For discussion FCR(97-98)51
on 7 November 1997

ITEM FOR FINANCE COMMITTEE

HEAD 136 - PUBLIC SERVICE COMMISSION
Subhead 110 Honoraria for members of committees

Members are invited to approve a change in the frequency of adjusting the rate of honorarium payable to members of the Public Service Commission from once every two years to annually.

PROBLEM

The Chairman of the Public Service Commission (PSC) has requested the Administration to revise the rate of honorarium payable to members of the PSC on an annual basis in line with the practice of making annual adjustment to civil service salaries and related allowances.

PROPOSAL

2. We propose to revise the rate of honorarium payable to members of the PSC annually. The revised rate should take effect on 1 April.

JUSTIFICATION

3. At present, the PSC comprises the Chairman and six members¹. The Chairman works full time and we revise his remuneration in accordance with the civil service pay adjustment annually. All the six incumbent members undertake the work of the Commission beside their main occupation and receive an honorarium of $12,500 per month. The Secretary for the Treasury (S for Tsy) revises the rate of the honorarium in accordance with the change of the Consumer Price Index (A) (CPI(A)) biennially under delegated authority. S for Tsy last revised the rate of honorarium on 1 April 1997.

4. The Chairman of the PSC considers it appropriate to revise the rate of honorarium payable to members of the PSC annually so that the rate can follow more closely changes in the cost of living. We accept the Chairman's request. Subject to Members' approval, S for Tsy will revise the rate of the honorarium annually under delegated authority with effect from 1 April. The next revision will take effect from 1 April 1998.

FINANCIAL IMPLICATIONS

5. On the basis of the current rate of honorarium and a 6% annual increase in the CPI(A) and assuming that all the eight members are appointed, the additional cost arising from the proposed change will be $72,000 for 1998-99.

BACKGROUND INFORMATION

6. The PSC is an independent statutory body constituted under the Public Service Commission Ordinance (Chapter 93). Section 7 of the Ordinance provides that the Chairman and members of the Commission are entitled to such remuneration and allowances as may from time to time be voted by the Legislative Council. The PSC is responsible for advising the Chief Executive on appointment, promotion and discipline matters in the civil service.

7. In February 1981, Members approved a monthly rate of $4,000 to each part-time member of the Commission with effect from 1 January 1981. The basis for the award of this honorarium was that the work which members of the Commission were asked to undertake was of a continuous and time-consuming nature requiring much more time than could reasonably be expected of a member of other advisory committees.

8. On 26 November 1986, Members approved a revision in the rate of honorarium from $4,000 by $1,500 to $5,500 a month with effect from 1 April 1987 to take into account inflation over the period January 1981 to September 1986. At that meeting, it was agreed that the rate of honorarium should be revised every two years on the basis of increases in CPI(A).

9. On 9 January 1989, Members approved a revision in the rate of honorarium from $5,500 by $800 to $6,300 a month with effect from 1 April 1989 and delegated the authority to approve future revisions of the rate of honorarium every two years to S for Tsy. We last revised the rate of honorarium to $12,500 per month on 1 April 1997.

Civil Service Bureau
October 1997

1 -- Under the Public Service Commission Ordinance (Chapter 93), the Chief Executive can appoint up to a maximum of eight members.