{"text":[[{"start":8.08,"text":"The $1mn pay rise awarded to Singapore Prime Minister Lawrence Wong this week would have delighted his best-known predecessor."}],[{"start":15.36,"text":"As with many things in the city-state, Singapore’s peculiar and controversial policy of paying its political leaders on par with business executives traces its roots back to its modern-day founder, Lee Kuan Yew."}],[{"start":27.08,"text":"In 1994, Lee devised a formula that pegged pay for ministers and top civil servants to their peers in the private sector to ensure that the government could compete with blue-chip companies and leading law firms for the best talent."}],[{"start":39.92,"text":"The approach has made Singapore’s political leaders the highest-paid in the world, with Wong’s new S$3.6mn ($2.8mn) package seven times the size of Donald Trump’s presidential salary."}],[{"start":51.84,"text":"“It is not the norm in other countries to pay the market rate for the job,” Lee would later reflect. “Wherever we go, we are greatly envied because other countries would like to do likewise. They just don’t have the political strength.”"}],[{"start":64.04,"text":"The policy, perceived as a bulwark against corruption, has maintained popular support over the years but has sometimes proved unpopular at home, especially when costs are rising. Responding to the latest pay rises, which were announced on Tuesday, MP Yeo Wan Ling of the governing People’s Action Party said her constituents had raised concerns."}],[{"start":83.4,"text":"“It was not simply a question about salary adjustments,” she said. “It was a question about timing, and about whether workers feel that we are sharing the same realities that they are experiencing.”"}],[{"start":93.44,"text":"The formula devised by Lee has evolved into a complex model over the past four decades following a series of reviews. The most recent was commissioned in December and its recommendations were accepted by Wong this week. It will come into force next month."}],[{"start":107.72,"text":"The model works by benchmarking a junior minister’s salary against the median annual income of the 1,000 highest-paid Singaporeans and then applying a 40 per cent discount to reflect the sacrifice involved in entering politics."}],[{"start":120.44,"text":"The 1,000 comprises senior company executives, bankers, fund managers and traders, as well as high-paid lawyers, accountants and doctors. The list — though not disclosed — would include Tan Su Shan, the chief executive of DBS, Singapore’s biggest bank, who earned S$9.6mn last year, as well as Goh Choon Phong, CEO of Singapore Airlines, who took home S$9.7mn."}],[{"start":145.8,"text":"By using this formula, junior ministers would see their salary benchmark rise from S$1.1mn to S$1.8mn under the new guidance, but actual pay rises were capped at 9 per cent for this year, so pay levels rose to S$1.2mn."}],[{"start":161.24,"text":"Pay for political office holders is linked to junior ministers’ pay and depends on their seniority. So Wong as prime minister receives double that of a junior minister’s pay, meaning his total package increased from S$2.2mn to S$3.6mn."}],[{"start":175.84,"text":"For parliamentary secretaries, who earn 45 per cent of a junior minister’s income, their new pay benchmark is S$810,000."}],[{"start":null,"text":"
"}],[{"start":184.32,"text":"The pay award is made up of 65 per cent fixed salary and 35 per cent variable income. The latter includes an individual performance bonus as well as a national bonus, tied to a variety of socio-economic outcomes for Singaporeans, including the employment rate, real income growth rate and real GDP growth rate. In 2017, in the wake of falling GDP growth and rising unemployment, the amount paid out in political bonuses hit a five-year low."}],[{"start":211.48,"text":"Wong does not receive a bonus for individual performance as there is thought to be no one to assess his performance, but the national bonus component is double weighted."}],[{"start":219.96,"text":"Without the 40 per cent discount, Wong’s pay would be comparable with the CEOs of Singapore’s 50 biggest listed companies, according to Shai Ganu, global leader for executive compensation and board advisory at consultancy Willis Towers Watson."}],[{"start":233.52,"text":"“There is an alignment with the private sector on variable pay with short and long-term performance targets, but the delivery method is quite different,” he said. “Politicians receive cash deposits in their bank accounts for bonus payouts, while company executives tend to receive equity, which is more of a long-term incentive.”"}],[{"start":250.2,"text":"He added that Singapore could try to replicate that by paying bonuses in the form of long-term government bonds."}],[{"start":255.52,"text":"A key differentiator of Singapore political pay compared with other governments and typical executive remuneration structures is that there are no perks involved, such as grace-and-favour properties, private chauffeurs — aside from Wong on official visits — or even a pension."}],[{"start":271.44,"text":"Wong, who has said he will donate his pay increase to charity for the next five years, defended the policy during a parliamentary debate this week. He said the pay model was not designed to attract those motivated by money but to help big earners in the private sector adjust if they already had significant financial commitments."}],[{"start":290,"text":"“Entering politics would already involve considerable disruption and sacrifice,” he said. “We should not require them to completely upend the financial responsibilities that they have legitimately taken up for their families.”"}],[{"start":302.6,"text":"The example often cited by Lee was that of EW Barker, the minister who wrote the document that confirmed the country’s separation from Malaysia."}],[{"start":null,"text":""}],[{"start":310.64,"text":"He had taken a significant pay cut from his legal practice to join the government and frequently asked Lee if he could return to the private sector as he was unable to pay his mortgage and the school fees for his four children. At the time, senior ministers earned about a third of the pay of top lawyers."}],[{"start":327.04,"text":"Barker ended up staying in his role for 24 years after Lee pushed through the first increase in ministers’ pay since independence."}],[{"start":334.28,"text":"Higher pay makes it less likely senior politicians give up their roles for lucrative private sector jobs, supporting long tenure."}],[{"start":341.68,"text":"The model is also designed to act as a deterrent against graft as well-paid ministers are less likely to take backhanders. There have been just a handful of corruption cases over the past six decades, with the most recent coming to light three years ago. Former transport minister S Iswaran was sentenced to one year in prison for accepting more than $300,000 in gifts as a public servant and obstructing justice."}],[{"start":366.68,"text":"“No one should enter politics for the money,” Wong said this week. “Competitive salaries do not create the motivation to serve. But they can make it possible for someone who already has that motivation in the first place to step forward.”"}],[{"start":384.8,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1789281422_9592.mp3"}