TNAG-0695-FCO40-845-Policy-on-salaries-for-civil-service-in-Hong-Kong-1977 — Page 251

C.S. 166

CONFIDENTIAL ## 機密

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11

In support of its pay claim, in addition to the evidence of the PIU Pay Trend Survey for 1976-77, the Staff Side also mentioned:

(a)

the 16% increase in the Gross Domestic Product in the year 1976-77 and the healthy state of Hong Kong's economy and Government's finances;

(b)

that there was no Civil Service pay increase in 1975;

12

(c)

(d)

that the HK Productivity Centre's Report on Salary Trends and Fringe Benefits 1975-76, published in November 1976, indicated a pay trend in that period of the order of 9%, against the PIU's overall figure of 4%;

the "damaging" effect of across -the -board percentage increases, which increase the gap between the highest and the lowest paid.

In discussion in the Senior Civil Service Council on 27th May 1977, the Official Side caused the Staff Side to state that the points at paragraph 11(a) and (b) above were made merely to stress that, in their view, there were no economic or financial grounds at the present time for denying a pay increase, rather than to indicate the size of any increase.

13

On paragraph 11(c), the Staff Side accepted the Official Side's arguments that it was fundamental to Civil Service pay policy that both sides accept a common source of private sector pay data, which should be provided by the PIU. It was agreed that the Hong Kong Productivity Centre Report should not be taken as meaningful evidence in this pay review.

14

On paragraph 11(d), it is the Government's policy to follow the private sector. If the evidence shows that private sector employers are reducing differentials by giving larger percentage increases to their lower paid staff, the Government would take it into account. The Staff Side suggested that on occasion Government should give a lead in this respect, and that the 1976-77 Pay Trend Survey indicated that a tapering in favour of the lower paid was justified.

Cost of Living Changes

15

The cost of living in the period April 1976 to April 1977, as measured by the moving annual average of the following indices, has changed as follows:

CONFIDENTIAL

機密