September 20, 2004

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It is a truth universally acknowledged that public servants work differently to you and me. I had the pleasure of spending an hour and a half waiting in a small room with 25 others in the Australian consulate for the pleasure of paying an outrageous sum of money to ensure my new son is able to claim his Australian citizenship and thus passport at further ludricous expense. The visa section is only open from 9am-12 noon; having finished my appointment at 11:45am I looked at the room full of hopefuls clutching their pink numbered slips and fully expected a riot to begin once the hour of 12 was reached. That's the reason the (only) official sits behind bullet-proof class - a room full of angry Cantonese and Australians is not a pretty sight.

This seuges nicely with Jake Van Der Kamp's column in today's SCMP. Jake is one of the few reasons to actually spend hard earned cash on the paper and today's column looks at that age-old topic of HK public servants' and their salaries. Historically this group had high wages and great perks as it was considered a "hardship" posting for the boys from Whitehall. Once the localisation of the public service began tey quickly enshrined into law conditions forbidding a drop in standards. This has lead to the absurd situation where HK's public servants earn measurably more than their private sector equivalents. From the article:

At the beginning of last year the General Chamber of Commerce commissioned a comprehensive civil service pay survey from Watson Wyatt Worldwide.

The survey covered 69,000 government employees in 76 civil service job families excluding disciplined services, teachers and occupations unique to government. It then compared these to the closest equivalent private-sector jobs.

The results showed such a huge gap that the chamber decided to soft-pedal the findings. The chamber likes to maintain warm relations with civil servants but there was a danger here of the sudden appearance of icicles. It therefore highlighted only a single skewed finding that showed a 17 per cent excess in civil service pay...

The P50 and P75 refer to levels of pay within job categories. P50 assumes that you compare the mid-range of pay within any government job category to the mid-range of pay within the equivalent private-sector category. P75 assumes that you measure the mid-range for government against the top quartile of the private sector...the chamber chose the P75 comparison for its figure of a 17 per cent excess in government pay. It said: "We recognise that the average civil servant should be compared with the better performers in the total workforce."

can think of several reasons why it should be the other way round. Let us not quibble, however. We shall simply take the P50 measure instead of the P75 and we now have civil service pay at a 34 per cent excess over the private sector.

And now for the real figure. We shall make it a like-for-like comparison, P50 instead of P75, and on the basis of total remuneration - salary, cash allowances, housing, medical, educational, home travel, annual leave, retirement and all other benefits for both government and private sector.

We now have civil servants paid 229 per cent more than private-sector employees. Take special note that this is 229 per cent more than, not of, private sector pay. At maximum pay levels the discrepancy is even greater, 264 per cent.

There's more, and it's worth investing HK$7 to buy the paper and read the whole thing. There are two interesting things here. Firstly the power of the public service is such that the survey stats were skewed into the most favourable light possible and still showed public servants earned 17% more than private sector jobs. A more accurate figure, covering total compensation, shows public servants earning more than 2.5 times more than private sector workers. Hong Kong might have a low tax rate, but it supports a bloated and mightly overpaid civil service. If HK's people were more widely aware of these numbers I'd imagine the pressure to cut them would be unbearable. But in the best traditions of Yes, Minister, the public service are astute and adept at avoiding truth. That's what they're paid for, after all. Secondly Jake's conclusion is telling. He graphs the growth in HK's GDP vs the growth in public servants' compensation. The gap is yawning after 1997. While many like to bleat about overpaid CEOs and corporate types, at least in Hong Kong there's a far better case against the poorly performing public servants and their exorbitant compensation.

In my next life I could do plenty worse than coming back as a Hong Kong public servant.

posted by Simon on 09.20.04 at 01:35 PM in the




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