CO129-602-4 Cost of living allowance 27-3-1948 - 11-12-1948 — Page 33

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Objections have been raised, which we endorse, to the linking of cost of living allowances of monthly-paid staff to the Food and Fuel Index, which covers limited range of items and is liable to considerable fluctuation from month to month. We therefore recommend the disassociation of these allowances from the Food and Fuel Index, and the linking, in common with basic salaries of $150.00 per month and over, of all cost of living allowances for monthly-paid staff to the more comprehensive end less sensitive Retail Price Index.

26. We further recommend, for monthly paid staff on basic salary of less than $90 per monsen, a cost of living allowance ranging from $75 per mensem to 87.50 per menscm which is rather moro than the average monthly allowance actually received since the prosent rates were introduced in September 1947. For salaries from $90 per month to loss than $150 per month, we recommend a cost of living allowance of 90% of basic salary. The application of this percentage would naturally result in cost of living allowances rather more than the average monthly allowance received. since September 1947.

27.

Turning now to the basic rates exceeding $150 per mensem and not exceeding $600 per meason we took note of the following passage in paragraph 191 of the Report of the Salaries Commission.

28.

#1

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The white-collar class has farod worse than manual labourers, and we have therefore proposed a steeply rising high cost of living allowance on basic salaries between $150 per month and $400 per month, the point at which junior expatriate officers come in. It should be pointed out in this connection that the increases in basic salary have been propor- tionately greatest in the lower grades and have tapered off considerably in the middle and lower ranges."

This passage as a whole indicates that the "hump" in the curve of the existing allowances, as plotted, in respect of the lower grades, in the Diagram attached to this Report, should bu maintained in recommending increased allowances. The second sentence further indicates, however, in view of the inadequacy of the prosent cost of living allowances, that the decline from the "hump" should be rathor more gradual than it is at present,

29. Although in our terms of reference we were instructed to consider the Singapore rates of allowance, wo feel that we cannot recommend an approach to then, in respect of salaries up to $600.00 per mensem, since the existing allowances in Hong Kong actually exceed the Singapore rates, and we have clear evidence of the need for an increase in the existing rates. U to this point, therefore, in the light of our evidence as to the extent of the need for en increase in cost of living allowances in Hong Kong, wo were unable to regard the Singapore rates as relevant to our problem. After this point, the Singapore allowances become increasingly relevant, our evidenco as to the needs of the staff indicating that an in- creasingly close approximation thercto should be effected.

30. From the basic salary of $600 per mensem to a basic salary of $1,400 por nensen, we consider that the allowances should so

be revised as to provide a steadily diminishing percentage allowance, until at the point of a basic salary of $1,400 per monson the same percentage in allowance should be paid as in Singapore.

31.

After $1,400 per mensen we recommend that the rates of cost of living allowance in Hong Kong should be the anne no those in Singapore, on the following grounds:-

(a) Substantial equality of revised basic rates of

salery in Hong Kong and fir

ingapore. We compared the revised basic rates of salary in the two

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