Government's Responses to the "2026 Review of Salaries for Political Appointment Holders and Members of Parliament"

Mr Speaker, in December last year, the Government appointed an independent Committee to review the political salary framework.

We are releasing the report today. At the same time, we are setting out the Government’s response. It is important that Members and Singaporeans see the two together. The Committee has reviewed the framework and made its recommendations. But how those recommendations are implemented is a judgement for the Government to take responsibility for. So, rather than release the report on its own and leave people to speculate about what it means in practice, we are setting out our response at the same time.

The salary framework itself is not new. It was debated extensively in this House in 2012. Members are familiar with how it works. The Committee has affirmed that the framework remains sound, while updating its parameters and recommending some refinements.

The Government accepts the Committee's recommendations. But we do not intend to move immediately to the proposed salary levels in one step. I will explain our approach and the considerations behind it in my Statement. Coordinating Minister for Public Services and Minister-in-charge of the Public Service Chan Chun Sing will then elaborate on the details in another Statement.

Following these Statements, we will have a full debate on our response on Thursday. Members will have the opportunity to raise their views and questions, and Minister Chan and I will respond.

Sir, political salaries are a difficult and emotive issue. The sums involved are more than what most citizens earn. So, I understand why Singaporeans scrutinise them closely and why many feel strongly about the matter. It is certainly not an issue Ministers themselves find easy to discuss.

But we run an open system and believe in being transparent about Ministerial salaries. We cannot avoid this issue simply because it is politically difficult. And this is not just a matter of pay. It is ultimately whether Singapore will continue to have the quality of political leadership we need to take our country forward and to serve Singaporeans well in the years ahead.

In the last debate in 2012, there was considerable convergence between the People's Action Party (PAP) and the Workers' Party (WP). The WP proposed a different formula from ours, but the resulting salary levels were broadly in the same range. More importantly, both sides of the House agreed on the following underlying principles: that political salaries should be transparent with no hidden perks and privileges; that they should be competitive enough to enable us to recruit people of the necessary calibre, while incorporating a substantial discount to reflect the ethos of public service.

Since then, the Government has repeatedly exercised restraint in making any salary adjustments under the framework. In 2017, the independent review Committee recommended an upward adjustment. The Government decided not to proceed. A further review was scheduled for 2023, but this was deferred. As a result, the salary norms for political office holders have remained unchanged for 15 years.

Over the same period, salaries elsewhere have moved. Private sector pay has risen. Civil Service salaries have been adjusted. Judicial salaries have been updated.

Ministerial salaries have therefore fallen further behind. The gap is most obvious when compared with the private sector. But even in the Public Service, some senior Permanent Secretaries earn more than Ministers. It is not because the framework changed. But because successive governments have decided, at different points, to hold back.

At each point, there were good reasons for doing so. Senior Minister Lee Hsien Loong had in fact hoped to settle this issue before he stepped down as Prime Minister. He told me that he would have preferred not to leave a difficult issue like this to his successor. But the circumstances then did not allow him to make an adjustment. So, the responsibility now falls to me.

It would have been easier politically for me to leave things as they are. But that would not be the right thing to do. We cannot affirm a framework in principle, but disregard it indefinitely in practice. Otherwise, over time, the framework loses its meaning. Restraint cannot become neglect – and that is why I have decided we must act now.

Our starting point is this: good government depends on good leadership. Institutions are only as effective as the people who lead them. Systems and processes matter. But they do not run themselves. Especially at the top, the quality of leadership makes a decisive difference.

Companies understand this very well. That is why boards spend so much time on succession planning. They know that people at the top determine the quality of decisions, the calibre of their team and ultimately, what the organisation can achieve.

I learnt this lesson myself in the Public Service, how important it is to have the best person running an organisation. I was Chief Executive of the Energy Market Authority (EMA) when the Government took over the liquefied natural gas (LNG) project. So, the task of building the LNG terminal fell to EMA. No one in EMA had experience doing this. So, I searched widely for the best person to lead the project. I eventually found someone. To bring him on board, I had to offer him a competitive package – far more than what I was earning as Chief Executive of EMA. The human resources (HR) people were concerned about whether we should pay him so much, but I decided to proceed and he proved his worth. He built up the LNG team from scratch and delivered the LNG terminal safely – on time and within budget.

Some say that Ministers are different. After all, Singapore already has a first-rate Civil Service. Surely, capable civil servants can keep our system running.

Sir, I spent many years in the Civil Service and I am very proud of our civil servants. They analyse the issues, develop options and give Ministers their best professional advice. And once decisions are made, they work hard to implement them well.

But there are decisions that civil servants cannot and should not make. For example, how fast should we restructure an industry if jobs may be lost in the process? How should the costs of stronger social safety nets be shared among individuals, the community and the Government? How much should we tax today and how much should we leave for future generations? These are not just technical questions. They involve choices about priorities, interests and values.

So, a strong civil service is no substitute for effective political leadership. Ministers have to set the direction for their Ministries, decide the priorities and make the strategic calls. If those calls are wrong, even the best civil servants will struggle to deliver good outcomes. They may execute well, but they will be executing in the wrong direction.

Over time, the quality of political leadership also affects the quality of the civil service itself. Capable officers want to work for leaders they respect and can learn from. They want Ministers who understand the issues, ask the right questions, make sound judgements and take responsibility for decisions. If Ministers consistently fall short, good officers will become frustrated. Many will leave. Some may stay on, but they will be less willing to contribute their best ideas or take on the toughest assignments.

So, the idea that we can have less capable Ministers sitting above a first-rate civil service, and everything will somehow continue to work, is a fantasy.

Older Members will remember watching the British sitcom "Yes, Minister", where the civil servants always seemed smarter than the Ministers. But even that is a benign version of the story because at least capable people remain in the system. The more serious risk is that weak political leadership eventually weakens the civil service too. And this is not a theoretical risk. We have seen it happen elsewhere. Countries once known for highly capable governments have seen their civil services deteriorate when political leadership at the top weakened.

What are we looking for in a Minister?

First, character. That is a veto factor. If someone does not have the integrity, values and commitment to serve, then however capable he or she may be, that person should not be a Minister. But character alone is not enough. Ministers also need competence, the judgement, ability and leadership to do the job well. And this is where remuneration becomes relevant. It does not determine who is capable. But it does affect whether enough capable people are prepared to step forward and take on the responsibility.

The Ministerial job itself is demanding. Some may think it is straightforward. After all, Ministers can just go along with the popular view.

Indeed, there will always be politically convenient options. We can postpone a difficult reform. We can promise more benefits without being clear about who will pay for them. We can avoid decisions that upset particular groups. All that may be easier in the short term, but eventually the consequences catch up with us. And we see this happen in many countries. Government leaders often know what needs to be done. But the political cost is immediate, while the benefits may come only years later. So, difficult decisions are deferred, sometimes repeatedly. And in the end, citizens bear a much higher cost.

Singapore has less room than most countries to govern this way. We are tiny. We have few natural advantages. And we cannot afford to let major problems fester for years before acting.

Take the reset of our family policies which I announced at the National Day Rally. Civil servants can review each scheme and propose improvements, but it was Minister Indranee and the other political office holders in the workgroup who looked at the parenthood journey as a whole and helped shape the overall package, deciding where support would make the greatest difference, how the cost would be shared between parents, employers and the Government, and how the different measures should fit together.

And we can afford to do this now only because of decisions taken over many years. Successive governments have been careful about how we spend and disciplined about husbanding our resources. That meant making difficult decisions including raising the Goods and Services Tax (GST) when we knew our spending needs would rise. And because we acted earlier, we now have the fiscal space to provide stronger support for families in a sustainable way.

Housing is another example. Over the years, there have been repeated pressures to slow down or postpone the building of more flats. At one time, it was because of weak market conditions and falling property prices. On other occasions, it was because of difficult site constraints. But successive Ministry of National Development (MND) Ministers, including Minister Desmond Lee and now Minister Chee Hong Tat, have kept up the supply because Singaporeans will continue to need homes. When COVID-19 caused a major shortfall, they worked hard to ramp construction back up and recover lost ground. And that sustained effort is why we are now in a stronger position to make further moves on housing.

These examples illustrate what the job of a Minister requires. It is not simply to do what is popular today. It is to make judgements about what will leave Singapore in a stronger position tomorrow. And that requires mastery of the issues, a clear sense of priorities and the willingness to take difficult decisions.

We are fortunate to have Ministers who have demonstrated these qualities in different ways. For example, in the climate change arena, Minister Grace Fu had co-chaired difficult negotiations on global carbon markets and helped countries reach a final consensus. Minister Masagos recently took part in the St Gallen Symposium. A Member of the United Kingdom (UK) House of Lords wrote afterwards to commend his contribution, describing him as a "brilliant ambassador for Singapore".

I am not suggesting that Ministers always get every decision right. Ministers do make mistakes. Some will be stronger in certain areas than others and when we fall short, we have to learn, improve and be accountable. But taken as a whole, I believe we have a strong team as Singapore has had over successive generations.

Our Ministers are able to master their briefs, exercise judgement, hold their own and earn the confidence and trust of Singaporeans, and when necessary, represent Singapore well on the international stage. People who can do all these things are not easy to find. They must have the character to serve. They must have the competence to carry the responsibility, and enough of them must be willing to step forward.

That is why building and renewing a strong political team takes sustained effort and that is why we must ensure that our system continues to give future Prime Ministers the best possible chance of assembling such a team for Singapore.

This challenge is not unique to Singapore. Senior Minister Lee once shared with me his conversation with a visiting Prime Minister. This foreign leader had met some of our Ministers and told the Senior Minister how impressed he was with their quality. He shared that his greatest challenge as Prime Minister was finding people of the right calibre to appoint to his Cabinet. He himself had come from the private sector, so he knew the quality of the people outside politics and how difficult it was to persuade the right people to step forward.

His experience illustrates the basic tension every political system has to manage: politics must remain a calling to serve our fellow citizens, but if the personal and financial sacrifices become too large, many capable people will simply choose to do something else.

Different countries have tried to manage this tension in different ways. Because political salaries are highly sensitive, many systems keep the official salary low, but have other substantial benefits and privileges accumulate around the office. In some other places, politicians may supplement their incomes through outside interest or, more often, the larger financial rewards may come after they leave office. So, the headline salary may look modest, but the overall picture is much more complicated.

Yet, even with these arrangements, many countries still struggle to attract the people they need. Most countries have much larger populations than us and far larger pools of talent to draw from. Yet they still struggle to form strong and stable governments.

Singapore has been an exception. We consistently rank among the leading countries in the world for government effectiveness, integrity and the quality of our public institutions. I meet many people around the world who study governments and public policy. Again and again, they point to Singapore as a model of effective government and an inspiration for others.

We have sustained these standards for so long that they can start to feel normal to Singaporeans, but they are not normal elsewhere and they are certainly not guaranteed here either.

We did not build this record of good government because Singaporeans are inherently better than others, or because good government somehow comes naturally to us. We achieved it through deliberate choices made over many decades about how our political system should be designed and how it should work. And one of those choices was to deal with political remuneration openly.

We recognised that highly able people have alternatives outside politics, so we pay political office holders' salaries that are competitive, but with a substantial discount to reflect political service. The full remuneration is transparent. There are no hidden salary components or perks outside the published framework. And that is what we mean by a clean wage.

In return, Singaporeans rightly expect a great deal from their political leaders. High standards of integrity and conduct, competence, responsibility for the decisions we make and ultimately, accountability to voters at the ballot box.

The same broad consideration applies to Members of Parliament (MPs). We chose not to treat the MP allowance as a token allowance. It is a substantial allowance because MPs carry substantial responsibilities in Parliament and in their constituencies. Providing a proper allowance has enabled both the PAP and the WP to recruit and field strong candidates. And we can see the result in this House: we have MPs with a wide range of backgrounds and experience who bring different perspectives to our debates. We may disagree strongly across the aisle, but the quality of debate is high and Singapore is better for it.

So, if we want our political system to remain effective, we cannot allow its basic terms of service to drift further and further away from reality. That applies to MP allowances. It applies even more importantly to political office holder salaries.

Because political renewal is not a one-off exercise. We have to keep bringing in capable Singaporeans from different backgrounds, election after election. Enough of them must be prepared to step forward, contest elections and take responsibility for the future of our country.

That has always been an important philosophy at the heart of the PAP's approach to government. We must build not only for today, but for the next generation. And this was perhaps Mr Lee Kuan Yew's greatest legacy. He did not just build a successful government around himself. He worked hard to leave behind a system that could keep Singapore going well after he was gone. Central to that was leadership renewal, continually bringing in good people and preparing the next generation to take over.

Mr Lee himself had exceptional colleagues, like Dr Goh Keng Swee and Mr S Rajaratnam, but he also brought in people from the private sector, like Mr Lim Kim San and Mr Hon Sui Sen, later. In fact, when Ministerial salaries were first raised in 1970, Mr Lee Kuan Yew explained in Parliament that one reason was to enable him to appoint Mr Hon Sui Sen, who was then head of the Development Bank of Singapore, as Finance Minister. He said that to attract capable people to serve as Ministers, Singapore cannot, and I quote, "Rely on people who are willing to make inordinate sacrifices, particularly when it is at the expense of their families."

That approach continued into the next generation with Emeritus Ministers, like Emeritus Senior Minister Goh Chok Tong, Dr Tony Tan, Mr Ong Teng Cheong and Mr S Dhanabalan. They were all from the private sector.

Over time, however, it became harder to bring people with substantial private sector experience into Cabinet. And it was not for lack of trying. I have worked with Senior Minister Lee for many years since 2004, first as a civil servant, and later in Cabinet. I saw first-hand how much time and effort he devoted to identifying people, persuading them to enter politics and building up the next team. It was one reason I agreed to enter politics when he approached me in 2011.

Now it is my responsibility as Prime Minister, not just to lead the present Cabinet but to build the next team for Singapore, the team that will come after us.

I was 51 when I took over as Prime Minister. It is about the same age as Senior Minister Lee when he became Prime Minister. From the outside, the transition may have looked smooth, but those of us who went through it knew the path was anything but straightforward. In fact, Senior Minister Lee had hoped to hand over earlier, but there were unexpected turns. Mr Heng Swee Keat suffered a stroke. COVID-19 intervened. Mr Heng Swee Keat later decided to step aside. The team had to regroup and work through succession again.

That experience taught me something important. Leadership succession cannot be planned like clockwork. People and circumstances change. Unexpected events happen. So, we need strength across the team and we need to begin renewal early. That is why when I took over, I was very conscious that the renewal task was pressing.

I was then, when I took over, one of the youngest members of the Cabinet. Most were older than me. And several of our most experienced Ministers were advancing in age. But we did not have enough younger Ministers ready to take over the portfolios. This was despite Senior Minister Lee's sustained efforts to renew the team. And the reduction in political salaries in 2012, followed by 15 years without adjustments to the benchmark did not make the task any easier.

That is why leadership renewal became one of my highest priorities. Ahead of the last General Election, I approached several senior Permanent Secretaries whom I thought had the temperament and potential for political leadership. With their experience, they could potentially take on major portfolios more quickly. In the end, none was prepared to make the move, but I was able to bring in younger officers with strong potential and a longer runway ahead of them, like Mr Jeffrey Siow, Mr David Neo and Ms Jasmine Lau.

Even so, there is still much more to do. Aside from Senior Minister Lee, the three most senior members of my team are Mr Gan Kim Yong, Mr K Shanmugam and Dr Vivian Balakrishnan. They helm key Ministries: the Ministry of Trade and Industry, the Ministry of Home Affairs and the Ministry of Foreign Affairs. By the next term of Government, all three will be 70 and above. We should not plan on the basis that they will continue helming these Ministries then. For the good of the team and for the strength of our institutions, we need the next generation to take over. All three understand this – and in fact, they have been pressing me to put succession plans in place.

But they are not so easy to replace.

Minister Gan Kim Yong brings experience across both the private and public sectors, and he commands the confidence of investors and international partners.

Minister K Shanmugam has decades of experience in law and Government, and an unusual ability to get to the heart of complex issues, weigh competing considerations and frame the choices clearly. Few Ministers have that combination of judgement and experience at the same level.

Minister Vivian Balakrishnan has been Foreign Minister for more than a decade and has built up deep knowledge of the issues and an extensive network of relationships. That experience matters greatly, especially as our external environment becomes more complicated.

It is very hard to find complete ready-made replacements for Ministers at this level. A senior person would have a shorter learning curve. But the judgement, experience, political authority and relationships needed for these roles take time to build. So, we need to bring good people in early enough, give them progressively heavier responsibilities and prepare them to take over. We are doing that now. But we also need depth in the pipeline, because not everyone we bring in will necessarily grow into these roles.

I face the same issue in finding a successor at the Ministry of Finance. I was fortunate to have spent many years there as a civil servant. So, I am familiar with the work. That made it easier for me to take over from Mr Heng Swee Keat when he stepped down. For now, I can continue to double-hat as Prime Minister and Minister for Finance. But ideally, I should have someone take over the Finance portfolio. So, when I look at the Ministry of Finance, the Ministry of Trade and Industry, the Ministry of Home Affairs and the Ministry of Foreign Affairs, the succession challenge is very real.

Recruiting from the Public Service is becoming harder. Senior civil servants today have meaningful careers, substantial responsibilities and competitive remuneration as I mentioned just now. Political service would mean giving up that career path, and taking on electoral and public scrutiny. If the gap between Public Service and political salaries continues to widen, that hurdle will become higher.

If this is already a challenge in the Public Service, it is greater still in the private sector. That matters, because we cannot build our political leadership from the Public Service alone. I want people in Cabinet who have spent substantial parts of their careers in business or other professional fields – especially in running large organisations and overseeing complex systems.

They may not start with the same familiarity with Government. But they bring experience of making hard decisions, managing people and resources, operating under commercial pressure nd delivering results in a competitive environment. These are valuable capabilities to have in the Cabinet.

Dr Tan See Leng is a good example. He joined us in 2020, after a long career in the private sector. At the last Parliament Sitting, he spoke with authority about the challenges entrepreneurs face and what more we can do to support them. He did so with conviction, drawing on years of experience running businesses and dealing with these pressures first-hand. So, that gave his speech a conviction that would have been difficult for others in the team to replicate. He brings a different perspective and has made a real contribution to the team.

I would like to bring in more people like that. Ideally, some should come in while they are in their 40s, so they have the runway to learn, grow and take on larger responsibilities over time.

Just consider the profile of such people in the private sector. Take the chief executive officers (CEOs) of major listed Singapore companies – in banking, telecommunications, aviation, engineering and other sectors – as well as people on track in these companies for such leadership roles. At those levels, remuneration can run into several million dollars a year, well above even the revised MR4 benchmark.

We are not trying to match what they earn. We never will. But when we approach people of that calibre, we cannot pretend that the opportunity cost does not exist.

Before the last General Election, I spoke to several CEOs and other senior business leaders whom I thought could make a real contribution in politics. They were earning several times a Minister's salary. None said to me directly that pay was the reason they would not join, nor would I want someone whose decision turned mainly on money. But that does not mean remuneration is irrelevant. Look at the decision from their point of view. They have spent years building a successful career. We are asking them to walk away from that, to take a substantial reduction in income, to contest an election with no certainty of success and to start again in a completely new environment.

In the end, none of those I approached was prepared to make the move. But I have not given up. I am still looking and I hope to persuade a few to join us in the next election.

I recognise that the sacrifice is not only financial. Political life places real demands on families. There is time; time we do not get back. There is scrutiny; scrutiny that spouses and children did not ask for, but nevertheless have to bear with us. No salary adjustment can make up for these things, nor was it ever meant to. The purpose of remuneration is much more modest: to ensure that, on top of all these other sacrifices, we do not make the financial hurdle unnecessarily high.

I know, too, that people look at the team they may be joining – what it stands for, how its members lead and carry themselves and whether these are people they want to serve alongside. That is a responsibility I take seriously too. Those of us already in political leadership must conduct ourselves in a way that earns respect, inspires confidence and makes good people want to join us.

But even if we do all these things well, I am under no illusion – attracting capable Singaporeans into politics will not become easier. It is a challenge I face today and future Prime Ministers may find it harder still. That is the issue we have to confront in this debate. It is not just about what we pay Ministers today. It is about whether future Prime Ministers will continue to have a realistic chance of persuading capable Singaporeans – from the Public Service, the private sector and other walks of life – persuade them to step forward and build a first-rate team to serve Singapore and Singaporeans.

Sir, this brings me to the Government's response to the Committee's recommendations.

Based on the latest data, the Committee has recommended updating the MR4 benchmark from $1.1 million to $1.8 million. It has also recommended changes to the other political office holder salaries and to MP allowances. The Government accepts these recommendations. The revised framework will take effect from 15 October 2026. The monthly allowances for MPs will increase from $13,750 to $18,500 from that date. The adjustments to the salaries of the President, Speaker and Deputy Speaker will also take effect from then.

The Prime Minister's salary is set at twice the MR4 benchmark. I have decided that, for the next five years – assuming I remain Prime Minister – I will donate the full increase in my salary arising from this adjustment. The Government will continue to pay me the salary provided for under the framework, which is how our system works. I will then donate the increase to suitable good causes.

This is my own decision. I do not expect other office holders to do the same.

As a general rule, I do not believe in making a public show of charitable giving. But although the salary framework is a Cabinet decision, as Prime Minister I carry ultimate responsibility for it. So, I want to be clear about how I will personally handle the increase and why I am taking these changes forward because I believe they are in Singapore's interest.

At the end of the five years, I will review the position afresh, taking into account the circumstances at that time. I fully expect to continue supporting good causes, as I have always done. But I do not want to make an open-ended public commitment or to create an expectation that future Prime Ministers may feel obliged to follow.

So, that deals with the salaries and allowances of the President, Prime Minister, Speaker, Deputy Speaker and MPs.

For Ministers and other office holders, however, the implementation will be different. We will not move immediately to the new salary benchmarks. Instead, we will make a one-off adjustment now of up to 9% for political office holders. I say "up to" because the same increase will not automatically apply to everyone. The adjustment for each office holder will depend on individual circumstances, including performance and when his or her salary was last adjusted.

To illustrate, for an MR4 Minister earning the current reference salary of $1.1 million, the full 9% adjustment would bring the salary to about $1.2 million. Thereafter, after this one-off adjustment, there will be no further special adjustments to close the gap to $1.8 million. Instead, any subsequent changes will be based on individual performance and responsibilities.

So, let me explain how this works.

Today, there are four ministerial grades – MR4, MR3, MR2 and MR1. For each grade, there is a range of salary points, which determine the Minister's fixed pay. So, MR4, there is a range of salary points; MR3, likewise; MR2 and MR1.

As Prime Minister, I decide the grade of each Minister; where each Minister is positioned within the salary range for that grade; and the individual performance bonus each year. So, at present, 10 out of 16 Ministers are at MR4. The other six are at higher grades, reflecting their seniority and heavier responsibilities, including those serving as Coordinating Ministers.

Within each grade, Ministers can move to different salary points over time, based on performance. I will place a new office holder at the lower-end of the salary range. Those who perform well may move to a higher point within the range. And of course, those who do very well may be promoted to a higher grade as they take on greater responsibilities.

There are also variable components which make up more than one-third of a Minister's annual remuneration. There is the National Bonus which applies to all office holders, based on the outcomes specified in the framework. The individual performance bonus depends on my assessment of each office holder's performance. Last year, for example, individual performance bonuses for political office holders ranged from three to six months.

So, when we refer to the current MR4 reference salary of $1.1 million, this is an all-in reference figure. It includes fixed pay, together with assumed levels of performance and bonus payouts. The actual remuneration received by an individual Minister in any year can, therefore, be higher or lower than the reference salary, depending on his or her salary point and the variable payouts.

This is how the system operates today.

The Committee has recommended some fine-tuning to the current structure. They have recommended that the MR2 and MR3 grades be combined. So, there will be three Ministerial grades instead of four. They have also recommended that the salary range for each grade be widened to plus or minus 25%.

We agree with these changes. But the basic approach to assessing and differentiating individual salaries, based on performance, will remain the same as I have explained just now.

So, after the one-off special adjustment, I will continue to assess Ministers and adjust their salaries in the usual way, based on performance.

On that basis, by the end of this term of Government, I expect most Ministers who remain at MR4 to be at the lower-end of the new salary range – and that is about $1.35 million. Those who excel and take on larger responsibilities may move higher within the range, or be promoted to a higher Ministerial grade.

In other words, Ministers' salaries will be set within the ranges under the revised framework. But exactly where each person is positioned will depend on performance and responsibilities.

So, to be clear, the revised MR4 benchmark of $1.8 million is not a target salary that every Minister must eventually reach. Ministers can be paid above or below the benchmark, within the prescribed range. And as I have explained, after the one-off adjustments, the usual adjustments continue based on salaries; and by the end of this term of Government, I expect Ministers who remain at MR4 to be at the lower-end of the new salary range, and that is $1.35 million.

I have described how this will apply to Ministers. The same approach will apply to the other office holders – Ministers of State, Parliamentary Secretaries and Mayors. For these office holders, I will typically consult their supervising Ministers on their performance. But the final decision on their salary points, grades and bonuses rests with me.

New office holders appointed in the next term of Government will, likewise, come in at different points within the range, taking into account their experience and their previous remuneration. So, over time, we should expect a wider spread in salaries than we have today. Within the current framework but a wider spread of salaries.

And this is the purpose of the revised structure. It gives the Prime Minister more room to differentiate pay according to performance and importantly, to bring in people with substantial experience from outside Government, especially those already earning significantly more in the private sector. We still expect them to make a meaningful sacrifice to enter political service. But we should not make that gap larger than it needs to be.

Overall, I believe this will give me and future Prime Ministers a better chance of persuading capable Singaporeans to step forward and of building the strongest possible team for Singapore.

Sir, good government did not come naturally to Singapore. It was built deliberately over many years and there is nothing automatic about sustaining this. For more than 60 years, Singaporeans have benefited from a Government that is able to plan ahead, take difficult decisions and deliver.

Our responsibility is to preserve that capacity for those who come after us. And that is why I have decided to deal with this issue now. And I ask for your understanding and support as we make this adjustment.

This is not about the PAP government of today. We cannot predict what the political landscape will look like years from now. But whichever party is in charge, whichever party is in government, surely Singapore will need strong and effective political leadership to serve our people and take our country forward.

Good leadership has always been important. It will be even more crucial as we navigate a more uncertain and troubled world. So, let us make the right decision – to keep the path open for capable and public-spirited Singaporeans to step forward, lead and serve. Let us give our children and future generations the confidence that when the time comes, there will be leaders ready to rise to the challenge and take Singapore forward. Thank you, Mr Speaker. [Applause.]

Sir, as mentioned earlier, Minister Chan Chun Sing will be making a related Ministerial Statement, and the Government intends to have a debate on both Statements. Minister Chan will give notice to move a Motion for both Ministerial Statements to be considered by Parliament after our Statements. And we will subsequently address Members' clarifications during the debate on the Motion.

Coordinating Minister for Public Services.

Mr Speaker, Sir, I will set out the details of the Government's Response to the 2026 Salary Review Committee's report.

Sir, as the Prime Minister has explained, this review is fundamentally about giving ourselves a better chance to build a first-rate team to serve Singapore and Singaporeans. We need to ensure that the salary framework stays updated so that capable and committed people from different backgrounds and at different stages of life, can step forward to serve, not just the financially independent ones or those who have made exceptional lifestyle choices.

This includes younger Singaporeans in their 30s and 40s, who may be building their careers, raising families and taking on major financial commitments. We want such people to be able to enter public office in their prime with the energy and runway to build up the experience and judgement to make tough decisions, and to bond and build up the trust with Singaporeans to take Singapore forward, especially in difficult times.

This will also include those who are more established in their careers, especially in the private sector. As the Prime Minister has said, some CEOs of major Singapore companies earn $6 million or $7 million a year, sometimes more. We are not trying to match that nor should we. But we cannot pretend that such opportunity costs do not exist. So, we want to be able to say to capable Singaporeans, "Singapore needs you. And while political service involves sacrifices, it will not come at an unreasonable cost to you and your family."

At the same time, money must never be the primary motivation for anyone who is considering political service. If money is your main reason for wanting to be a Minister, frankly, you are not the person we are looking for. We will never be able to match the pay of all the people we hope to get. On the other hand, no matter how much we pay, some will never join for various reasons.

This is why we need a balance – a framework that is fair to widen the pool of Singaporeans who can realistically consider serving while preserving the ethos of political service.

The current framework was established in 2012, when the Government accepted the recommendations of the Committee led by Mr Gerard Ee. The recommendations were implemented retrospectively from May 2011, when the government of the day took office. Since then, the political reference salaries have not been updated. In 2017, the Government decided not to proceed with adjustments after an independent review because of prevailing economic circumstances. We further held back a review in 2023. And hence, the result is that the structure of political salaries has been frozen for the past 15 years.

If we continue to hold off updates, we risk the framework losing its relevance. More importantly, we continue to weaken our ability to build a strong, diverse team of leaders that Singapore needs.

As part of the review process, the Prime Minister convened an independent Committee in December last year. After much deliberation, the Committee has submitted its report. With your permission, Mr Speaker, Sir, I have asked the Clerk to make the report on the "2026 Review of Salaries for Political Appointment Holders and Members of Parliament", available through the MP@SG Parl mobile application and to be captured in the Official Report. [Please refer to Annex 1.]

With your permission, Mr Speaker, Sir, may I also display some slides on the LED screens as I walk the Chamber through the recommendations and our responses?

You have my consent.

Thank you, Mr Speaker, Sir. Sir, I would like to put on record our appreciation to the Committee led by Chairman Mr Gan Seow Kee and comprising seven other members from across the private and people sectors. Their names are shown on the screen.

This was not an easy task. The Committee approached it with seriousness, care and rigour. The Committee also engaged Mercer, a leading global human resources (HR) consultant, for technical expertise and to provide additional information on pay practices and levels.

Mr Speaker, Sir, before setting out the Government's response to the Committee's recommendations, let me first set out the core principles that underpin the political salary framework. These principles were established by the 2012 Committee, affirmed by the 2017 Committee and re-affirmed by the 2026 Committee in their review.

The Government agrees with the Committee's assessment that the three core principles of the framework remain sound and necessary so that we can build a strong, sustained political core.

First, calibre. The salary framework should take reference from market benchmarks to ensure individuals of the right calibre are not deterred from stepping forward to lead our country.

Mr Speaker, Sir, the concept and carefully chosen phrase being "not deterred". It is not "encouraged" or "attracted". This is to ensure that Singapore can continue to draw from a broad and deep pool of talent to serve in political office.

Second, commitment. The salary framework should include a meaningful discount relative to market benchmarks to reflect the ethos of political service. Today, the discount is 40% off the market benchmark. And this will continue.

Third, a clean framework. The salary framework should ensure a "clean wage" with no hidden perks. Transparency and integrity in remuneration remain fundamental to maintaining public trust.

In addition, the Government affirms that salaries should be clearly linked to performance – both individual and collective – based on outcomes that matter to Singaporeans and reflect socio-economic progress.

Sir, let me turn to the Government's response to the Committee's recommendations on the benchmark formula and MR4 reference salary, underpinned by these principles.

Sir, today, the benchmark salary formula for the MR4 grade is set at the median annual income of the top 1,000 Singaporean earners, with a 40% discount. The benchmark itself reflects the calibre of people Singapore needs for good governance while the discount reflects the ethos of service. For context, as the Prime Minister has said, 10 out of the 16 Ministers today serve at MR4.

For its review, the Committee carefully considered whether the benchmark formula itself and the resultant reference salary, remain fair and sound. They examined the composition of the top 1,000 earners and affirmed that the benchmark pool continues to reflect a diverse talent pool, drawn from a wide range of sectors: manufacturing, healthcare, transport, hospitality, wholesale and retail, real estate, and financial and professional services. The benchmark pool also includes Singaporeans from a diverse range of occupations – not just the CEOs but also others in management roles below CEO-level and professionals across a range of fields.

The Committee studied the data and affirmed that using the median income rather than the average income of the benchmark pool is more prudent for computing the reference salary. The median is simply the middle value when all salaries are ranked from lowest to highest. Half earn above it, half below. Unlike the average, it is not distorted by outliers. A single ultra-high earner can pull up the average significantly, giving a misleading picture of what a typical person in the pool actually earns. Using the median avoids such outliers from skewing up the benchmark salary. They also went beyond affirming the philosophy of the formula. They looked at information across multiple sources and data from the private and people sectors to affirm the reasonableness of the latest salary benchmark.

Mr Speaker, Sir, let me be upfront. No formula will be perfect or able to satisfy everyone. There is no universally ideal benchmark. The key question is this: what is a workable framework and range of figures that allow the Prime Minister, any Prime Minister, to reasonably assemble a team that Singapore deserves?

After reviewing the report, the Government has decided to accept the Committee's recommendation to update the MR4 reference annual salary to $1.8 million. The 40% discount remains. Without that discount, the reference of the median top 1,000 Singaporean earners would be slightly above $3 million. This deliberate reduction reflects the ethos and sacrifice expected of political service.

The difference between the current and new MR4 reference salary may seem significant to many. But this is because the MR4 reference has not been updated for 15 years. Averaging over time, the adjustment works out to be about 3.6% per year. Putting this into context, this is lower than the wage growth over the same period experienced by Singaporeans – about 4.3% annually for the median (P50) earner and 4.6% for the lower-income (P20) earner. For reference, over the same period, the Civil Service pay has been adjusted three times: once in 2014, another in 2022 and again in August this year. There were revisions ranging from 2% to 14%, calibrated to close market gaps each time.

Sir, the benchmark is not a statement that only the top 1,000 earners can become leaders. It is a practical recognition that we must be able to recruit capable people who have other options. Our objective is simple: to allow Singaporeans from every background to step forward and serve, while recognising that political service involves sacrifice.

As the Prime Minister has said, we will not move existing political appointment holders immediately to the new reference salary. Instead, we will make a one-off adjustment of up to 9% for them, depending on individual circumstances, including performance and when his or her salary was last adjusted. For an MR4 Minister who might be paid at the current reference salary of $1.1 million, this means an increase to approximately $1.2 million. Beyond this immediate adjustment, any subsequent changes will be considered based on individual performance and responsibilities.

Sir, let me now go into the Government's response to the second set of Committee recommendations to streamline the grade structure for the other political appointment holders and widen salary ranges.

The Government has decided to accept the Committee's recommendation to widen salary ranges to 75% to 125% of the reference benchmark. The Committee noted that this is in line with market practice, where ranges are generally wider. Importantly, this gives greater room to cater for people joining political service from different backgrounds and at different stages of their careers.

Today, the Prime Minister decides where each political appointment holder should be placed within the relevant salary range, taking into account factors such as the person's experience, job scope and previous remuneration package.

As the Prime Minister has shared, a new appointment holder will typically start towards the lower-end of the range. Over time, the salary point can be adjusted based on the individual's performance and the responsibilities he or she takes on. At the same time, if we appoint someone who is already highly established in his or her career, we will have the flexibility to place the person higher within the range. The individual is still likely to have to take a pay cut to enter political service, but the wider range will help make the pay cut less steep.

With wider salary ranges, the Government accepts the Committee's recommendation to streamline the grade structure for simplicity and merge grades with fewer appointment holders. Specifically, we will combine the MR2 and MR3 Ministerial grades into a single grade, pegged at 1.3 times of MR4. This is the midpoint between today's 1.2 and 1.4 times of the MR4 reference benchmark.

We will also merge and set the peg for Mayors, Senior Parliamentary Secretaries and Parliamentary Secretaries at 0.45 times of MR4. This is towards the lower end of today’s range of between 0.38 and 0.6 times. For this merged grade, a wider salary range of 70% to 130% of the reference salary will apply. This provides flexibility to cater for greater diversity among appointment holders in these grades.

Mr Speaker, Sir, some have said that higher pay does not guarantee higher performance. This is true and this is precisely why we have not simply set an annual salary benchmark and left it there. The salary paid to political appointment holders comprises both fixed and variable pay components, with a split of about 65:35. What this means is that only about 65% of the annual MR4 reference salary is fixed and the remaining 35% is variable.

Let me explain that: fixed plus variable equals the MR4 reference salary benchmark. It does not mean the reference salary benchmark plus the variable components become the total package, as some may have misunderstood it to be. Fixed plus variable equals total benchmark.

This keeps salaries transparent and disciplined, while ensuring that performance and outcomes continue to matter. The variable components, which form part and not on top of the total annual salary, are paid depending on individual performance, as well as national outcomes achieved based on a National Bonus framework.

Let me say a few words on how the National Bonus is structured. The National Bonus ranges from zero to six months. It is tied to four indicators that reflect what matters most to Singaporeans, whether people have jobs, whether incomes are growing, especially for those at the median and lower rungs, and whether our economy is growing. The Government accepts the Committee's recommendations to revise the targets for the four indicators.

We will tighten the targets on all three socio-economic indicators – specifically, the unemployment rate and real income growth rates of the P50 and P20 Singapore Citizen.

For unemployment rate, the target level will be tightened from the current 4% to below 4.5%, to 3% to below 3.5%. So, this is a tightening of one-percentage point.

For the P50 real income growth rate, the target level will be tightened from the current 2% to below 3%, to 2.5% to below 3.5%.

For the P20 real income growth rate, the target level will be tightened from 2% to below 3% to 3% to below 4%.

For real gross domestic product (GDP) growth rate, the target band will be updated from 3% to 5%, to 2% to 4%.

Over the past decade, our average growth rate has been about 2.6%. We have had some fortunate years recently, and the Ministry of Trade and Industry has upgraded the growth forecast to 4.5% to 5.5% for this year, reflecting the strong performance of our economy. However, our projection is that for our maturing economy, these are exceptional years rather than the norm.

Looking ahead, over the next decade, the Ministry of Trade and Industry expects our real GDP to be around of 2% to 3% per annum as a maturing economy, with an ageing population and slower workforce growth. All these will affect our long-term growth trajectory. Our responsibility is to set targets that are ambitious, credible and sustainable. That is why the Committee had calibrated the GDP growth indicator to Singapore's long-term growth potential, not the exceptional performance of specific years.

Beyond the immediate adjustments to the targets for existing indicators, the Government agrees to explore the inclusion of a robust Quality of Life measure in the National Bonus framework when this becomes available, as the Committee had suggested.

The Government also accepts the Committee's recommendation to retain the current practice of paying all political appointment holders one salary package, even if they hold two or more appointments or portfolios. Sir, the principle is simple: one person, one salary. Holding more portfolios does not mean receiving more pay.

Sir, let me now move on to the recommendations for statutory appointment holders.

Sir, the Government accepts the Committee's recommendations to retain the existing approach for statutory appointment holders, with clear and established pegs to the political salary framework.

The President's monthly salary will continue to be pegged to the Prime Minister's monthly salary. The Speaker's salary will also continue to be pegged at 50% of the MR4 Minister reference salary. In turn, the Deputy Speaker's annual package will remain pegged at 15% of the Speaker's salary.

Beyond this adjustment, the Committee had recommended to study the peg for Speaker and Deputy Speaker, taking into account how their roles and responsibilities may have evolved over time – in particular, to consider whether their package might be better aligned with the formulation for the President's monthly salary. We will study the Committee's recommendations.

Salaries for the President, Speaker and Deputy Speakers will be fully adjusted in line with the framework based on the updated MR4 reference salary, from 15 October. In October, the Government will move the necessary amendments and Motions to give effect to the adjustments for the President, Speaker and Deputy Speakers.

Sir, I will now touch on the remaining areas in the Government's response related to MP allowances.

MP allowances are currently pegged to 17.5% of the MR4 reference annual salary. The Committee has observed that the considerations for community-related roles, such as MPs and Mayors may differ from those for full-time political appointment holders. It has recommended that the Government study establishing a basis for sizing the payments in a way that is delinked from the MR4 benchmark, but that remains adequate for these roles to carry out their duties faithfully and effectively.

The Government will undertake such a study. In the meantime, the Government will accept the Committee's recommendation to update MP allowances from $13,750, to $18,500 monthly, to account for inflation.

We accept the Committee's view that this references the 2012 Committee's earlier assessment that the level of the MP allowance was appropriate at that time. Updating the monthly allowance for inflation over the period is in line with this. This is a practical update to ensure that MPs are adequately supported in discharging their duties on the ground.

The Government also accepts the Committee's recommendation to increase the allowance of Non-Constituency Members of Parliament (NCMPs), from 15% of an MP's annual allowance, to 30%. This translates to $5,550 monthly. This considers the conferment of full voting rights to NCMPs since 2017 and brings the allowance into better alignment with their Parliamentary responsibilities.

The revised allowances for all MPs will also be implemented with effect from 15 October.

Finally, the Government accepts the Committee's recommendations to retain existing benefits provisions, which continue to uphold the principle of a clean wage, with no hidden perks, no pensions and clear transparency. Medical benefits will continue under the MediSave-cum-Subsidised Outpatient (MSO) scheme, aligned with the Public Service.

Sir, as shared earlier, the Government will implement the adjustments within the framework with effect from 15 October 2026. The revised National Bonus framework will be implemented from 1 January 2027, as the data for the indicators are reported on a calendar year basis.

To keep the framework up-to-date along with changes in market and socio-economic conditions, the Government also agrees that there should be regular, independent reviews of the salary framework every five years. Between reviews, where justified, the Government may make adjustments within the framework, and this will be exercised with responsibility and restraint.

Mr Speaker, Sir, there will be inevitable questions on how much more these recommendations will cost the Government. For illustrative purposes, the numbers are as follows: about $5 million more annually, if the maximum of 9% is applied to all the political appointment holders; about $6.6 million more annually for all the MPs.

Mr Speaker, Sir, I have taken the House through the key points in the Government's response.

Sir, this will always be a difficult topic to discuss, even in the best of times. We understand the diverse concerns of Singaporeans. These are the very issues that Singaporeans expect the Government to deal with and get right. And precisely because these concerns matter, we must ensure that capable Singaporeans are not deterred from stepping forward to address them.

Even as we do so, we know that the contributions of political appointment holders and MPs go well beyond pay. The opportunity costs and demands of public life away from families and loved ones are not something we take lightly. We cannot remove these sacrifices, but we can make the choice less prohibitive.

And I want to thank all Members, past and present, from all sides of the House, who have stepped forward to serve Singapore nonetheless; and Singapore is better for it.

For those considering political service, the question is not only whether the terms are fair, but whether this is a team worth serving with and this is a cause worth fighting for. That is a responsibility that falls on all of us. To inspire through our actions and sense of duty. To bring people together to discuss and work through difficult issues, rather than to divide by exploiting difficult issues for political gains. Let us all commit to do that for Singapore and Singaporeans.

Governing well means making clear-headed decisions for Singapore's long-term interests which may be uncomfortable today but necessary for tomorrow. This is what political leadership is about: being upfront with our people on the challenges and options before us. Our principles and framework have not changed. What we are doing is to update salaries within that framework after a 15-year gap, so that they remain relevant and disciplined.

Mr Speaker, Sir, this is how we do right by Singapore. This review is less about the individuals of today, who have already stepped forward to serve regardless. It is really about upholding a system that gives us a better chance for the next generation of capable and committed Singaporeans to step forward – so that Singapore's best days remain ahead of us.

With your permission, Mr Speaker, I have asked the Clerk to make the slides available through the MP@SG Parl mobile application. [Please refer to Annex 2.]

Permission granted.

Thank you, Sir. Members will no doubt have views on the Government's response and it is important that we hear them. That is why I will move a Motion for this House to consider the Statements made by the Prime Minister and myself. May I propose that any Member who wants to seek clarification do so during the debate? And we look forward to the debate and will address any clarifications fully then.

To give Members some time to consider both Ministerial Statements made today, I give notice to move a Motion under Standing Order No 44 for the Ministerial Statements, titled "Government's Response to the '2026 Committee Report on Review of Salaries for Political Appointment Holders and Members of Parliament'", to be considered by Parliament on Thursday, 10 September 2026.

Mr Speaker, Sir, may I also request that this Motion be listed as the last item of business on the Order Paper before the adjournment of Parliament?

The Coordinating Minister for Public Services has given notice that he will move a Motion under Standing Order No 44 for both Ministerial Statements to be considered by Parliament on 10 September 2026. Members will then have the opportunity to seek clarification and to debate on both Ministerial Statements at that point.

We will now move on to the next item of Parliamentary business. Order. End of Ministerial Statements. Introduction of Government Bills. Second Minister for Finance.