The comparative salary costs for a full financial year
for the four options are -
Civil Service only
$ million
Option (a)
669
Option (b)
695
Option (c)
736
Option (d)
671
Recommended Option(s)
18
Leaving aside for the moment the extent to which, if at all, the budgetary and economic situation should affect the size of this year's adjustment to Civil Service salaries there are no considerations, other than those already mentioned, which indicate that an award should not be based directly on the evidence of private sector experience as revealed by the PIU's Pay Trend Survey figures. Of the four options, option (a) is the most logically defensible as an application of the Pay Trend Survey figures. It could, however, lead to management problems if it caused dissension within the Hong Kong Chinese Civil Servants Association and the Police Staff Associations which have a large membership paid from the middle band. Option (b), which might avoid these management problems, is objectionable in principle in that an award on this basis is a departure from Pay Trend Survey figures and previous practice, and such a departure is unjustified on structural grounds. Option (c) presents no structural problems. The idea of a flat rate increase meets in full the advice of the Standing Commission, and, at 17%, it is likely to avoid any staff management problems. If this were a paramount consideration, option (c) would be the Administration's preferred option, but it is objectionable in principle, sets an undesirable precedent, and is the most costly option. Option (d) would preserve the tapered pattern of previous awards, but would be a deliberate departure from the Pay Trend Survey figures by the Administration and it would be argued that this was unfair to those staff on the top band.
19
A majority of officials favour option (a), on the grounds that it is logically defensible, although they admit that there could be an unfavourable reaction from staff paid on the middle band of salaries (e.g. members of the Hong Kong Chinese Civil Servants Association and the Police Staff Association). A minority view favours the much more expensive option (c), on the grounds that this will avoid any trouble with any of the Staff Associations. Yet another minority view favours option (d), arguing that the effect of the tapering proposed largely eliminates the problem of adjusting the middle band by a smaller percentage increase than the top or bottom, and also the cost of this option is virtually the same as option (a).
CONFIDENTIAL