SINGAPORE: Economists measure the true cost of a decision not by the price attached to it, but by the next best alternative given up to make it.

That idea, opportunity cost, is the term Prime Minister Lawrence Wong and Coordinating Minister for Public Services Chan Chun Sing both reached for in Parliament on Tuesday (Sep 8), explaining why ministerial salaries needed updating after 15 years without an adjustment.

Both used it to describe what a capable person gives up by choosing political office over whatever else they might have done with their working life.

The numbers show how much larger that forgone alternative has grown since 2011. A minister at the lowest MR4 grade with the current reference salary of S$1.1 million will receive about S$1.2 million, after the one-off adjustment of up to 9 per cent. But by my calculation, that adjusted salary is worth 14.5 per cent less than the original S$1.1 million once deflated back to 2011 prices using the Consumer Price Index.

Over the same period, median Singaporean wage from employment grew by roughly 39 per cent in real terms, based on Ministry of Manpower data. Whatever a capable Singaporean weighed against political office in 2011, they are weighing something considerably heavier now.

THE INDIVIDUAL’S OPPORTUNITY COST

Mr Wong gave this side of the calculation an unusually concrete airing. Three of his most senior ministers, holding the trade and industry, home affairs and foreign affairs portfolios, will all be past age 70 by the next term of government.

He described approaching several senior civil servants and private sector chief executives to join his team, none of whom accepted. He was careful to add that none of them told him pay was the reason, and that he would not want a candidate whose decision turned mainly on money.

Mr Chan put the going rate for chief executives of major companies at S$6 million to S$7 million a year, several times more than the revised MR4 benchmark of S$1.8 million.

The framework has always tried to manage this gap through a benchmark referenced against the median annual income of the top 1,000 Singaporean earners. There is then a discount of 40 per cent for what the government calls the ethos of political service or of commitment, one of the three principles of calibre, commitment and clean, that the 2012 and 2017 review committees affirmed and that the most recent committee has affirmed once more.

This piece was first published in CNA on 10 September 2026.

Christopher Gee is deputy director (research) and senior research fellow at the Institute of Policy Studies, National University of Singapore.

Top Image from Canva.