The Truth Behind Singapore's Public Policy Administration

http://groups.yahoo.com/group/Sg_Review/message/1455

Mellanie Hewlitt
The Truth Behind Singapore's Public Policy Administration
Singapore Review
21 Jan 2005

Government led "Family Friendly" benefits and "Flexi-work" arrangements often look good only on paper but find very limited application outside of the civil service in the real pressure filled world of private sector firms and MNCs. This was the bitter lesson learnt by Ms Lim Ai Ling when she attempted to cash-in on her "Family Friendly Benefits" and instead opened a can of worms. Ms Lim found to her horror that a "Flexi-work" public policy does not mean flexi-work arrangements in practise.

Ms Lim's mistake is quite understandable. Many of us assume that public policies are more than mere rhetoric and take them at face value especially when they are enthusiastically reported in the local government owned papers. We mistakingly assume that a "Family Friendly" public policy translates into more quality time with our loved ones. But the truth is hard to swallow in Singapore. Few realise that most of the policies are mere publicity stunts devoid of actual substance and one relies on them at his or her own peril.

To be fair, many firms and Multinational Companies (MNCs) will endorse these government led "family friendly" % "flexi-work" packages as part of their standard employee welfare program. But they are also faced with budget constraints and the constant pressure of keeping costs down and achieving a larger workload with the same (or even smaller) number of workers.

Family Friendly = More Time With Family = Less Time in Office
What the PAP and Singapore's highly paid ministers fail to realize is that we cannot eat our cake and have it. For every choice made there is an underlying opportunity cost. Most private sector MNCs have already optimized workflows and streamlined work protocols so only very little room is available for further rationalization exercises. In a fast moving work place like this, the opportunity cost of implementing a family friendly work environment translates into;

a) Shorter Work hours;
b) Lighter work loads;
c) Employing more staff to do the same amount of work;
d) Increased labour costs and head-count;
e) And ultimately a less competitive Singapore work force (and infrastructure).

The logic behind the above is part of Introductory Economics 101;- When a company is given fixed (and limited labour resource units), if one factor of production is increased while the others remain constant, the overall returns will relatively decrease after a certain point. http://www.encyclopedia.com/html/d1/diminish.asp

The bottom line is that many department heads, and employers are unwilling to accept the above costs which will ultimately eat into the net profit and overall financial performance of a firm. The accepted norm in Singapore's MNCs is to "over leverage" on fixed labour resources so that the department is actually operating on the declining segment of the Total Productivity curve. Needless to say this is an inefficient allocation or resources as the mix of resource units are not optimized. But this is of no consequence to most department heads as their only sole objective (to the exclusion of all else including worker welfare) is to keep labour costs down.

In this flawed strategy, worker welfare (and Family Friendly Benefits) are interests that directly conflict with the balancesheet / P&L needs of the company (and the state).

Unfortunately, the same flawed strategy is adopted by the Singapore government albeit on a larger scale. On a small island with no natural resources, the only "resource" which is saleable in order to attract foreign investments is HUMAN LABOUR. But if this is the case and the average worker should be of prime importance to the overall well being of Singapore Inc, Management should implement more friendly work policies. Instead, the average worker is exploited and they seem to be intent on killing the goose that lays the golden egg.

Past examples of the PAP Government's "Family Friendly" policies include;

1) Cutting Employer's CPF: Implementing across the board wage reductions (in the form of unilateral cuts to employers CPF contribution). This was a policy which the PAP government imposed harshly with the full knowledge that government census figures showed that most Singaporeans workers are still dependent on CPF contributions to pay-off their mortgages. See: http://groups.yahoo.com/group/Sg_Review/message/618 and also http://groups.yahoo.com/group/Sg_Review/message/638

2) No CPF Restoration in Good Times: During a subsequent economic recovery, this same government did not restore Employers CPF contributions. The ministers of cause restored their own salaries (though it was highly questionable if they ever took a wage cut in the first place. See http://groups.yahoo.com/group/Sg_Review/message/1234 But the buck literally stopped before it reached the average Singapore worker.

3) Singapore is a very expensive place to call home. Its ok if you are just "passing through" as an expat, but the story is different if you try settling here for good. See: http://groups.yahoo.com/group/Sg_Review/message/1074

4) Singapore Workers Over Paid; Inspite of para (3) above, this same government also came to the rather far-fetched conclusion that Singapore workers were more well paid than their counterparts in the US, UK and Australia (see: http://groups.yahoo.com/group/Sg_Review/message/577

5) Singapore Workers Cannot Retire: Contrary to the assertions of the government in para (4) above, it is a fact that Singaporean workers will not have enough in their savings to retire on. See: http://groups.yahoo.com/group/Sg_Review/message/1413

6) State Enterprises Live Off Workers: Decades of huge hidden fiscal surpluses enrich the Singapore government and state enterprises but impoverish the private sector and tax payers. See Far Eastern Economic Review: http://groups.yahoo.com/group/Sg_Review/message/1153

7) Its a Crime Not To Top-Up CPF; This same government has made a crime if you do not top-up your CPF. Only in Singapore is it possible to be taken to court if you owe yourself money. See: http://groups.yahoo.com/group/Sg_Review/message/1305

Of cause the problem here is that there maybe afew kind unsuspecting souls who actually swallow this entire sales pitch, hook line and sinker, which brings us back to the sad story of Ms Lim Ai Ling.

Then again, with Human Labour as Singapore Inc's only available product, do you honestly believe that management of Singapore Inc will endorse policies which will degrade the quality and standard of its sole product (and life line)? This government's unspoken stand on bread and butter issues is that the welfare and well being of the average worker is subordinated by those of the "larger" and more "pressing" concerns of the state. Like the usual Stalin and Marxist model, the average Singaporean worker is expected to make sacrifices for the "larger good" of the state.

This perspective also sits well with the government's current anti-labour policies which favour labour representation by a sham labour union (NTUC). The existence of strong and real labour union representation would not agree with a management strategy which has the objective of keeping Singapore Inc's sole product price competitive (i.e.cheap) and attractive. There is a negative correlation between quality of life and attractiveness of Singapore Inc's prime product.

In order to placate workers, what we get from "Management" of Singapore Inc are a series of measures which look good on paper but were never intended to see real actual application in the real work place in the private sector. This also explains the reason why there is the very conspicuous absence of any real bona fide labour union representation here.
see: http://groups.yahoo.com/group/Sg_Review/message/1399

With unemployment rates remaining at 4.5% p.a. (which sit strangely beside reports by the local press of a local economic recovery), the status quo in the job market is decidedly in favour of the employer. Unlike other developed countries like the US, UK, Australia etc, Singapore is not a welfare state, so in the absence of real tangible labour union representation the employers hold all the cards on the negotiation table. In view of the current conditions desperate workers with mortgages to pay are willing to accept lower pay, longer work hours and more stressful work conditions.

The Singapore government has never been a strong proponent of human rights (and free speech) so this Stalin/Marxist styled mentality in public policy administration is also hardly surprising. However, this imperfect state of affairs might be easier to accept if Singapore's Ruling Elite also led by example. But this was not the case as Singapore's current ministers have conveniently exempt themselves from the same policies on wage restraint which they cavalierly impose for the rest of the population.
see: http://groups.yahoo.com/group/Sg_Review/message/1373
http://groups.yahoo.com/group/Sg_Review/message/1360

What happens if the average unsuspecting worker takes the "Family Friendly" and "Flexi-work" policies of the PAP government at face value and attempts to actually see these policies through to actual implementation? Ask Ms Lim Ai Ling who was finally retrenched for all her efforts.

We circulate below article from Lim Ai Ling which should be read keeping in mind the overall larger "labour friendly" policy mix of the Singapore Government. There is more than meets the eye in the shady world of public policy implementation and there is a lesson to be learnt in this for all would-be believers.

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Today
20 Jan 2005
Lim Ai Ling

HERE'S WHY FAMILY-FRIENDLY BENEFITS DON'T FARE WELL HERE
--------------------------------------------------------
I refer to the report, "Flexi-work arrangements still limited" (Jan 18).

It's not surprising that the family-friendly benefits did not fare well in
Singapore.

I was in the IT line. I had tried to ask my former employer, a big local
company, for a flexi-work deal so I could spend more time with my son.

I asked to work from home, but my request was turned down.

Then I tried asking to work four extended days in a week with one day off,
another proposal that was turned down.

This is unlike in the United States or the United Kingdom, where employees
have been able to persuade employers to let them use the Internet to work
from home, as noted in the News Comment, "From home to work with a mouse
click" (Jan 14).

Finally, I was asked to accept a retrenchment package while I was pregnant
with my second child.

My manager told me it was the best arrangement as, with the money, I could
stay home and look after my kids!

Letter from Lim Ai Ling

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Singapore Ministers pay - Legitimized Corruption

· Commentary on Ministers pay cut
· Singapore Review, 2 May 2003
· By Mellanie Hewlitt

· The headlines blared loudly in the 2 May 2003 issues of the Straits Times and Business Times "Pay cut? Ministers ready to lead by example: DPM", announcing to the entire world this selfless act of leadership by Singapore's Ruling Elite.

· In what appeared to be an initial move to reduce severely inflated salaries, to more reasonable industry standards, Singapore's Ruling Elite have bowed to public pressure and hinted at accepting a pay cut.

· Or have they?

· What exactly does "Leading By Example" mean? Lets try to put some substance behind those brave words. As of last count, average take home pay of a Singapore minister was well in excess of SGD100,000/- a month.

· The below table puts things back in proper perspective: (these are basic figures as of July 2000 and did not include last year's pay hikes or other benefits. Otherwise the updated numbers may well be much larger)

1. Singapore Prime Minister's Basic Salary US$1,100,000 (SGD1,958,000) a year Minister's Basic: US$655,530 to US$819,124 (SGD1,166,844 to SGD1,458,040) a year

2. United States of America President: US$200,000 Vice President: US$181,400 Cabinet Secretaries: US$157,000

3. United Kingdom Prime Minister: US$170,556 Ministers: US$146,299 Senior Civil Servants: US$262,438

4. Australia Prime Minister: US$137,060 Deputy Prime Minister: US$111,439 Treasurer: US$102,682

5. Hong Kong Chief Executive : US$416,615 Top Civil Servant: US$278,538 Financial Sec: US$315,077

· Source: Asian Wall Street Journal July 10 2000

· In relative terms, less then 20% of Singaporeans here have take home salaries exceeding SGD100,000/- A YEAR.

· In stark contrast, BASIC SALARY FOR A MINISTER STARTS AT SGD1,166,844 A YEAR,OR JUST UNDER SGD100,000 A MONTH.

· What these ministers earns in just ONE MONTH exceeds the ANNUAL TAKE HOME salary of 80% of Singapore's income earning population. Lets not even begin to compare annual packages which will exceed SGD1 million easily.

· With the above numbers and figures now in perspective, it is easier to give substance to the words "leading by example". Several facts are noteworthy here;

a) That the ministerial salaries are grossly out of proportion, even when compared with their counterparts in much larger countries (US and UK) who have far heavier responsibilities.

b) That these salary reductions were long overdue. In the past, such handsome remuneration were "justified" on the back of resounding performance. However, Singapore's economy has been in the doldrums of a recession for several years now (with beginnings reaching as far back as the 1997 Asian economic crisis). This economic barometer is a rough measure of performance and implies that ministerial salaries were due for review at least 3-4 years ago.

c) That adjustments should be made to bring them back within the industry benchmarks. Taking the salary of US vice president as a rule of thumb, the percentage for reductions should start at 50% of current pay. Even if a Singapore minister takes a 50% pay-cut, he would still be earning much more then the US vice president.

d) The percentage reductions should greater then 50% if the intent is to bring the salaries within the perspective of Singapore's domestic scene.

· With such inflated figures, it is understandable why the local government controlled media (Singapore Press Holdings) have taken pains to exclude mention of actual numbers for the world to see. The numbers would be too glaring and no amount of window dressing or creative writing could have reconciled these numbers with a sane figure and restored credibility.

· It is unlikely that Singapore's Ruling Elite will accept such huge salary cuts. Exactly How much and when the ministerial pay-cuts takes effect is not revealed. Ask any man on the street and 9 out of 10 responses indicate many agree the current ministerial salaries are grossly inflated, especially in these lean and difficult times.

· Said a long time forumer from an internet political chat group:
· "First of all the Ministers are NOT leading on pay cut. Workers' salaries have been drastically reduced since the beginning of the recession while thousands have been unemployed. so the Ministers are NOT LEADING. they are only CATCHING UP. And they have several decades to catch up on."

· "Secondly, how much of a pay cut will Ministers take? 10%? 20%? unless its a cut that will affect their lifestyles, it is merely symbolic and they would still not know what it feels like to be a normal worker. as such, this is not Leading by Example. Its just another bogus political propaganda stunt"

· A 29 yr old executive who requested to remain anonymous admitted sheepishly ; "The numbers (ministerial salaries) are a national embarrassment really, because it reflects the underlying materialistic value systems of Singapore Ministers. No matter how you look at it, the fact remains that our ministers are money faced, and these are supposed to be Singapore's leaders, with value systems that Singaporeans should follow." "It (the ministerial salaries) puts Singapore in a bad light in the eyes of the world. The rest of Singaporeans really put in an honest days work for every penny they earn. And the process for review and approval of the ministerial salaries is also a joke. Imagine sitting on the board and approving (on White Paper)your own salary increments! Its all a wayang show".

· This also raises the question as to the authenticity of the actual process for review and approval of cabinet minister's salaries. Who decides on these numbers? Is there independence and transparency?

· Veteran opposition figure J.B. Jeyaretnam on Wednesday, Nov 20, 2002 challenged Singapore government ministers to take a pay cut to show they understand the economic hardships faced by the public. And the over-riding concern is that Singapore's Ruling Elite are unable to appreciate the economic hardship that the masses face in these tough times.

· The growing public resentment comes afew months after PM Goh's careless comments that "lay-offs were not all bad", drew a backlash from the public with a flood of e-mails being sent to the foreign press to register public indignation.

· Source Sg_Review group

· Singapore Review welcomes honest feedback on this hotly debated topic. You can Send your comments to the editor: sg_Review@yahoogroups.com