Hong Kong government is setting a bad precedent on civil service pay

PUBLISHED : Sunday, 14 June, 2015, 11:51pm
UPDATED : Monday, 15 June, 2015, 8:18am

A pay rise that offers an extra half percentage point over what was expected is arguably not a big deal. But when it is arbitrarily awarded to 165,000 civil servants at an extra cost of HK$900 million, taxpayers are entitled to a satisfactory explanation. Unlike the previous norm of dovetailing figures obtained from the annual private sector pay trend survey, the government is offering an extra 0.5 percentage point on top of the 3.46 and 4.12 per cent, depending on existing salaries. The cost of the pay rise will increase from the original HK$7.3 billion to HK$8.2 billion as a result. Subject to final approval by the Executive Council and the Legislative Council, it will be the first time since the handover that all staff will get an above-market pay rise.

Although the existing mechanism allows the government to consider factors like the cost of living and staff morale, the administration has largely adhered to the pay trend figures over the past years, and with good reason. Not only is the method objective and reliable, it also avoids disputes and prevents staff wages from outstripping those in the private sector.

Secretary for the Civil Service Paul Tang Kwok-wai said the pay offers had taken into account, firstly, the rare situation that the pay trend figures were lower than the consumer price index of 4.5 per cent and, secondly, the concerns expressed by unions on the impact of staff morale arising from work challenges. There were six "precedents" in which the adjustments, including pay freezes, were different from the pay trend figures, he added.

As the minister said, staff morale cannot be quantified. The extra rise is simply arbitrary. The consideration given to inflation is also debatable. One has to wonder whether there will be a top-up whenever the pay trend figures fall short of inflation. The pay trend survey may not be perfect. But until there is a better alternative, it remains the most credible way to determine civil service pay adjustment. The deviation from the pay trend figures will not only pave the way for further arbitrary intervention, it may also fuel similar expectations and disputes in future.