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Tuesday, 25 November 2008

Civil service to cut pay

AMID a darkening economic outlook, cabinet ministers and senior civil servants would see their pay packets next year shrink by up to 19 per cent- with the President and the Prime Minister taking the biggest hit.

This is even as a planned salary increase is deferred.

Meanwhile, all civil servants across the board would get one month less bonus this year, as compared to last year.

In a statement yesterday, the Public Service Division (PSD), which oversees civil service matters, pointed to the slowdown in the global economy and in Singapore as the reason for these moves.

The top government officials - political leaders, administrative officers (AOs), judicial and statutory appointees - will feel the pain on two fronts:

First, a cut in their GDP Bonus, which is linked to Singapore's gross domestic product growth. This comprises a 'significant portion' - close to 25 per cent - of their annual salaries.

'With a weak economy, these components will automatically fall,' said the PSD.

This means a fall in total pay packets of 11 per cent to 19 per cent. The more senior the officials, the deeper the cut.

At the top, there will be a 19 per cent fall in the annual salaries of President S R Nathan (to $3.14 million) and Prime Minister Lee Hsien Loong (to $3.04 million).

Senior permanent secretaries and entry-grade ministers at the MR4 grade would take a 18 per cent cut (to $1.57 million).

AOs at the entry superscale grade of SR9 - these are usually top-performing AOs in their early or mid 30s, and directors in ministries - would see their packets drop 12 per cent (to $353,000).

Also not spared are the Members of Parliament, whose allowance would fall by 16 per cent (to $190,000).

Second, a planned move to adjust upwards the salaries of the ministers and permanent secretaries at the MR4 grade has been postponed.

In April last year, the Government had announced that it intended to adjust their annual salaries from 77 per cent to 88 per cent of the private-sector benchmark by the end of this year.

This is now deferred.

Instead, their pay packets are now at 56 per cent of the benchmark, which is set at two-thirds of the median pay of the top eight earners in each of six sectors such as banking and engineering.

On when the adjustment would eventually take place, the PSD told The Straits Times: 'When the economy recovers and private-sector salaries increase, civil service salaries will have to move up too in order to remain competitive with the private sector.'

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