The soft corruption of civil servants' fat-cat perks

PUBLISHED : Sunday, 21 March, 2010, 12:00am
UPDATED : Sunday, 21 March, 2010, 12:00am

Bankers' bonuses have been a hot topic of late. Perhaps it is time to add the perks of civil servants to the debate. Their fringe benefits and high wages have made them truly a special interest group. A strong case has been made against the pernicious effects of the incentives to risk-taking created by the high bonuses of bankers and financers on an economy. In an analogous way, do our elite civil servants add to the problems of our dysfunctional political and social systems rather than contributing towards a solution?

Taxpayers will have to fork out HK$2.62 billion in the next financial year to pay for the fringe benefits of a few tens of thousands of civil servants, a year-on-year increase of 4.8 per cent. This does not include the HK$1.2 billion in overtime and extra-duty payments civil servants will receive, nor the generous pay packages of political appointees. Most of the fringe benefits are not enjoyed by civil servants who joined in the last decade or so. They are a legacy of the colonial era. But the cost is still substantial.

The bulk of the benefits will go towards the education of their children. Another large chunk will go towards paying for mortgages and housing subsidies. Bankers say their pay and bonuses are guaranteed by contracts. Senior civil servants can appeal to an even higher principle. The Basic Law, they argue, guarantees their conditions of employment should not be worse after the handover than those that existed before it. While bosses and officials fret about the potentially dangerous effects of a minimum wage on inflation, wages and labour costs, none of them point out the obvious: the actual negative effects of civil servants' high pay and perks. Enabling civil servants to educate their children overseas or outside the local public school system leaves them little incentive to improve it.

The civil service continues to play a key role in Hong Kong's success. But civil servants should be mindful of the political impact of their perks. They help create the perception that the civil service and the government in general are fat cats. By being part of an elite with job security, the outlook and interests of many civil servants becomes more aligned with those of the top businesspeople than of ordinary citizens. Collusion does not have to be a direct corrupt arrangement; a convergence of outlook, interest and influence is all that it takes. But our elite civil servants and their entrenched interests will not change until the system does; political reforms await them.