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