Lee’s justification for the humongous pay increase (ministers’ and his) was “times have changed since the revolutionary conditions of the 1950’s and 1960’s”.

In 1985, Lee introduced yet another reason – “to keep Singapore’s political leaders clean and corruption-free”.

In any true democracy, this would never have happened. The PAP was emboldened by its ‘success’ in getting the salary it had demanded; in 1989, it attempted to introduce “make up pay” to attract ‘talent from the private sector. ‘Make up pay’ was a maximum of 90% difference between the old wage of PAP’s new-found ‘talent’ from the private sector, payable for up to “two terms of office”, eg minister’s salary of $1 million and PAP’s ‘talent’ old wage in private sector $3 million, taxpayers would need to pay an additional $2 million ($3 million minus $1 million) or up to $20 million (2 terms = 10 years, 10 X $2 million).

The PAP did not have in mind just 1 such ‘talent’ from the private sector. It could have cost taxpayers hundreds of millions of dollars for just 1 term in office. The proposed policy was, fortunately, not implemented.

As the leader of the country, Lee shocked the country by claiming he was “a ‘kept man’ all his years in public service, with his wife and three brothers in the private sector earning more than he does”. Lee’s wife had a successful law firm, Lee and Lee, and with Lee’s pay, it was sufficient for a life of luxury for his family. Greed had overwhelmed Lee and he seemed to have this sense of entitlement to an increasing amount of tax dollars while exhorting citizens to be self reliant.

No citizen had forced Lee to accept a will-never-be-sufficient salary and nobody ‘kept’ him in office. Lee was free to leave but he had deemed himself to be able to “govern much more effectively”. Lee could have joined his wife and three brothers to earn more but had choses to stay in politics. In truth, nobody can be certain about the future. Whether Lee could have been successful without having the tremendous power he wielded as the PM is really anybody’s guess. Businesses do flop so one should not simply assume a rosy scenario if Lee had gone into the private sector.

What we do know is Lee had been dependent on the goodwill of Singaporeans and has earned more than $50 million in tax dollars.

Lee Kuan Yew’s salary (47 years in Cabinet)

* From 1990 to 2011, Lee was SM and MM. $2 million is a conservative estimate of Lee’s pay.