Civil servants leave the government offices in Tamar at lunch time on May 16. The 2024 Pay Trend Survey Report suggests rises of up to 5.47 per cent for civil servants this year. Photo: Jelly Tse
Opinion
Alice Wu
Alice Wu
Hong Kong civil service pay rise will be a tough sell to weary public
The government finds itself facing calls for civil servants’ salary increases when it is trying to curb a ballooning budget deficit
This may be hard to swallow for Hongkongers amid a sluggish economy with small local businesses struggling
The tentative findings of a pay trend survey suggest that salary increases of up to 5.47 per cent could be on the cards for Hong Kong’s civil servants. This is going to be a tough sell to the public.
The survey of data concerning more than 130,000 employees in 113 private-sector companies points to pay rises of 4.01 per cent for high-ranking civil servants, 4.32 per cent for mid-ranking ones and 5.47 per cent for junior civil servants. Should the government approve the latest round of pay increases, it would be the third in three years.
Given the exodus of civil servants in recent years, the government, like the private sector, faces the challenge of recruiting and retaining talent. Remaining competitive in terms of salary is an important factor.
This is why the pay trend survey results are part of the government’s calculations in deciding whether to raise, freeze or cut civil servant wages and by how much. But the government also factors in civil service morale, the state of the economy, the cost of living, and its own fiscal position.
The views of the civil service unions and groups are quite consistent; they think the government should hand out pay increments at the levels suggested by the pay trend survey, if not higher. Lawmakers from the labour sector can be counted on to suggest the same every year.
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But the government is caught between a rock and a hard place because of its fiscal position and the city’s economic challenges. Federation of Civil Service Unions CEO Leung Chau-ting has already called on the government to refrain from using the city’s budget deficit as an “excuse” to limit the pay rise.
So if an increase is imminent, are we just haggling over the amount? The point of contention appears to be whether the deficit is a legitimate excuse. If it is, it’s an excuse worth HK$101.6 billion (US$17.4 billion).
Despite talk of a recovery, the economy remain sluggish. Local businesses continue to struggle. Once the Covid-19 pandemic was declared over and the government lifeline to businesses – especially the city’s small and medium-sized enterprises – dried up, many have been unable to fend for themselves and cope with the slow pace of recovery. A lot of small businesses have had to shut down.
It is for this reason that human resources professionals have reacted strongly to the survey. Alexa Chow Yee-ping, managing director of recruitment agency ACST Consulting, has urged the government not to follow the suggested increases. She said the survey findings failed to reflect the reality on the ground, pointing out a 2-percentage-point deviation from the private sector, which has seen rises of between 3.3 and 3.5 per cent this year.
If we look at the state of the economy, perhaps nothing makes the situation clearer than the fact government tax revenue fell by HK$18.2 billion, to HK$342 billion in the last financial year. With rising public service fees and few budget sweeteners, selling a third consecutive round of civil servant pay rises to the public will be a significant challenge.
Given how badly recent roll-outs of some government initiatives are going, officials will have plenty of explaining to do. The Executive Council should also take into account government performance and popular perceptions. Does the public feel short-changed in daily issues by government leadership?
Financial Secretary Paul Chan speaks during a press conference on February 28 following the release of the 2024-25 budget. Photo: Elson Li
Public service pay cuts are rare because they could set an example for the private sector to follow. So in the best interests of all salary-earning individuals in the city, it would be unwise for the government to cut civil servants’ pay as a means of reining in the ballooning deficit.
Financial Secretary Paul Chan Mo-po did not heed voices calling for such measures during his last budget. Instead, he proposed zero growth in the civil service and cutting recurrent government expenditure by 1 per cent for three consecutive years.
I suggest the government pay attention to the public’s reaction to the news that Cathay Pacific paid more than HK$60 million to its 20 executive directors last year, almost 20 per cent higher than before the pandemic in 2019. That should certainly shed light on how far to take a pay adjustment exercise.
Alice Wu is a political consultant and a former associate director of the Asia Pacific Media Network at UCLA
