My Take

HK$17,500-a-month allowance actually saved city money

PUBLISHED : Friday, 04 September, 2015, 2:09am
UPDATED : Friday, 04 September, 2015, 2:09am

A government allowance paid to some middle-ranking and senior civil servants has got many people all hot and bothered.

At first glance, it does seem like a lot of money. But put in context, the so-called "non-accountable cash allowance" (NCA) has actually saved taxpayers serious money in the past decade and a half since it was introduced to replace the then long-standing housing benefit allowance.

At the moment, about 4,000 of the 170,000-plus civil servants qualify for the allowance, estimated to cost HK$839 million this financial year. It averages to about HK$17,500 per month per recipient. Next year, the total cost is expected to hit HK$1 billion. Civil servants who earn more than HK$60,000 automatically qualify for the allowance.

In 2005, only 85 civil servants qualified.

Considering the allowance is more than what many people make for an entire month, and that the city's median monthly household income is just HK$23,500, the news story understandably raises some eyebrows.

Now, far be it from me to defend our over-paid civil servants, especially those at the middle and higher ranks. But it must be admitted that the allowance actually saved us a massive amount of taxpayer money.

In 2000, the government was paying some HK$2.6 billion on the home financing scheme for civil servants.

The NCA was introduced by the Tung Chee-hwa administration as part of a belt-tightening exercise to cut the pay and head counts of civil servants during those long years of deflation. It saved billions relative to the old housing subsidy. The old housing benefits were truly generous and led to serious abuses such as the cheating scam for which one-time development secretary Mak Chai-kwong was convicted.

Today, we are not even approaching half of what the government used to pay for the housing of civil servants. In other words, NCA may be seen as part of a long-standing cost-saving measure.

It's certainly true that we pay our civil servants way too much. We may well ask why we have to pay them any allowance and pay so much for their regular salaries at all. But that's a different issue.