Winning back public trust after GE

possible layoff in chemical industryAskmelah’s Note on 22Jan2014: 3 years after the election, the trust level with this Government continues to slip.  Immigration continues to go up, prices of properties continues to rise to record level, construction boom is everywhere, MRT continues to break down frequently, buses continues to pack, now even hospital beds are not enough and Government projects that we need additional 20000 healthcare workers in the next few years. We even witnessed the China bus workers’ strike and Indian workers’ riot in the last two years, a timely wake up call that we can not rely on foreigners completely.  Apologies is cheap when it does not translate into actions. When I see statement like the Chinese top leader not only symbolically talk about, he actually enforce it with conviction. With dedicated leaders as such, no wonder China has been blessed with tremendous growth in the last 20 years! Lee Hsein Loong may have the good intention to do good but he seems to lack convictions unlike his senior. Read also my other blog post Uniquely Singapore? A year of rude awakenings (2013)  and It’s farewell to the golden chopsticks.

 

“President Xi Jinping has inaugurated an era of Chinese abstemiousness and civil servants have been ordered to stop taking bribes, stop wasting money and stop talking nonsense at endless meetings.” – FT.com

 

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Winning back public trust after GE

By Ngiam Tong Dow
Source: The Straits Times,  2 July 2011

THE General Election on May 7 this year yielded the best possible outcome for Singapore. The People’s Action Party (PAP) Government was returned to power with an 81-6 majority although its vote share dipped to 60.1 per cent, reflecting a secular decline. The Workers’ Party (WP) won Aljunied, a Group Representation Constituency.

The greatest value of the WP win in Aljunied is that it breached a psychological barrier, giving a boost to the opposition and its supporters. Politics is about winning the hearts and minds of the people. Trust is the cornerstone. This election shows some chipping away of the trust that past generations of Singaporeans had in the PAP. This was shown, for example, in the way Aljunied voters did not heed the statements from senior PAP leaders warning them against choosing the opposition.

The challenge for Prime Minister Lee Hsien Loong and his colleagues is to win back their trust.

The PAP began as a multiracial grassroots party. Its largely English-educated leadership was supported by the ordinary man in the street, clerks, postmen, technicians, small businessmen, carpenters and barbers. Mr Lee Kuan Yew and his Cabinet colleagues were seen by the electorate as selfless men, sacrificing promising careers for an uncertain future in politics. PAP cadres rode bicycles to hang up election posters on lamp-posts. The party could not even pay for a soft drink.

Former MP Chan Chee Seng told me that they paid out of their own pockets.

The founding generation lived frugal lives. My permanent secretary drew a monthly salary of $1,950, just three times more than mine, a young rookie, at $680.

When the gap between the highest and the lowest paid is excessive, the rank and file become disgruntled. Insolence sets in. Morale goes down. The organisation, whether Government, business, or professional practice, begins its slow decline.

The Government has done most things right. Over the five decades since independence in 1965, Singapore’s per capita income has increased from $500 to $50,000. Unemployment rates have fallen from over 10 per cent to 3 per cent. The Housing Board has resettled and rehoused 85 per cent of the population. Average education levels have been raised from primary to tertiary levels in one generation.

Yet the Government’s popular vote has dropped to 60.1 per cent, close to the psychological tipping point of 60 per cent. I feel that this decline is due in part to the Government’s own policies. Some Singaporeans believe less and less that the Government acts in their best interest. In the earlier years, Mr Lee Kuan Yew’s rallying cry was that no one owes Singapore a living. Despite its hard edge, the older generation believed that then PM Lee Kuan Yew and his Government put Singaporeans first.

Not having gone through the hard times of the earlier years, the young generation today is not willing to give the Government the benefit of the doubt. They judge the Government by its actions, not just promises.

Changes in two aspects of PAP policies can help build more trust: ministerial salary, and being more open about national reserves.

The formula used for benchmarking ministerial salaries to top earners in the private sector is perceived as a case of heads you win, tails we lose. Worse, it is regarded as self-serving.

A better benchmark would be the median income at the 50th percentile. If we can agree that the core role of government is to raise the livelihoods of the people, then the median income is a good measure of the Government’s performance. As a minister’s job is more complex than that of the average wage earner, his compensation can be 10, 15, 20 or 25 times the average. Ministerial salaries can range from $40,000 to $100,000 a month or somewhere in between. This would be about $480,000 to $1.2 million annually.

The Government should adopt a clean wage system and not use incentive schemes modelled on the private sector. Profit may be the measure of performance in a company, but not in a public administration. Using gross domestic product (GDP) as a proxy for performance of the Government and using this as one indicator to determine bonuses for ministers is deeply flawed. For instance, the GDP of Singapore can expand simply by importing more low-cost foreign workers – but this would be detrimental to citizens’ interests. It is good that a committee has been set up to review salaries of ministers and political office-holders.

To my mind, even more crucial than revising ministerial salaries is the need for transparency in the management of Singapore’s national savings.

These are accumulated from Central Provident Fund contributions, budget surpluses, revenue from land sales and dividends from government-linked companies such as DBS, Singapore Airlines (SIA), SingTel, ST Engineering, Keppel and Sembcorp. These enterprises were established with equity from the Ministry of Finance or the Ministry of Defence.

Temasek Holdings and the Government of Singapore Investment Corporation (GIC) are the wealth managers for the Singapore Government. Temasek Holdings was established by the Ministry of Finance to manage the equity investments of the Government, such as SIA, Neptune Orient Lines, DBS and other government-linked companies. Though Temasek was expected to play an entrepreneurial role like its predecessor, the Economic Development Board, it has become more and more of an equity investment manager no different from private hedge funds. In fact, it has sold off some knowledge-based government-linked companies.

Temasek and GIC are profiled in the financial press as Singapore’s sovereign funds. They are not.

They are just wealth managers for the Ministry of Finance. The ministry is the custodian of Singapore’s national wealth. The President exercises custodial powers only over drawdown of past reserves.

There is considerable misunderstanding over the governance of Singapore’s reserves. Few people understand just what the reserves are composed of and which agency is responsible for which portion of the funds. To be sure, Temasek Holdings and GIC do publish annual statements on their funds, even disclosing returns. But these are neither comprehensive nor specific.

The Singapore Government can seek to build more trust with citizens by being more open about the size and composition of the national reserves.

While there is no outcry on the secrecy now, a more open, transparent approach can reduce confusion and dispel any doubts on the issue. I would urge the Minister of Finance to consider publishing an annual audited statement on the size and composition of our reserves. It can be presented as a White Paper to the new Parliament, which is due to begin its term.

The writer is a former permanent secretary for finance in Singapore. This article is based on a lecture delivered on Tuesday at the Nanyang Centre for Public Administration at Nanyang Technological University.

Posted in Ngiam Tong Dow Articles

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My favourite quote today

"I am afraid the cruise ship is over capacity limit, and it used to be a luxury cruise ship. The designer’s claim that it is not sinkable, the name is Titanic. There are not enough life boats, no preparation or provision for failure. Thank you Mr Goh for reminding us." - Low Thia Khiang

"Till today, I am still puzzled by why the PAP cannot fight a fair election without gerrymandering, abusing the GRC system, basically, making sure they enter into a boxing ring with an opponent who is expected to fight them with hands tied behind the back. There is a reason why bullies are not popular in schools. Why not be the school prefect?" - Alvinology

"The question to ask is what lies at the root of the discontent or the disengagement between the G and the people. I am going to stick my neck out and say that it is ministerial salaries. I consider it the root of all evil. Serious. It reduces what should be a social compact into a business contract. " - Bertha Henson