Goh_Chok_Tong

ESM Goh. In his 70s and still grabbing headlines.

I write about personal finance and investing matters because I think that the common person in Singapore really needs to have a certain level of knowledge on how to organise their financial affairs. It’s also for my own learning purposes because it’s good to reflect on what I read and solicit the wisdom of the internet for views that may be contrary to my own. But I digress.

Being able to organise one’s financial affairs is important especially if you make somewhere above or around the average salary in Singapore but it seems like even the rich are not immune from the problem of not having enough money.

Enter ESM Goh Chok Tong

Apparently, during a grassroots event, ESM Goh said this (full transcript) during a Q&A with a resident:

To anyone of us here, $1 million is a lot of money. So where do you want to get your Ministers from? From people who earn only $500,000 a year, whose capacity is $500,000 a year? So (when) I look for Ministers, anybody who wants to be paid more than half a million, I won’t take him. You are going to end up with very very mediocre people, who can’t even earn a million dollars outside to be our Minister. Think about that. Is it good for you, or is it worse for us in the end?

My first problem with this response is how he equates earnings ability to general ability. We’ve already seen from the financial crisis that asset prices can be artificially inflated and therefore, people who can earn astronomical sums in one year may not necessarily earn this amount due to their abilities.

The second problem is how it equates the ability to be a high-income earner with the ability to lead. Granted, ESM Goh later clarified (see below) that a high current income is not the only criteria but I find it disheartening to know that high income has to be a necessary criterion in the first place. After all, I fail to see how high income as a surgeon or a lawyer translates into the ability to lead an organisation like a ministry. After all, a surgeon or a lawyer’s work does not really require one to manage large numbers of people.

The second problem leads to the third which is how ESM’s argument would automatically exclude people from sectors that don’t pay well. These people would be discounted from his radar when searching for ministerial candidates.* But I don’t see why people who head non-profits or non-governmental organisations can’t be in charge of ministries. In fact, having people from different backgrounds probably bode well for any government as it ensures that all stakeholders’ interests are accounted for.

Rich People Problems – when millions a year may not be enough

But the kicker of his whole response is how he basically used Edwin Tong as an example and I think the example basically backfired.

I am telling you the Ministers are not paid enough, and down the road, we are going to get a problem with getting people to join the government, because civil servants now earn more than Ministers. Are you aware of that? And where do we get our future office holders from? From the private sector? I have tried for the last election. Two of them, earning $5 million per month, $10 million per month (sic – ESM meant per year). To be a Minister for $1 million? No, no, my family is not happy with (unclear). Those approached say money is not the issue. But if you earn $5 million, $10 million, and you pay at least $1 million, many people would come, but not from the private sector. But maybe some you can get. Edwin Tong, he is a Senior Counsel, he earns more than $2 million. PM asked him to be a Minister of State – one quarter (salary). He came to see me. He said, at this stage of his life, he has got a house, he has got a mother-in-law to support, a father-in-law to support, his own parents and so on, what should he do?

With this example, ESM Goh basically gave everyone the impression that Edwin Tong has problems getting by on less than S$2m a year. Now, if someone who earns S$2m a year has to worry about a mortgage and how to support his family, what does it mean for the rest of us? If you were the common person, would you trust such a guy to understand your problems?

The funny part is also how Edwin Tong had to approach ESM Goh for advice on this. Does this mean a middle-aged guy who really wants to be a politician had to ask a senior politician why he should be in politics rather than discussing it with his family? It gives me the impression that Edwin Tong might worry more about his wallet rather than his role as a politician.

I pity Edwin Tong. ESM Goh could have easily said that Edwin Tong was conflicted between his passion and duty for public service versus him wanting to give his family the highest standard of living that he could.

Of course, I don’t mean that Edwin Tong isn’t in politics in the spirit of public service but unfortunately, that’s exactly the perception that ESM Goh’s comments have given — that of a guy who had to be reminded by a senior that his service was more important than his wallet.

Damage Control

You would think that ESM Goh would have learned to be more tactful on the topic of money ever since his wife said that “$500,000 is peanuts” during the National Kidney Foundation debacle but it looks like to him, these sums are still nuts in the grand scheme of things.

Of course, he then clarified that the government doesn’t use earnings ability as a starting point for their search.

“Salaries is not our starting point in looking for Ministers. Character, motivation, commitment, selflessness, practical abilities, competence and proven performance are the main attributes we look for…”

But I think the damage has been done.

 

Notes:

*By the way, I’m curious. Do ESM’s Goh’s remarks mean that our former army generals were all paid multi-million dollar salaries in the SAF? Anyway, it seems that many of the ministers are former public servants (particularly the SAF) so it’s not like paying ministers well is helping the government get a lot more candidates from other sectors.

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