Hong Kong officials’ rising pay doesn’t square with our financial winter

Christmas came early for Chief Executive John Lee Ka-chiu and his team this year, and I don’t mean his duty visit to Beijing over the weekend. It came quietly in July, when salaries for politically appointed officials increased by 1.8 per cent. These pay rates are adjusted in line with the Consumer Price Index (C), which measures the impact of consumer price changes on Hong Kong’s high-spending households – the top 10 per cent splashing out HK$50,400- HK$95,900 per month, as opposed to the bottom 50 per cent spending HK$6,800-HK$29,200 monthly.

More often, we hear of adjustments to civil service pay because the process is better publicised. Every year, the Executive Council makes a decision after weighing the recommendations from the pay trend survey against factors such as the economy, the cost of living, the government’s fiscal position and civil service morale.

Although the most recent pay survey suggested raises ranging from 4.01 per cent to 5.47 per cent for different levels of the civil service, Exco decided on a 3 per cent increase across the board. It’s a dedicate balancing act, given that manpower is tight while the government is facing a deficit. At the end of the day, it has to be palatable to the public.

In justifying Exco’s June decision, the government cited a growth forecast of 2.5 to 3.5 per cent for 2024. But last month, it had to downgrade the forecast to 2.5 per cent after a weaker-than-expected third quarter expansion of only 1.8 per cent. At least we are still expected to reach the lower threshold of the forecast.

Unfortunately, the city’s deficit will more than double to HK$100 billion, from the HK$48 billion previously forecast for the 2024-25 financial year. Financial Secretary Paul Chan Mo-po broke the bad news this month, citing the property slump and weak corporate performance.

And it was against this backdrop that the pay for principal officials and civil servants returned to the limelight. Thanks to a question posed to the government by Exco convenor Regina Ip Lau Suk-yee last week, the public found out that politically appointed officials not only got a raise in July, but that salaries for bureau chiefs and political assistants had increased by more than 24 per cent over a decade.