Saturday 30 November 2013

Selangor salary hikes a right move

By Ho Kay Tat

The large salary increases proposed for Selangor state representatives have been opposed not only by Barisan Nasional (BN) leaders but also by certain members of  Pakatan Rakyat (PR)  which administers the country’s richest state.

Effective from Jan 1, 2014, the hikes will see monthly salaries for assemblymen nearly double from RM6,000 to RM11,250, and State Exco members triple from RM6,109 to RM20,250. The State Assembly Speaker’s salary will rise from RM6,109 to RM22,500 and deputy Speaker from RM3,327 to RM15,750. The Mentri Besar's salary will double from RM14,175 to RM29,250.

Coming soon on the heels of DBKL’s rate assessment debacle, naturally some would draw parallels. While we were against the DBKL rate assessment hike, we actually think the Selangor state salary increases are justified. One should note that on its own, an increase in salary or assessment rates for that matter, isn’t bad, but it must be justified.

We were against DBKL’s proposed 100-250% rate assessment hike as it has no merit. The authorities had justified it on an increase in property values, but any increase in rates should be based on operating costs and services provided to ratepayers. And in any case, we have shown that DBKL has been operating inefficiently, and it still has an operating surplus to cover costs.

In Selangor’s case, the question is whether the salary increases are justified.

There is little doubt the state has been run far more efficiently since 2008, when the present administration under Mentri Besar Tan Sri Khalid Ibrahim and his team took over. Since then, the state’s reserves have increased from RM400 million to RM2.7 billion.

For 2014, Selangor tabled a balanced budget of RM1.85 billion. It has a similar budget as DBKL, but serves a population 3.3 times and an area 33 times larger. On a per capita basis, it spends almost a quarter of what DBKL spends. Yet, it keeps its budget balanced, does not depend on federal government grants and does not regularly ask residents for more money.

If salary increases are justifiable, then the next question is the quantum.
Is a MB worth RM30,000 a month?

Yes, at least that. The MB is like a CEO of a large corporation, but in this case, an entire state with even larger financial and social responsibilities.

Even after having tripled, the proposed new monthly salaries of RM20,000 for Selangor  exco members are still less than that of top management in the corporate sector.

If CEOs and top management of  reasonably large corporations can make anywhere between RM1.0 million to RM3.0 million a year why shouldn’t the Prime Minister and his deputy, Federal Ministers and the MBs and State Excos of some of our larger states be similarly remunerated?

But beyond numbers, there is a strong argument for higher salaries for politicians. In any organisation, we must pay to attract talent. In governments and organisations of power, this becomes even more critical as we need politicians of all divides (both ruling and opposition) to be bright, noble and honest.

Politicians must be paid a decent salary to support their family, and so that they need not depend on “side incomes” for support. This is an essential first step in any developing country moving up the ranks and trying to weed out corruption. Pay the politicians well to attract talent, and reduce the temptation for corruption. It is also something which Singapore has adopted much earlier and has worked out well.

In Malaysia, we have for populist reasons not adopted that model of remuneration to show that our politicians and top civil servants do not serve for monetary returns but as a national service.

Yet we know many of them live lifestyles beyond what their salaries can buy.  

Why have that charade and hypocrisy? No one believes it anyway.

Pay our elected representatives, State Excos, MBs, Ministers well. Benchmark their remuneration to, say, 20% below what positions of similar responsibilities fetch in the private sector. The 20% is the national service discount .

On top of that, put them on KPIs like GDP growth and budgetary discipline targets.  Reward them with a bonus when they achieve their targets.  Dock their pay when they fail.

To assuage the critics, Khalid should set such KPIs for himself and his State Exco for 2014.  And hopefully, other states and even the Federal Government will follow suit.

This article is published in the upcoming Edge.


5 comments:

  1. Selangor need to build more community library in PJ utara and PJ selatan and every part of the state. Look at Australia as the model. Because of internet, nobody want to go to library anymore. But if you look at Brisbane library as a model, the library dedicated the entire ground floor as a wifi place where couch and chairs and tables were lay around for students and kids to come in and use the wifi facility. They can sit around the couch or around tables and chairs and surf the website. While the upper floors are where the books are located.

    To pay for the maintenance cost, the shops around the library are rent out to business to setup coffee shop and snack shop. They also build arts and culture center around the libraries. And this encourage many kids to hang out around that area instead of Mcdonalds, shopping malls or cybercafe to play games.

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    Replies
    1. Great idea!

      Singapore has similar concept as well at some of their libraries. :)

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  2. Selangor need to build more community library in PJ utara and PJ selatan and every part of the state. Look at Australia as the model. Because of internet, nobody want to go to library anymore. But if you look at Brisbane library as a model, the library dedicated the entire ground floor as a wifi place where couch and chairs and tables were lay around for students and kids to come in and use the wifi facility. They can sit around the couch or around tables and chairs and surf the website. While the upper floors are where the books are located.

    To pay for the maintenance cost, the shops around the library are rent out to business to setup coffee shop and snack shop. They also build arts and culture center around the libraries. And this encourage many kids to hang out around that area instead of Mcdonalds, shopping malls or cybercafe to play games.

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  3. Actually a community library, sport facility, art and culture center will increase the value of the housing development and real estate value. Selangor government should look into ways to cooperate with the developers do build this facility in all housing area. Instead, the developers who are hungry for short term materialistic gain and didn't look at the long term fundamental and welfare value of a community, are only interested in building more shop office , soho and condominiums which will clog up the entire PJ area. PJ' traffic jam is worst than KL.

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  4. This comment has been removed by the author.

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