For discussion FCR(97-98)16
on 13 June 1997

ITEM FOR FINANCE COMMITTEE

CIVIL SERVICE PAY ADJUSTMENT 1997

Members are invited -

1. to approve, with effect from 1 April 1997 -
   1. an increase in salary of 6.90% for the Governor and civil servants in the directorate and the upper pay band;

   2. an increase in salary of 6.81% for civil servants in the middle and lower pay bands; and

   3. similar pay adjustments for the judicial service and those subvented non-government organisations (NGOs) which base their salary structure on civil service pay scales;

2. to note that supplementary provision of about $4,959 million will be required in 1997-98 for the Governor, the civil service, the judicial service, reimbursement to the Housing Authority, the auxiliaries and NGOs subvented on a deficiency grant basis; and

3. to note that supplementary provision of about $1,308 million may be made available, on application, for NGOs subvented on a discretionary grant basis, having regard to the merits of each case.

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PROBLEM
PROPOSAL
JUSTIFICATION
FINANCIAL IMPLICATIONS
BACKGROUND INFORMATION
Master Pay Scale
Model Scale 1 Pay Scale
Police Pay Scale
General Disciplined Services (Commander) Pay Scale
General Disciplined Services (Commander) Pay Scale
General Disciplined Services (Rank and File) Pay Scale
Judicial Officers’ Salary Scale
Judicial Officers’ Salary Scale
Directorate Pay Scale
Directorate (Legal) Pay Scale
Training Pay Scale
Technician Apprentices' Pay Scale
Craft Apprentices' Pay Scale
Independent Commission Against Corruption Pay Scale
Independent Commission Against Corruption Pay Scale

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PROBLEM

Salaries of the Governor, civil servants, members of the judicial service and staff in subvented non-government organisations (NGOs) need adjustment to reflect movements in private sector salaries in the past year.

PROPOSAL

2. We propose increases in salary with effect from 1 April 1997, of 6.90% for the Governor and civil servants in the directorate and the upper pay band, and of 6.81% for those in the middle and lower pay bands. The revised civil service pay scales are at the Enclosure.

3. We also propose similar pay adjustments for the judicial service and staff in subvented NGOs. The revised judicial service pay scales are also at the Enclosure.

JUSTIFICATION

4. The pay trend survey for the period 2 April 1996 to 1 April 1997 has produced the following results -

5. We propose to increase the salaries for the middle and upper pay bands in line with the net pay trend indicators (PTIs). For the lower pay band, we propose to bring the level of adjustment up to that for the middle pay band, in accordance with a recommendation of the 1988 Committee of Inquiry which was accepted by Government. For the directorate, we propose that the salary adjustment should, as usual, follow that for the upper pay band. The Governor's salary is set at 125% of the Chief Secretary's salary (D10 level).

6. The Staff Side of the Disciplined Services Consultative Council asked for a pay revision of 8.14% for the whole civil service while the Staff Sides of the Senior Civil Service Council, the Model Scale 1 Staff Consultative Council and the Police Force Council insisted on a pay adjustment of not less than 6.90% across-the-board. We consider that apart from the adjustment accorded to the lower band as set out in paragraph 5 above, there is no overriding reason to depart from the net PTIs. The PTIs reflect what happened in the private sector in the past year. Staff in the upper salary band in the private sector received a higher pay adjustment than those in the middle and lower salary bands, a fact the Government cannot ignore in determining the pay adjustment for civil servants. It is not possible, therefore, to meet the pay claims of the Staff Sides.

7. It is Government's policy to extend the annual civil service pay adjustment to the judicial service and to those subvented NGOs which follow civil service pay scales.

FINANCIAL IMPLICATIONS

8. The cost of the proposed pay adjustment for the Governor, the civil service, the judicial service and subvented organisations in terms of salary and allowances is estimated to be $6,267 million in 1997-98, calculated as follows -

9. The $3,569 million for NGOs is made up as follows -

10. We have not made any provision under individual heads of expenditure for the proposed pay adjustment in the 1997-98 Estimates. Subject to Members' approval of the proposal, we shall approve under delegated authority the supplementary provision required by individual departments and NGOs. We shall offset the supplementary provision, as necessary, by deleting an equivalent amount under Head 106 Miscellaneous Services Subhead 251 Additional commitments.

11. It is not possible to quantify at this stage the exact amount of supplementary provision needed under each head of expenditure. We estimate the total supplementary provision required for the Governor, the civil service, the judicial service, reimbursement to the Housing Authority, the auxiliaries and organisations subvented on a deficiency grant basis at $4,959 million. As regards organisations subvented on a discretionary grant basis, Members have previously agreed that their requests for additional funds to implement salary increases similar to those for the civil service should be considered on their individual merits, having regard to the extent to which each organisation can afford to meet the cost from its own resources. We estimate the total supplementary provision required by these organisations at $1,308 million.

BACKGROUND INFORMATION

12. Government's policy is that annual adjustments in civil service pay should be broadly comparable to pay adjustments in the private sector. To this end, we conduct annually a survey of pay trends in the private sector over the previous year. The results of the survey, after being discounted by the payroll costs of civil service increments, provide the basis for considering the size of the annual pay adjustment. We also take into account other factors including increases in the cost of living, the state of the economy, budgetary considerations, civil service morale, staff sides’ pay claims and any other relevant factors. Each year's pay adjustment is a separate and independent exercise, determined by the circumstances prevailing at the time.

13. This system of annual pay trend surveys has been in operation since 1974. The survey is conducted by the Pay Survey and Research Unit (PSRU) of the Standing Commission on Civil Service Salaries and Conditions of Service (the Standing Commission) and is monitored by the Pay Trend Survey Committee, which comprises members of the Standing Commission, the Standing Committee on Disciplined Services Salaries and Conditions of Service, the staff sides of the central consultative councils and Civil Service Branch. This year the PSRU collected data from 70 Hong Kong companies from all major sectors of the economy, covering the period from 2 April 1996 to 1 April 1997. The survey covers all full-time employees with basic salaries equivalent to non-directorate staff in the civil service, divided into the following three pay bands - upper band ($41,141 per month to $81,785 per month), middle band ($13,415 per month to $41,140 per month) and lower band (below $13,415 per month).

Civil Service Branch
June 1997

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Enclosure to FCR(97-98)16

Master Pay Scale

Point	As at 31.3.1997 $	Revised w.e.f. 1.4.1997 $
49	77,740	83,105
48	75,040	80,220
47	72,435	77,435
46 (44B)	69,900	74,725
45 (44A)	67,480	72,135
44	65,120	69,615
43	62,855	67,190
42	60,265	64,425
41	57,780	61,765
40	55,390	59,210
39	53,100	56,765
38	50,755	54,255
37	48,520	51,870
36 (33C)	46,340	49,535
35 (33B)	44,280	47,335
34 (33A)	42,320	45,240
33	41,140	43,940
32	39,290	41,965
31	37,530	40,085
30	35,845	38,285
29	34,245	36,575
28	32,695	34,920
27	31,230	33,355
26	29,830	31,860
25	28,490	30,430
24	27,245	29,100
23	26,020	27,790
22	24,850	26,540
21	23,725	25,340
20	22,595	24,135
19	21,525	22,990
18	20,505	21,900
17	19,535	20,865
16	18,595	19,860
15	17,710	18,915
14	16,860	18,010
13	16,050	17,145
12	15,135	16,165
11	14,245	15,215
10	13,415	14,330
9	12,650	13,515
8	11,880	12,690
7	11,145	11,905
6	10,455	11,170
5	9,835	10,505
4	9,215	9,845
3	8,655	9,245
2	8,120	8,675
1	7,630	8,150

Model Scale 1 Pay Scale

Point	As at 31.3.1997 $	Revised w.e.f. 1.4.1997 $
8	9,935	10,615
7	9,740	10,405
6	9,540	10,190
5	9,355	9,995
4	9,175	9,800
3	9,000	9,615
2	8,825	9,430
1	8,655	9,245

Police Pay Scale

Point	As at 31.3.1997 $	Revised w.e.f. 1.4.1997 $
59	169,350	181,050
58	(144,200) 139,950	(154,150) 149,600
57	(126,800) (123,200) 119,650	(135,550) (131,700) 127,900
56	(109,250) (106,100) 102,900	(116,800) (113,400) 110,000
55	(94,850) (91,950) 89,200	(101,400) (98,300) 95,350
54	81,785	87,430
53	78,615	84,040
52	75,455	80,660
51	72,635	77,645
50	69,940	74,765
49	67,435	72,090
48	65,085	69,575
47	62,755	67,085
46	60,480	64,655
45	58,305	62,330
44	56,160	60,035
43	54,150	57,885
42	52,170	55,770
41	50,210	53,675
40	48,435	51,775
39	46,680	49,900
38	44,975	48,080
37	43,470	46,470
36	42,065	44,965
35	41,070	43,865
34	39,595	42,290
33	37,960	40,545
32	36,365	38,840
31	34,765	37,130
30	33,205	35,465
29	31,675	33,830
28	30,165	32,220
27	28,660	30,610
26	27,415	29,280
25	26,595	28,405
24	25,810	27,570
23	25,040	26,745
22	24,470	26,135
21	23,855	25,480
20	23,230	24,810
19	22,640	24,180
18	22,010	23,510
17	21,395	22,850
16	20,805	22,220
15	20,230	21,610
14	19,655	20,995
13	19,100	20,400
12	18,560	19,825
11	18,105	19,340
10	17,500	18,690
9	16,975	18,130
8	16,455	17,575
7	15,980	17,070
6	15,495	16,550
5	15,040	16,065
4	14,600	15,595
3	14,155	15,120
2	13,735	14,670
1	13,330	14,240

Note : Figures in brackets represent increments.

Note : Figures in brackets represent increments

Note: 1 - Figures in brackets represent increments.

2 - *Creation of four new ranks in the Judiciary w.e.f. 1 July 1997, subject to Finance Committee’s approval on 20 June 1997.

Note: 1 - Figures in brackets represent increments.

2 - The Governor's salary is fixed at 125% of that of a D10 officer (i.e. $253,300 as at 31.3.1997 and $270,800 w.e.f. 1.4.1997).

Note : Figures in brackets represent increments.

Note : Figures in brackets represent increments.

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