Basic Law of the civil service rules in favour of upward pay shift

PUBLISHED : Friday, 15 July, 2005, 12:00am
UPDATED : Friday, 15 July, 2005, 12:00am

'Oh what tangled webs we weave when first we practice bureaucrats to please'

With apologies to Sir Walter Scott

ONE OF THE more notable features of modern political life is the obsession with constitution mongering. Let any new government establish itself, or even an existing one reform itself, and immediately everyone is busy dreaming up new ground rules.

I can understand the reasoning. Government ought to have some restraints imposed on it and citizens ought to have their civil liberties defined. It is best done with laws that even government will find hard to bend.

But it has two regrettable features. The first is that the more extensive the constitution, the greater the power that comes to lie with a non-elected judiciary rather than any elected assembly. The second is that constitutions have a way of going off the rails when confronted with the dynamics of society.

We have already had our own examples of this with the Basic Law and I shall eat my hat if reinterpretations by the National People's Congress are not required on a regular basis because of events that the drafters never envisaged.

We have a possible case of it again at the moment with the ruling by the Court of Final Appeal on the provision of the Basic Law which states that the pay and conditions of civil servants should not be less favourable than before 1997. This does not prohibit the government from making pay cuts, our top judges ruled.

Now look at the first chart. It shows you an inflation index (deflator, it is actually called) for compensation of government employees. The figures are derived from our gross domestic product statistics and they say that government pay is now pretty much back in line with where it was in June 1997.

Civil Service Secretary Joseph Wong Wing-ping has now also said that there will be no further pay cuts. All that the ruling does is remove the prospect that the government might have to pay out about $9.6 billion in compensation for pay cuts since 1997.

Now turn to the second chart. The red line on top once again represents that inflation index for government pay while the blue line represents the movement of the consumer price index over the period.

Now here is the question. If the cost of basic essentials is now $90, where it was $100 in 1997, and civil servants are still paid $100 as they were in 1997, are their terms and conditions truly the same as they were in 1997 or are they, in fact, a good deal better off after adjusting for their cost of living?

I think it is pretty obvious that the second of these is actually the case and, if so, is there not a good argument here for a further 10 per cent pay cut? What about it, Mr Wong?

Take note here also that civil servants are already superbly compensated for their efforts. A comprehensive survey commissioned by the Hong Kong General Chamber of Commerce two years ago found that they were 229 per cent better paid than their private sector equivalents when all perks and bonuses are included. But if civil servants wish to say that a further 10 per cent pay cut would be utterly unfair, then I have an alternative compensation framework to propose.

Inflation is now rising again. Let us say that, for example, prices over the next two years rise by 10 per cent. Would they be willing to accept a pay freeze over that period on the grounds that, by their present reckoning, and Mr Wong's too, their terms and conditions are still the same as in 1997? Sauce for the goose is sauce for the gander.

They will say no, of course. In these circumstances they will take the other tack - civil service pay may go up when prices go up but may not go down when prices go down. They will also argue that the Basic Law limits only their downside. Get set for the already wide gap with the private sector to grow even wider.

And this is the sort of thing that happens when constitution drafters fool themselves that they have it all sorted out. Oh what tangled webs indeed.