Tuesday, May 22, 2007

Pay Day for Civil Service

It's a good and welcome move by the Government to increase the pay of the civil service between 7.5% and 42% from July 1st, as announced yesterday by the Prime Minister. It is the first pay rise since 1992.

In addition, it's a good move to provide an additional 20% pay increase to police and army personnel on top of the above increments. It was difficult to believe that a constable in the police force currently draws a meagre RM690, an amount that barely on par with the poverty line in Peninsula Malaysia.

The salary raise however, accentuates another major unresolved problem within the our civil service sector. The civil service has been expanding rapidly since the 1990s, and the growth accelerated under the current prime minister. In 1990, the Federal Government had 773,997 employees; by the year 2000, there were 894,788 on the payroll, a significant increase of 15.6%. However, since then, the civil service employment has accelerated by another 210,000 personnel, marking a 23.5% increase over the past 6 years alone.

The increase in civil service has come about despite the massive privatisation exercises conducted over the past 20 years to reduce the economic burden of the Government as well as to increase the efficiency of the delivery system. One of the key objectives under the privatisation programmes launched by the then prime minister, Tun Dr Mahathir Mohamad, was to reduce the civil service population to just above 500,000. Hence, it could be verily argued that the privatisation exercise by the Government was a failure in maintaining a lean and efficient government for the civil service is today more than double its intended size.

The unwieldy civil service we have today has, in a large part, to do with the Government's policy of making our civil service the dumping ground for the politically sensitive constituency of unemployed Malay graduates. For example, last year alone, the Public Services Department (PSD) and Public Services Commission have been urged to speed up the recruitment of graduates to fill some 30,000 vacancies in the civil service. This call was made by the Deputy Prime Minister Datuk Seri Najib Tun Razak to overcome the problem of unemployed graduates, of which an overwhelming majority was bumiputeras.

By absorbing these graduates who were not able to obtain gainful employment in the private sector, it results not only in a poor quality workforce within the civil service, it also increases the Government's financial obligations.

Hence, one of the unnecessarily negative impact of the very necessary increase in the civil service pay is the massive RM8.0 billion financial commitment for the current and future years. Despite the record RM159.4 billion budget for 2007 as announced last year, the RM4.0 billion civil service pay increase for the 2nd half of this year was not previously budgeted, raising questions if the targeted deficit of 3.4% of GDP for 2007 can still be achieved. The RM8.0 billion increase also marks a permanent 7.1% increase on the Government's annual operating expenditure.

The Government must hence take the painful but very important step of trimming the civil service sector into a leaner and more efficient “machine”. The increase in pay will be a waste of public funds, if the move is not accompanied by a corresponding increase in civil service productivity. The Chief Secretary to the Government, Tan Sri Mohd Sidek Hassan, must wield the stick to ensure the “shape up or ship out” culture which he promised to deliver earlier this year. He cannot let his words be mere rhetoric, or it'll just enhance the perception that the Government emphasizes only on rhetoric and not deeds.

Finally, it is also hoped that the Government will make additional adjustments, just like that for the Police Force, for the teaching sector as well as critical professionals such as doctors. Additional adjustments for teachers in primary and secondary schools as well as lecturers in local universities will serve to attract better and more qualified candidates into the teaching profession. This is critical in achieving the country's mission to build human capital as part of its key pillars to achieving our Vision 2020. The adjustments will certainly make for a more meaningful teachers' day which was celebrated just last week.

As for doctors, they are certainly one of the most poorly paid medical professionals in the region, resulting in many qualified Malaysian doctors seeking greener pastures overseas where they are in demand. At the same time, this compromises our healthcare system with sub-standard doctors recruited from many Third World countries.

It is hoped that the Government will pay heed to the above constructive criticisms and take urgent and imperative steps to make the pay rise for the civil service a truly meaningful one for Malaysian citizens, and not just a one-off pre-election handout.

(This above post was also sent out as a statement to the press. It has been carried in Malaysiakini here and here)

21 comments:

Another Officious Blog said...

Could that be an attempt by the government to grow the economy via higher inflation? At least that is what a first-year macroeconomics textbook would say... hehehe... (higher prices -> lower real input prices holding nominal input prices fixed).

multidimid said...

From Japan, PM ABDULLAH dismissed the Salary Hike was linked to General Elections (most likely now in Nov 2007, after consulting with his Chinese Fortune Teller, according to DAP Ronnie Liu); Whilst in Japan ABDULLAH is Begging Japan to invest in Johore’s IDR which is still getting lukewarm response.
And locally, MIA (Malaysian Investors Association) President Datuk Lim said salary hike is an indication the country’s resilient economy and gave his silly observations:
- “more quality graduates and other people will be attracted to join the civil service”
- “sure the efficiency and productivity of the public sector will improve”,
More details & Japan pics at Update in
http://powerpresent.blogspot.com/2007/05/more-pics-video-rm8-billion-pay-rise.html

Anonymous said...

I agree. This is like "let's put the bet first and hope for the best to come". As in gambling.

I also hope the logic "salary increment first" == "better efficiency and productivity to come" works.

Also let's hope the logic "better salary" == "better quality graduates" works.

But, aren't these people forgetting something? What about the discrimination policy that is biased against other races as far as civil servants are concerned? Did that guy really think this kind of policy will attract more quality graduates? I'm really curious if he'd really think with the brain before making such statements.

Let's also hope that the logic "better salary" == "less corruptions" works. I'm really skeptical about this, when we did not even have an strong anti-corruption system. Because I also believe "money is never enough". The answer to these quetions are very clear "when was the last time you felt you had enough money?" "Is there a will to make more? How?"

Don't get me wrong, I'm all for the salary increment for those earning less than RM2K/month. But we can't just put the bet and hope for the best to come. Something else in parallel needs to be done because we all know we can't just increase one's salary and hope he performs or hope someone better will join. It doesn't work that way. Acknowledgement of meritocracy is the key. Severe punishment for those who corrupts. We must have a good system in place, to convince the smart Japanese, dear PM.

Singaporean at large said...

So, here I am with my big mouth again.

Why don't you propose a solution along the lines of:

1) Increase pay is ok. But peg bonus to performance. Now this is not an easy task, but the objective lies in reducing corruption. How? Simple.
Make bonus a 2 part exercise.

a) Have a year end bonus for civil servants depends on the amount of taxes the Gov collects. This ensures all agencies are on the ball in collecting taxes and since it affect everyone, they will be eager to report any idiot who dares try pocket money for himself, hence affecting the central money vote.

b) Have a special bonus (June) for customs, traffic police. This will be determined by the amount of taxes, plus reported trade, correct paperwork submitted. This again reinforces the mentality that if you makan a bit, you makan from all of us by affecting the central pool. Hence, corruption is reduced psychologically with everyone catching everyone.

Above, however are not definite solutions. Humans behave in ways beyond our own comprehension. But you want to try it?

Lastly, peg bonuses of corrupt practices investigation bureau to a combination of the above plus the number of cases solved.

Providing solutions will help DAP a lot more than just complaining.

Singaporean at large said...

So, why don't DAP request that in order to receive the pay increment, all civil servants must write a resume indicatin what his/her responsibilities are, exactly. If this person has no or minimum responsibilities, well, you get the point.

And, have the Gov draw up a budget, based on economic performance indicators for the civil service pay. Hold them to it. The more efficent the civil service is (operating with less people), the better the pay with the same amount of budget distributed within less people.

Same psychology as with the bonus solution above.

Daily Nibbler said...

I think the government knows what is productivity based increment but chose to ignore for the bigger picture: there are 1.2 million voters in the public sector. To them the words "stipend", "subsistence","allowance",etc are enough to justify the increment. In other words, a gift to them that they be happy. And when they are happy...

Daily Nippler said...

The shock will come after they win the election.....everything will go up, and after the payrise there will be increase in income tax, toll will go up and there will be more shoddy and leaking buildings

Sometimes I wonder how much real money we have in our national coffers....

senseless Malaysian no more said...

Just saw the news in the Star that KJ wanted TP to make a public apology to all Malaysians. Heck, you were not wrong by saying civil service as the dumping ground at all! KJ should be the one to apologise to all Malaysians for abusing his power. Oh well, does he have any power in the first place? He is just using his father in law as a cushion. What a joke. We will support you TP!

Singaporean at large said...

Malaysians, stop complaining and start proposing solutions, and work on it.

Else don't blame Singapore for moving ahead again.

Anonymous said...

Its time civil servants are more professional and honest in their work. Heads of departments should ensure they are there, work on time and not wasting time at canteens.

Try visiting the canteens at public universities.......and you will see

Anonymous said...

Tony,

While it's commendable that you have sacrificed personal gain by joining the DAP, with the view to achieving the utopian ideal of justice and social progress, and there is little doubt you are right about "our civil service [being] the dumping ground for the politically sensitive constituency of unemployed Malay graduates", would such "harsh" comments towards the Malays help you (and the DAP) achieve your goals?

Do you not think that you would be more successful in instilling change if you try a softer approach, by understanding the Malay psyche, and appealing to their "hearts" and "minds", bearing in mind that Malay "heartlanders" hold the majority of thevotes?

Perhaps in our pursuit of excellence, we inevitably aim for supremacy, since there is a fine line between the two. I'm not sure if you agree with me, but I don't think proving the Malays' inferiority and alluding to their lesser abilities would endear yourself to them. Only a minority of the people in this world (regardless of race) have your level of intellect and accomplishments; the majority have less complicated levels of reasoning.

Do you not agree that if you were to put yourself in their shoes, you might learn something that could help you in your political aims?

Yours sincerely,
mk

Anonymous said...

Well, first of all let us put aside the issue whether civil servants deserve a salary hike or not. At the same time, let us not discuss about whether the hike will improve civil service and productivity, because this is largely dependent on individual mindset and is uncontrollable.

The whole hiking issue can be viewed from two main perspective - political and economics. Political in the sense that they have chosen the perfect timing to announce it. Even though BN keep on insisting that they still enjoy the people's support (which i do not deny because 80% of Malaysians do not care who is governing them), they are aware that the truth is far from reality and there have been some slight swing. This announcement further confirms my speculation (and most people's) that a GE is evident, most likely end of this year.

Then from the ecnonomics point of view, a hike in salary literally mean a higher disposable income. This extra income can benefit the country in two ways - promote goods consumption and investment. People may choose to spent everything on consumables, or save them in banks and investments. Higher good consumptions means higher sales, and the private sector benefits as well. If they choose to save, then these surpluses will be used to finance investment opportunity, again the private sector gains.

Another way we can look at is the social implication. We have and already assumed that with the hike, civil servants will lead a much better life, which in turn would reduce the number of white collar crimes. But how true is it, i believe it is too early to gauge. However, i do believe that these people will have a better life, especially the children.

So, let's hope that the hike will be of good use to Malaysia as a whole.

Anonymous said...

Hii there,

I always admire your achievement as one of the young Malaysian millionaires. By the way, I’m a young civil servant and a Malay. To say that it is a ‘dumping ground for Malays’, for me it is just a shallow assumption which I used say the same thing before I joined the service. By the way again I’ve just declined a job offer in Dubai three days before you write this post.

There are more than 200 persons better than me in my ADS (Administrative and Diplomatic Services) batch. Trust me they are. More than 40% of them use to work in MNC with average salaries around RM8K. Majority of them are here serving the nation because they choose to not because they have to.

Let us stop this racial card thing and let concentrate more on how to make things better in this country. It is an uphill battle but at least, each and every one of us can make a different.

“Do you not think that you would be more successful in instilling change if you try a softer approach, by understanding the Malay psyche, and appealing to their "hearts" and "minds", bearing in mind that Malay "heartlanders" hold the majority of thevotes?”

MK, I agree with you. Tony If you want DAP becoming a multi racial party, such statement like this should stop coming from their leaders like you.

Thanks,

Cendanasari………..

PS; to singaporean by large, stop thinking that you are somehow better...

123 said...

Let us all vote for the CORRECT CANDIDATE and POLITICAL PARTY in the coming elections and put this snafu behind us.

Anonymous said...

Dear Cendanasari, ADS is the creme de la creme of the public service (one of my friend got selected for it and i must say, he is one brilliant chap) and thus it is of unfair leverage that you should use ADS as an example in your rebuttal.

Nevertheless, like yourself i am also sick and tired of politicians using the race card to play the game. Nonetheless, IN CONTEXT of what TP say in his posting, while he may have called a spade a spade (it is undenialble fact that malays are the majority in the civil service) the government must work to get a lean and efficient civil service on the road to maximise each civil servants' potential and allow them to grow to contribute to their respective departments.

a bloated and inefficient civil service does no justice to the rakyat (to which they are to serve)and this is what TP is saying. nothing racial, just facts and suggestion that the government should now focus on maximising each servants' potential thats all.

kucau said...

i certainly aggree with some of the points here.

"One of the key objectives under the privatisation programmes launched by the then prime minister, Tun Dr Mahathir Mohamad, was to reduce the civil service population to just above 500,000"

can u quote your source here?

"By absorbing these graduates who were not able to obtain gainful employment in the private sector, it results not only in a poor quality workforce within the civil service, it also increases the Government's financial obligations."

are u sure these graduates are not good enuff. you were saying this gradutes were malay graduates.My point is , have u seen the adverts in paper where most of the jobs need experiences where of course these newly graduates wont be able to secure. the main problem IS job demand and supply are not balanced.

my second point is , have u seen the "Chinese only" jobs or mandarin required jobs? Do u realize that this is part of discrimination. My brother is working in one of public listed chinese company and he is the only malay there ( the only malay executive). At the company annual meeting the bosses clearly indicated new policies of chinese only opportunity for new job offered.(please dont fuck me me Why there is NO single CHINESE bloggers addressing this?

http://aisehman.org/?p=124

Anonymous said...

pls...no four letter words...

Anonymous said...

ai seh man!!! government contract also for all bumi only!

its a big circle of discrimination between all races if you ask me! and you know what kucau? it will not end anytime soon coz unless the root cause of this dilemma is resolved.

the root cause is the need of the NEP to be updated (NOT done away). eradication of poverty in this country must no longer be based on racial lines. instead eradication of poverty should be based on need.

cause you know, poverty and hunger does not discriminate either.

Anonymous said...

I still want to see your debate with son-in-law go ahead. This is a great opportunity to listen to both sides and let the public decide themselves with all the information they can get.

Anonymous said...

the unfortunate thing is that everything here seems to be drawn on racial lines - sigh... 50 years after independence... we are still not Malaysian. the question to address is this - why are there so many graduates who are unemployed - or unemployable? is it because many don't deserve to be in university in the first place? having been in a local university, I can assure you that many DON'T deserve to be in the ivory tower. perhaps the answer would be to regulate university entry, reduce the intake, so that the graduates we produce are truly worth their degrees. stop the dumbing down taking place at schools (i blame KBSR) and other learning institutions. increased competition can only be a good thing - let the Darwinian method prevail, and the strongest survive, instead of producing half-baked grads, including a science grad who once told me that snakes are not vertebrates as they can slither and curl their bodies?!! tony - i think you are doing a great job with this blog and the gauntlet you threw down... but it doesn't detract from the fact that the DAP is increasingly seen (despite its multiracial beginnings) as a Chinese party, just as PKR is seen as a Malay party and as such appeal to a select group. whither the Malaysian party?

vader said...

The Government is obviously trying to alleviate the unemployment issues among graduates but they should realise that this is just a short term solution. Hiring graduates who are not well equipped with skills and the right attitude will have worse consequences. As these graduates progress over the years within the public service, they will soon take on other leadership roles within the Civil Service resulting in sub-par policies and will only cause Malaysia's downfall in the future.

The Government should adopt a hiring policy like many globally successful companies. Hire top talent and remunerate them competitively so that we will have competent leaders to lead our country. The Government is made up of people, if we have people who are not very good, then the nation will suffer. Malaysia is a country with plenty of natural resources and talent and will require smart people to channel the resources and talent in making our country a regional economic powerhouse. If a small country like Singapore ca have such strong economic success, Malaysia certainly is more than capable over achieving greater success. We just need smart and well trained leaders...and the Government should start looking into getting that talent in and retaining them.

I've read abit about this Khairy guy and his credentials from Oxford. Graduating from Oxford doesnt mean he can think very well. In my experience as a senior executive of a global company, I have recruited many graduates from top tier schools whom i eventually realised were duds. So, I suggest Malaysians should not overhype this Khairy guy just because he is an Oxford graduate. Obviously without his father-in-law, he would not have the attention he is getting now. Has anyone questioned what this young man has achieved on his own??

I know there are many Malays from Ivy league schools who are truly intelligent and capable that can take on a leadership role within Malaysian politics/Government and could really do something for the country instead of inciting racial disharmony. So, I would recommend Civil Service leaders to start recruiting capable people from top Universities and MNCs to take an interest in building our country. DAP should start recruiting Malays from top Universities or MNCs to address the needs of the Malays at the grass root level.