Sharing the pain by sharing civil service pay cut won't wash

PUBLISHED : Wednesday, 17 June, 2009, 12:00am
UPDATED : Wednesday, 17 June, 2009, 12:00am

People could be forgiven for feeling bewildered about the pay cuts for Donald Tsang Yam-kuen's ministers and their assistants and some civil servants announced yesterday.

The results of the annual pay trend survey of private sector salaries showed all civil servants' pay could be reduced, but the 5.38 per cent pay cut covers only 18,000 senior civil servants. The middle and lower ranks will have their salaries frozen. The survey findings showed their pay should be cut by 1.98 per cent and 0.96 per cent respectively to bring it into line with that of counterparts working for private companies.

With the effects of the global economic crisis still being felt and with stirrings of political discontent evident, it is not hard to understand why the government has decided to be kind to most civil servants. Trade unions had warned that if civil service pay were cut, private employers would cut pay too, darkening the public mood.

However, the selective application of the survey's findings raises questions about the integrity of the mechanism for deciding public sector pay rises and reductions. Critics say the mechanism will no longer have any credibility if its findings only produce pay rises or freezes, but no pay cuts.

But whatever disquiet there is in the civil service at the selective pay cuts will be nothing compared with the controversy over the fact that Mr Tsang and his 33 political appointees have 'volunteered' to suffer the same cut in pay as senior civil servants. There are bound to be comparisons with the 10 per cent cut in pay for the then chief executive, Tung Chee-hwa, and his ministers in 2003.

Mr Tsang may have hoped to show his team are as keen as Mr Tung's was to share the pain of the economic slowdown with the people, but taking the same pay cut as civil servants - whose salaries are largely determined by market forces - blurs the message the chief executive hoped to convey.

It will be dismissed by critics as belated and half-hearted - a product of muddled thinking about the meaning and purpose of a pay cut.

The Tsang team's handling of the issue says much about their lack of self-belief and their inability to make the right decisions.