Efforts to reform civil service must continue
A telling comment on the government's timid plan to cut civil servants' perks came from their boss, Secretary for the Civil Service Joseph Wong Wing-ping. He says they will find the review broadly acceptable. Of course they will. The government has hardly touched their inflated, outdated benefits.
The cuts will save just $54 million in the first year - less than 2 per cent of the annual bill for civil servants' perks of $4 billion. Over five years they will save $600 million - less than 3 per cent.
It seems the government had no stomach for another fight. It has just won a court ruling that recent small cuts in inflated civil-service pay scales are lawful. These cuts put civil servants on the same footing as other workers who suffered during a time of recession, deflation and budgetary constraint. The court ruling also paved the way for scrapping or reducing perks such as overseas education allowances for the children of civil servants and housing allowances.
But the government's nerve has failed. Commentators on public administration were quick to cite political considerations. The oft-stated need to maintain social harmony is one. Another is that Chief Executive Donald Tsang Yam-kuen, facing re-election in less than two years, cannot afford to put civil-service morale - and support - at risk. As a result, the government has passed up an opportunity to embark on overdue reforms of a bureaucracy widely seen as bloated, inefficient and over-privileged.
Civil servants who joined before 1997 continue to be able to opt out of the Hong Kong education system and have their children educated overseas at a cost to the public purse of more than $600 million a year. Housing allowances which account for a large part of the $4 billion annual perks bill remain largely untouched.
The loss of housing-related allowances for air conditioning and furniture will not cause too much discomfort. Little wonder the civil service union agreed that the cuts were mild and would not harm morale.
The Basic Law guarantees civil servants that their terms of employment shall be no less favourable than before the handover, and that the pre-handover system of the civil service shall be maintained. But the Court of Final Appeal has ruled that this does not mean no element of the system can ever be changed.
Hong Kong itself has changed significantly since the handover, but there is a perception the civil service remains mired in old ways and has an old mentality. The economic slowdown and public criticism stiffened the government's will to wield the knife and make the civil service leaner, more efficient and less of a burden on the public purse. But ever since the economy began to rebound, there has been evidence of a wavering in the government's resolve. Hopes that the recent court judgment would put reform back on track have been dashed.
The overseas education allowance is a striking example. It was introduced more than 40 years ago for the benefit of British expatriates and extended to local civil servants in 1972. It has no place in modern Hong Kong and should never have survived the handover. Nearly 6,000 students are receiving the allowance and many times that number of civil servants are still entitled to claim it. There is no justification for providing such a privilege to one particular group in society. It is ironic that at a time when Hong Kong is reforming its education system in order to get away from the British model, we are still paying for an elite group of civil servants to have their children educated in Britain.
The government should not give up on efforts to shake up the bureaucracy. For example, it should continue reducing the headcount, which still stands at more than 160,000.
There is no question that morale is important. A leaner organisation with bold policy initiatives to implement would be better for morale and better value for the community. Next month's policy address would be a good time for Mr Tsang to show the way forward.
