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     FrontPage Edition: Fri 23 March 2007

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Paying our public servants competitive salaries



An Excerpt
For the Public Service to remain an attractive employer, our terms must keep pace with the private sector.
That is why our policy is to pay public servants competitive salaries, commensurate with private sector earnings.
Salaries in the private sector have been moving. Many good and well-paying jobs have been created, especially in the last two years.
A recent world-wide survey conducted by the employment agency Manpower Inc. showed that Singapore employers are the most bullish among 27 countries about the employment outlook.
Specific industries are doing very well, such as finance, where there is strong growth in wealth management and private banking. Other sectors are also on the move, with increasing demand for lawyers and IT professionals.
The demand for Singaporeans is not just coming from our own economy. Because of the Singapore brand name, our people are being talent-hunted to work all over Asia.
Many CFOs in China are Singaporeans, because of our reputation for competence and integrity.
We know from head-hunters that the entire top managements of some of our agencies are being targeted. The Middle Eastern countries are particularly interested. They have studied Singapore¡¯s success story. They want to tap our people to join them and replicate the miracle, and money is no object.
Even foreign workers who have worked in Singapore shipyards here are in demand in the Gulf. We even received a feeler from one Middle Eastern country to buy the whole of JTC!
All this will have an impact on the Public Service. In terms of salaries, generally we have tried to keep pace with the market, but the situation is uneven across the services.
Some services have built-in market adjustment mechanisms that have kept them in line. Others like the Education Service have recently made adjustments.
However, some services have fallen significantly behind the private sector. They may need not just salary revisions, but also restructuring of their schemes of services, such as the Management Executive Scheme for graduates.
The Administrative Service is one of those that have fallen behind. Administrative Service salaries were last adjusted in 2000 ¨C seven years ago.
There are two private sector salary benchmarks for the Administrative Service.
One is set at SR9. This is the lowest Superscale grade, at which officers in their early to mid 30s enter the senior ranks of the Administrative Service.
This benchmark dipped from 2001 to 2004, but has since climbed again. It now stands at $361,000, about the same as what it was in 2000 ($363,000). Actual SR9 salaries were cut more sharply than the benchmark between 2001 and 2004, and have since been restored. Current salaries are in line with the benchmark.
The second benchmark for the Administrative Service is set at Staff Grade I. The most senior Permanent Secretaries can be appointed to the Staff Grades.
The benchmark is defined as two-thirds of the median income of the eight top-earning professionals in each of six professions ¨C bankers, lawyers, accountants, MNC executives, local manufacturer executives and engineers. Present Staff Grade I salaries are at the same level as the benchmark in 2000, when it was $1.21 million. But now the benchmark is $2.20 million.
These latest benchmark figures are based on income tax returns in the Year of Assessment 2006, which means incomes actually earned in 2005. In the two years since then, private sector incomes have most probably risen further.
This is an urgent problem. We have experienced on previous occasions the painful consequences of responding too slowly when the private sector surged ahead. For example in the early 1990s, the Administrative Service lost entire cohorts of good officers. This showed up in the age profile of the Service ¨C broad at the young and older age groups, but narrow at the mid- to late-30s range. We took many years to recover from the loss. This must not happen again.
The SR9 grade is crucial as it is a key milestone which able AOs in their early 30s look towards. Although we appear to be alright at this level, in fact I believe we will soon come under pressure.
We know that the market for young professionals is moving, particularly in the financial sector, and this will eventually show up in the benchmark. We must keep the SR9 salary market competitive to retain able officers at a critical decision point in their careers. For Staff Grade I, the present salary is at 55% of the benchmark, and we have to close this gap.
This is why the Government is currently reviewing Civil Service remuneration schemes. The review will cover the Administrative Service as well as other services that are lagging behind the private sector, because every service is important, and each must be able to attract and retain good people.
Besides Civil Service salaries, we are also reviewing salaries for the political, judicial and statutory appointment holders.
It is even more critical for us to keep these salaries competitive, so as to be able to bring in a continuing flow of able and successful people to be ministers and judges.
Unless there is a first-class political leadership and judiciary, the Civil Service, however capable and dedicated, will not be able to function properly.
Minister Teo Chee Hean will announce the salary changes in a Ministerial Statement in Parliament on 9th April.

Full Text of Speech

Source: Media Release 22 Mar 2007

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