Hong Kong's Civil Servants Angered By Pay Cut Plans

by Mary Swire, Tax-News.com, Hong Kong

12 July 2002

Hong Kong's Legislative Assembly voted this week to slash the wages of civil servants by between 1.58% and 4.42%, beginning on October 1.

The wage bill for the jurisdiction's 180,000 civil servants accounts for 80% of the government's operating expenditure, and an amazing 66% of total spending. As the Hong Kong economy continues to falter, many feel that reducing the huge public sector wage bill represents a step in the right fiscal direction.

However, unsurpisingly the civil servants are furious, as evidenced by a mass demonstration held last Sunday. Speaking to the Reuters news agency, pro-labor legislator, Lee Cheuk-yan railed at the unfairness of the cuts, approved by a slim margin of 32 to 26.

'Is the deficit caused only by civil servants, should it be shouldered only by civil servants, why not raise taxes? Why not tax the rich more?' He asked, musing: 'Would everyone be happier if civil servants were treated as badly as those who are maltreated in the private sector?'

Speaking following the approval of the pay cut legislation, Secretary for the Civil Service, Joseph Wong attempted to adopt a reassuring tone, and announced to CNN that the new law will not be used to secure further wage reductions at a later date:

'This is one-off legislation to close a legal loophole and mandate this cut,' he told the news service. 'The legislation cannot be used to mandate any further reductions.'

However, this assurance will be cold comfort to the SAR's many hundreds of thousands of civil servants come the autumn. One civil service union has already announced that it plans to sue the government when sufficient funds have been raised.

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