Minister takes pay cut to join politics

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http://thestar.com.my/news/story.asp?file=/2009/9/6/focus/4663715&sec=focus

The Star

The price of public service

By JOSEPH LOH


ON PAPER, it looks like a hefty pay cut. Newly-appointed Minister in the Prime Minister’s Department Datuk Seri Idris Jala could be taking close to a RM100,000 pay cut every month now that he has left the private sector to join the Government.
Based on the Malaysia Airlines’ 2008 annual report, his income as MAS chief executive officer and managing director was between RM1mil and RM1.5mil.
But his current salary as a minister is a monthly allowance of RM14,907.20 and additionally, as a senator, a sum of RM4,112.79. This excludes other claims and allowances (see table on Page 24) which totals to a minimum of RM25,619.99.
However, it has not been disclosed if he is drawing a salary in his position as the CEO of Performance Management and Delivery Unit (Pemandu), the unit monitoring the implementation of the key performance indicator (KPI) initiative for the Government.

Jala will no longer enjoy the remuneration he was earning in the private sector. His monthly salary now and then could be a difference of RM100,000.
Surely this spells national service – at a huge salary sacrifice – on the part of Jala, 51, who had already taken a cut in pay and perks when he left Shell MDS (Malaysia) as MD and Shell Malaysia Gas & Power (Malaysia) vice-president to helm MAS in December 2005.
As the man credited for turning around the once-struggling national air carrier, his appointment is lauded as a recruitment of top minds from the private sector.
Datuk Syed Abdull Hafiz Syed Abu Bakar, Perusahaan Otomobil Kedua Sdn Bhd (Perodua) MD who has known Jala for a long time as they were both in the oil and gas industry says: “This is National Service and you do not think twice about it. You cannot say you love your country and turn away when called upon.”
Hafiz, who has high regard for Jala, says that “with that kind of background, it is a very welcome change to have people like him in the Government because he is looking at quantifiable numbers and getting the job done.”

Others from the private sector who have or had been roped in to join the Government include former Maybank CEO Tan Sri Amirsham Abdul Aziz, lawyer Zaid Ibrahim and Tan Sri Nor Mohamad Yakcop who was with Bank Negara.
Remunerating leaders
If the administration headed by Prime Minister Datuk Seri Najib Tun Razak is keen to bring in professionals to handle specific jobs and wants to measure the performance of Cabinet ministers through a key performance index (KPI), shouldn’t the remuneration of the ministers, Members of Parliament, senators and state assemblymen be reviewed accordingly too?
If more is expected of those who serve the Government, surely their remuneration should be closer to what they can command in the private sector.
For example, in Singapore, the Prime Minister’s salary is determined by placing it on par with the top corporate earners in the island nation.
Going by that logic, many argue that political leaders holding key government positions are in some ways similar to the top personnel in the private sector and should be paid on the same scale.
But in Malaysia, CEO’s salaries are on a scale that is much higher than that of the PM and Cabinet Ministers (see table). The income is spelt out under the Members of Parliament (Remuneration) Act 1980 (Act 237).

Cabinet ministers receive a salary to the tune of RM14,907.20 and deputy ministers RM10,847.65. The Prime Minister receives RM22,826.65, and his deputy RM18,168.15. In contrast, the highest paid premier in the world, Singapore’s Prime Minister Lee Hsien Loong, earns approximately S$3mil (RM7.25mil) a year or a staggering S$250,000 (RM600,000) a month.
But, says Datuk Seri Dr Fong Chan Onn, Alor Gajah MP and former Human Resources Minister, one cannot equate a minister’s job to a position in the private sector.
“By definition, public service requires sacrifice. Nevertheless, a minister should be entitled to live decently because a politician’s life is very uncertain, and he should be rewarded for his service when he retires,” he adds.
Fong shares that if claims are included, a minister can take home about RM35,000 every month.
A minister is entitled to further allowances as an MP or Senator. For many people, that would mean a comfortable level of income. Fong believes that the political system is different here in Malaysia compared to neighbouring Singapore.
“People here join with an ideal of wanting to change society, so to do that many of us are willing to sacrifice. But having said that, to attract new people to serve – young professionals in well-paying jobs – money would be one of the considerations,” he says.

Elected representatives

 

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Elected representatives
MPs are given a monthly allowance of RM6,508.59 per month, in addition to other claims available to them under Statute Paper 235 of 1983 (see table).
The last time MPs’ monthly allowance was increased was in June 9, 2005 (effective from Jan 1, 2004), up RM591.69 from RM5,916.90.
Says Pasir Salak MP Datuk Tajuddin Abdul Rahman of the perception that most MPs are rich: “It is not correct to generalise. There are some millionaires who have become politicians, but the majority of MPs are struggling.”
“While we are given an allowance, we also contribute and donate – especially those in the poorer constituencies. MPs are not rich people, and we sacrifice and suffer quite a lot. The public think MPs and assemblymen are well to do, but actually, they are not.”
He says there are many politicians who were formerly teachers, civil servants, or professionals whose income is not high.
“When they leave their job, they do not have a fortune, but they will still have to make ends meet. They are elected because of their good credentials, and many of them willingly accept the offer to serve.”
Datuk Shahrir Samad, MP for Johor Baru and former Minister of Domestic Trade and Consumer Affairs says, “I think that as an MP, the pay we receive is sufficient. But then again, I am not a single-income MP.” He receives a pension as a former minister and had a laundry business.
He adds: “It depends very much on your lifestyle. If moderate, it would be sufficient. However, we do receive many requests for contributions and donations and it does not allow us to be too generous when handing them out.”
Wong Nai Chee, former Kota Melaka MP and MCA national youth central committee member says, “There is no reason for us to complain. If compared to overseas, our cost of living is not as high. It all depends on how you use it.”
He says that if an MP were to have an office and to engage five or six staff, then they would be running into a deficit, but if solely for personal expenditure, it is adequate.
Cost of service
Subang MP Sivarasa Rasiah says that an MP takes home about RM13,000 a month, with fixed allowances taken into account.
Wong shares that if allowances for attending official functions, Parliament sittings and others are claimed, it can go up to about RM16,000.
It appears that the biggest expense an MP has to pay for is running a service centre. According to Kelana Jaya MP Loh Gwo-Burne, it can cost about RM5,000 each month.
“Rental alone is about RM1,500, staff about RM1,500, overheads about RM1,000 and other expenses,” he says.
Loh says he receives about RM50,000 for office expenses and RM100,000 a year for contributions from the Selangor state government. However, Sivarasa says that MPs are supposedly entitled to receive RM1mil a year from the Government, but he has been unable to obtain it so far.
If an MP were to rely solely on the allowance, he may not have any extra money to spend.
“There are masses to look after, and a lot of expenses. Very often I had to pay for things from my own pocket,” says Wong.
Tajuddin shares his sentiments.
“Each constituency has electorate numbering in the tens of thousands. Every time I go back to my constituency, streams of people come to me with all kinds of problems. Most need financial assistance for hospital, school or maybe utility bills, and some of them for basic household needs like rice and sugar.
“Many are jobless, and if they want to start a small petty business, they cannot borrow money as no financial institution will give loans to them. And it’s hard to refuse requests for help.
“You can’t say you don’t have money. Normally I do give something. We cannot give much but if they come with a request for RM500, maybe I will give RM100. Sometimes I dig so deep into my own pocket that there is a hole in it,” he quips.
MPs would certainly like to have a pay rise but are practical in knowing that it would be hard to come by.
“In fact, if possible, Malaysians want to see their representatives getting less – the less , the better,” says Tajuddin.
Wong believes that raising the remuneration depends on many factors.
“It depends on the economy of the country. We should not raise income for the sake of doing so but when MPs are underpaid and overworked, it becomes a necessity.”
Wong says that holding public office is a huge social responsibility and the remuneration should therefore not be too far away from what the private sector is paying.
“They should be paid enough so they can maintain their integrity and not be open to corruption.”
Sivarasa says that the current remuneration structure puts a real strain on finances.
“MPs who do not have additional income have to find a legal source of income, otherwise some may be tempted to accept bribes.
“As a political party, we have no choice but to source for donations, and that helps us to some extent,” he says, revealing that he still maintains the legal practice he had before he became an MP.
Tajuddin, however, finds his public office too time consuming for anything else.
“If I am serving people for eight hours a day, it leaves me only one or two hours for some small business trading.
“I would rather appeal for a bigger budget to serve the people. Then we are spared from spending our own money. We also have families and dependants to take care of.”
Insufficient funds
Sivarasa opines that what MPs receive right now is a fundamental flaw of the country.
“It makes our Parliament backward . We have to emulate what other governments do, even in neighbouring countries like Indonesia or Thailand.
“The Government should give parliamentarians more support and the capacity to do the job,” he says, adding that funds should be given to run a service centre with proper secretarial and research staff.
If public service as an MP or minister is not financially rewarding compared to the potential earning in the private sector, why do they do it?
Says Fong, “With public service, you get satisfaction. The private sector is profit-driven, but I am driven by service to the people.”
The case is similar with Shahrir.
“What I get in public service is definitely less than my income from private business. But there is a sense of social responsibility to serve the people and that is what motivates me,” he says.
As for new minister Idris Jala, he told reporters after his swearing in as a senator on Monday that he was happy to be appointed a senator and he would work hard to carry out his “national service’’.

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