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Following is a question by the Hon Abraham Shek and an written reply by the Secretary for the Civil Service, Mr Joseph W P Wong, in the Legislative Council today (April 2):

Question:

Depending on their rank, length of service, terms of appointment and other requirements in the Civil Service Regulations, civil servants enjoy a number of fringe benefits, including medical and dental care, education allowances, housing, leave passage and pensions. To tackle the fiscal deficit, the Government has committed itself to reducing the operating expenditure and set an expenditure savings target of HK$20 billion to be achieved by the 2006-07 financial year. In this connection, will the Government inform this Council :

(a) whether the Administration plans to introduce measures to further encourage civil servants to purchase their own flats in the private property market in order to reduce its spending on housing benefits;

(b) of the rationale for providing leave passage for the spouse and dependent children of a directorate civil servant who joined the Government before June 1, 2000; and

(c) in view of the above expenditure savings target, whether the Administration plans to conduct a comprehensive review of the current fringe benefits package for civil servants; if it has, of the details of the plans?

Reply:

Madam President,

(a) It has been our policy objective to replace the provision of civil service housing benefits in kind with the payment of housing benefits allowances with a view to containing the Government's expenditure on such benefits. In line with this policy objective and to encourage home ownership, we introduced the Home Financing Scheme in 1990 to replace the non-time-limited Private Tenancy Allowance and Non-departmental Quarters for civil servants offered appointment on and after October 1, 1990. Civil servants offered appointment before October 1, 1990 are given an option to join the Home Financing Scheme by relinquishing their eligibility for other housing benefits including Private Tenancy Allowance and Non-departmental Quarters subject to meeting the eligibility, terms and conditions of the Home Financing Scheme. In June 2000, we introduced the Non-accountable Cash Allowance Scheme for eligible new recruits in place of the Home Financing Scheme and other housing allowance schemes. The new scheme allows the claimant flexibility to use the allowance for home purchase, rental payment or other purposes.

(b) The provision of leave passage for the spouse and dependent children of eligible officers as fringe benefits started some years ago for overseas terms officers to enable them to maintain home ties. With the approval of the Finance Committee in 1981, the provision, which was in line with the practice in the private sector then, has since been extended to directorate officers on local terms. This provision has ceased for officers offered appointment on or after June 1, 2000, following a review of the employment package for new recruits.

(c) It is stated Government policy to keep our civil service management system under review and to make improvements from time to time to ensure that the continued provision of the allowances is justified and is in line with present day circumstances. Given the Administration's commitment to achieving significant economy in Government's operating expenditure in the next few years, we have recently undertaken to carry out a comprehensive review of civil service allowances, including allowances payable as fringe benefits. The purpose of the review is to examine all possible options of reducing expenditure, having regard to legal and other considerations. Our objective is to achieve substantive savings in Government expenditure on civil service allowances in the next few years. We are now considering the priorities and the time frame of the review. We will report to the Legislative Council on our specific proposals and on subsequent progress of the review in due course. We will consult civil servants fully in the review process, and adopt the principle of lawfulness, reasonableness and fairness in taking forward the matter.

End/Wednesday, April 2, 2003

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