High pay of Singapore Government Leaders - a view by Rex

REX comments as follows,

I have heard of the "sour grapes" argument several times before. Some people think that commenting on Minister's pay is a sign of "jealousy". I don't think so. "Jealousy" means you don't have something, you want something others have. In the bible it is called covetousness, and it is one of the sins under the Ten Commandments.

It is not jealousy because, I don't even want $3 million a YEAR. It is good enough for me to have $100,000 a YEAR to be comfortable (even less, if i have been already working for 30 years, since i have accumulated wealth already). I cannot be jealous of something i don't need. What I am going to do with 3 million a year? There is a law of diminishing returns. Too much of something IS COMPLETELY USELESS. It is a waste of resources. It is like forgetting to close the tap, the water just wastes away, it could hae been put to better users. THAT IS THE WHOLE POINT. Not Jealousy.

Another reader suggested that our PM is much better than President Obama, so he deserves his salary. Even if I agree with the reason he gave (which I don't), where do we stop - pay LHL 5 times Obama's salary? Why not 6 times? Why not 10 times? How about 100 times? How do you calculate the number that leads to their salaries, if they are so good?

I went to the Minsitery of Finance Singapore Budget website and check out the Prime Minister's Office staff costs. It was only about 0.3 % of the Total 2010 Budget of Expenditure of Singapore. Oh yes, if you compute salaries by relating to budget of the country, you may say 0.3% is peanuts. But this is unfair playing with statistics.

I give example: An agent who spent 1 hour selling a $1 million house gets commission of 2%($20,000). He coud spent the same time to sell a $100,000 house and get only $2,000. Is there significant difference between the efforts made selling a bigger house and a smaller house, to justify such a huge commission? Commission is a dirty word, because the percentage cuts are pegged to items which don't necessarily relate to the effort put in. Same as in the political scenario as per the salary.

Finally, the argument that "we should move on and stop grumbling about their salary". It is none of my business if CEO of XYZ company gets paid huge amounts. It is a commercial entity and the company is profit driven and can pay him what they like to. However, minister's salary are TAXPAYERS money at source. Taxpayers money can be allocated to many other areas of development in a country, unlike a commercial private company which is duty bpund only to make profits and nothing else.

Open your eyes big big.
Do not be like a deaf frog, cannot hear.
Do not be like sheep ready to be led to slaughter, day after day, year after year.

REX

Review of GST

Malaysia has decided to defer the implementation of GST (goods and services tax or value added tax) for the forseeable future. They cited the burden and difficulty to low and middle income earners. A similar move by Hong Kong a few years ago was shelved for the same reason.

Why is GST, which is a part of the taxation landscape in the western countries, not acceptable to these Asian countries? I guess the key reason is the lack of a minimum wage and the wide disparity of income in the Asian countries. In this economic environment, GST will be a burden to the low income earners.

I have another strong objection to GST. It is a wasteful tax. It adds to the cost of doing business. The actual cost to business (and ultimately paid by consumers) is much higher than the revenue collected by the state. This situation applies to Singapore as well.

I suggest that GST in Singapore should be replaced by a flat rate tax of 4 percent on salaries and profits. A special approach will have to be taken for investment income (to be discussed separately). The employer can be allowed to recover the flat rate tax of 4% on salaries earned above $1,000 per month and will absorb this cost for employees earning below this salary.

Tan Kin Lian

History of productivity in Singapore

Read this article.