Transcript of remarks by SCS on civil service pay adjustment at media session (with video)
5.7.2022

Following is the transcript of remarks by the Secretary for the Civil Service, Mrs Ingrid Yeung, at a media session on offers of 2022-23 civil service pay adjustment at Central Government Offices this afternoon (July 5): Reporter: The first question is to ask you how do you think that this current pay adjustment will be taken by the civil service? Will it affect their morale and, also just added on a little bit, will it also affect their trust in the mechanism to determine this pay rise as well? The next question is to ask about the mechanism itself. This period of salary adjustment has been subjected to a lot of controversy and a lot of debate, will the department consider adjusting or perhaps revamping the adjustment mechanism, and if so, how will you go about it? Could you again elaborate on the rationale behind this 2.5 per cent suggested increase? Because this is quite a steep drop from what was mentioned before in the pay trend survey from 7 per cent all the way down to only 2.5 per cent. Secretary for the Civil Service: The net Pay Trend Indicators (PTIs) have never been the sole consideration in civil service pay adjustment. It is only one of the six factors that we should take into account. For your first question whether staff morale will be affected, I hope civil service colleagues and do trust civil service colleagues will understand the rationale behind. As Hong Kong's economy is recovering, and Hong Kong is progressing on the recovery path, I'm sure our civil service colleagues, as both civil servants and as Hong Kong citizens will strive their best to help the recovery and to do their best to help Hong Kong to get back to normality. So I don't think civil service morale will be affected. And in fact, civil service morale and civil servants' contributions in the fifth wave, in the anti-epidemic work as well as in other areas have been greatly appreciated by the CE-in-Council (Chief Executive-in-Council) when making this decision. As for the mechanism, I think we have to differentiate between the mechanism and the pay trend survey methodology. As I said, the net Indicators which are the outcome of the pay trend survey is only one of the factors to be considered in the civil service pay adjustment exercise. The entire mechanism requires us to consider six factors in total, balancing six factors taking into account the current situation. So the methodology itself will be reviewed by the committee doing the pay trend survey every year before they start a fresh round of survey, so I'm sure the committee this year will look at the methodology again and see if there can be adjustments. But for the adjustment mechanism itself, we believe the six factors have provided us a very good basis for consideration. All the necessary factors that should be taken into account are present here in this basket of factors. So I think the mechanism itself has been serving us very well, and I do not believe that there should be any major changes to the mechanism. Reporter: Just to follow up on previous questions. Could you explain the rationale behind the standard pay adjustment for senior, middle and also junior civil servants? Because back in 2019, the percentage was higher for junior and middle civil servants. And the second question has to do about the 2.5 per cent increase. You said the civil servants would understand the rationale. Could we also ask about &hellip;? Because the CPI in the past two years was already 1.9 per cent combined, so it was 1.6 per cent in 2021 and 0.3 per cent in 2020, so how would you compare the percentage increase in the CPI or the inflation, and also the pay rise this time? Secretary for the Civil Service: Thank you for your question. For the rationale, as I explained just now, the net Pay Trend Indicators is one of the considerations we have taken into account, but we've also taken into account other considerations. This is a special year. Our economy is just recovering from the fifth wave of the epidemic. There have been improvements in recent months, but whether the local economic situation will continue to improve depends very much on whether the epidemic will be under control. There are also uncertainties in the bigger global scene. There are geopolitics considerations, tense international relations, inflation in other countries has also been high. So there are a lot of uncertainties there. Hong Kong being an open economy is bound to be affected by what's happening elsewhere in the world. This year, we are having a deficit budget. There will be a deficit as forecast by the Financial Secretary of more than $50 billion. So we believe this year when dealing with civil service pay adjustment, we should be more prudent and the 2.5 per cent increase across-the-board is a decision taken after balancing all the relevant factors. That is the rationale behind. As for the change in cost of living, the CPI (Consumer Price Index), every year when the CE-in-Council makes a decision on civil service pay adjustment, the CE-in-Council has taken into consideration all the factors relevant for that year. We do not carry the factor that was relevant for the past year into this year's consideration. So this year, we have taken into account the CPI increase in the 12 months from April 2021 to March 2022 over the previous 12 months, and the percentage increase is about 1.7 per cent. (Please also refer to the Chinese portion of the transcript.)