Civil servants in Hong Kong have had a good ride, but it is now time to bring their pay into line with market rates. Government plans for a pay-level survey will help do this, but the pledge by Secretary for Civil Service Joseph Wong Wing-ping to freeze pay even if the results indicate that civil servants' salaries are too high undermines the credibility of the survey from the start. His actions are consistent with the view that the government and the civil service have, for decades, worked together to keep salaries high. As a result, many officials continue to be much better paid than those in the private sector. The government (which until July 2002 was composed of civil servants) has had virtually complete autonomy to set civil service compensation levels, with little input from the community. Thus, it has been able to ignore advice to carry out regular and frequent surveys that would have kept civil service pay levels in check. Indeed, the government has selectively accepted advice from committees of inquiry to keep civil service salaries high. The so-called 'established mechanism' for determining civil service salaries, which has relied on annual pay trend surveys, is nothing of the sort. The business community has, for a long time, criticised the practice of relying so heavily on pay trend surveys while ignoring regular and frequent pay level surveys. That is, there has been no consensus on the apparently determining role that pay trend surveys play. If relying on annual pay trend surveys was the 'established mechanism', then there should have been no deviations from the results. Yet a look at the past several decades indicates that the government has not followed the indicators on many occasions. This is hardly the record of an 'established mechanism'. Moreover, the government has reserved for itself the exclusive right to interpret the surveys. The criteria for translating survey indicators into actual pay adjustments have been so many and so vague that they have provided the government and civil service with considerable room for manoeuvre. The government has not prioritised the criteria, insisting that 'each pay adjustment is a separate annual exercise based on circumstances prevailing at the time'. Moreover, the process of interpreting pay trend surveys is shrouded in secrecy. Only when faced with a crisis of public finance has the government been forced to cut civil service compensation levels, and even then it spread them over several years. Hong Kong's non-democratic political system has allowed these arrangements to develop unhindered. A democratic Hong Kong would ensure more responsible community participation in the setting of civil service pay, which would make it more difficult for public-sector salaries to exceed those in the private sector. Bringing more citizens into the tax net would also sensitise voters to the relationship between taxes and civil service compensation levels, which would also moderate public-sector pay awards. Downsizing the civil service by turning most departments into executive agencies with much more authority over personnel administration would also ensure that pay levels in the public and private sectors were kept in step. In Hong Kong, we have a meritocratic and relatively corruption-free civil service of which we can be proud. But the practice of overpaying for public services is no longer sustainable. The Basic Law should not be an impediment to reasonable civil service pay. Arguably, it does not require that salary levels be literally the same as they were in 1997. Years of deflation have benefited civil servants. The government can demonstrate its commitment to serve the public by carrying out regular and frequent pay level surveys and implementing their results. The public demands no less. John Burns is chair professor of politics and public administration at the University of Hong Kong, and author of Government Capacity and the Hong Kong Civil Service
