SCMP Tuesday, October 9, 2001

Pay cuts for civil servants 'unwise'


Cutting civil service wages would create unrest among one million people and dampen consumption, the head of an advisory committee said.
Yeung Ka-sing, chairman of the Standing Commission on Civil Service Salaries and Conditions of Service, issued the warning amid calls by some legislators for a cut in civil service wages.
There are more than 180,000 civil servants and more than 142,000 employees in bodies subsidised by the Government.
The Government spent about $4 billion this year on pay rises of 2.38 per cent for lower and middle bands and 4.99 per cent for the upper band.
Mr Yeung said that the number of people affected if pay cuts were brought in would add up to more than a million if there were four people in each family.
''Civil servants and subvented groups' employees have their own financial commitments, such as paying property mortgages and education costs of their children. A cut in their pay would affect their financial planning and create unrest among them,'' he said.
He added that people would reduce their consumption if they thought their wages were going to be cut. ''It would only dampen consumption. People would save more money and spend less,'' he said.
While a number of companies had sacked staff in the economic downturn, he did not think it would be appropriate to take this into consideration when working out the pay trend indicator of the private sector on which the Government determines the pay adjustment of civil servants.
''The pay trend is not written in stone. It is only a reference. The Government should consider staff morale and other issues as well,'' he said.
It is estimated that government spending on civil service pay will amount to $51.5 billion this year.