Fringe benefits back on the chopping block

PUBLISHED : Thursday, 14 July, 2005, 12:00am
UPDATED : Thursday, 14 July, 2005, 12:00am

Civil service unions play down the attractiveness of colonial-era perks, but say they will fight to hang on to them

A review of civil servants' allowances that cost taxpayers $4 billion a year will begin again soon after the top court upheld laws imposing pay cuts on government employees.

Civil service unions fear yesterday's Court of Final Appeal ruling will give the government an 'imperial sword' to cut members' fringe benefits. They say confrontation is inevitable if benefits are scrapped unreasonably.

In the first part of a two-stage review launched last year, officials rolled out detailed proposals for reducing colonial-era perks such as holiday subsidies and allowances for air conditioning and furniture.

The annual leave passage allowance would shrink by 15 per cent to between $6,130 and $33,670 under the plan. Those promoted to directorate ranks would not be able to claim subsidies for spouses. Housing subsidies and allowances for sending children to study in Britain are due for review in the second phase. The review was put on hold pending the court's ruling on whether cuts in benefits and salaries infringed the Basic Law.

The perks add up to $4.35 billion in the current financial year, down from $4.38 billion in 2004-05, according to figures tabled to Legco by the Civil Service Bureau in April.

The president of the Federation of Civil Service Unions, Leung Chau-ting, said the ruling cleared the way for allowances to be cut.

'The judgment has given the green light for other reductions. It's like an imperial sword,' he said. 'But if the government behaves like an unscrupulous employer, we can but resort to confrontation to defend our rights.'

Peter Chan Pak-fong, chairman of the Hong Kong Senior Government Officers Association, did not agree that the government could bulldoze through other benefit cuts. 'We don't think [it] could take any unilateral action without seeking a consensus with us. It would deal a blow to staff morale.'

Mr Chan said cuts would be 'negotiable' as long as the government did not go below the levels that existed at the time of the handover to Chinese rule. 'The principle is that what we are entitled to as part of the appointment conditions should not be taken away,' he said.

He also sought to play down the impression that senior officials were fat cats.

'Overseas education allowances aren't very attractive. As the subsidy isn't sufficient to cover increasing school fees, not everyone eligible will apply.'

However, government figures show the number of people receiving the overseas education allowance is expected to rise 9 per cent from last year, to 5,727 this year. The number of local education allowance recipients would also grow by 4 per cent, to 21,270.

Secretary for the Civil Service Joseph Wong Wing-ping said the government would make reference to the judgment and continue the review. He promised there would be consultation with the staff side.

'We shouldn't presume that there will be cuts in benefits,' he said. 'Certainly, the ruling will provide a reference. But I stress that any benefit reviews will follow the principles of lawfulness, reasonableness and fairness.'

He said the government had to ensure the allowances were in line with the interests of the civil service and the community.