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The Chief Executive in Council accepted on May 8 the recommendations of the Independent Commission on Remuneration for Members of the Executive Council and the Legislature, and Officials under the Political Appointment System of the Hong Kong Special Administrative Region (the Independent Commission) regarding the remuneration package for Politically-Appointed Officials (PAOs) serving in the fourth-term Hong Kong Special Administrative Region Government (HKSARG) and the modifications proposed by the Administration.
Adjustment to cash remuneration for Directors of
Bureaux (DoBs)
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"The Administration proposes that the cash remuneration for DoBs should be increased on the basis of the level approved by the Finance Committee of the Legislative Council (LegCo FC) by the same rate as the cumulative pay increase of civil servants in the upper salary band since the level took effect in October 2002, namely 8.1 per cent, i.e., from $298,115 to $322,260 per month.
"The Administration has carefully considered the recommendation of the Independent Commission before putting forth the above proposal. The Independent Commission has recommended that the cash remuneration for DoBs should be increased by the same rate as the cumulative increase in the Consumer Price Index (C) (CPI(C)) from 2002 to 2011, namely 15.3 per cent," a Government spokesman said.
The Administration notes that in making the recommendation, the Independent Commission has considered a basket of factors, including performance of Hong Kong's economy, changes in the CPI(C) and market pay practices for positions in the private sector with responsibilities comparable to PAOs over the past 10 years, etc.
"We appreciate that the recommendation of the Independent Commission aims to compensate for the erosion of the purchasing power of a DoB's cash remuneration for the last 10 years. Nevertheless, the Administration considers that it would be prudent to also take into account the change in civil service pay in the upper salary band during the same period because the public might consider, and not without reason, that PAOs and civil servants are both public servants in nature," the spokesman said.
The Administration notes that since the level of cash remuneration for DoBs was approved by the LegCo FC and took effect in October 2002, the salary of civil servants has been adjusted upwards and downwards several times, resulting in a cumulative increase of 8.1 per cent. On the other hand, with the voluntary reduction of salary accepted by the Chief Executive (CE) and PAOs in 2009, the cash remuneration for DoBs is currently 5.38 per cent below the level approved by the LegCo FC.
Having regard to the above, the Administration proposes that the cash remuneration for DoBs be increased by 8.1 per cent. This proposed rate of increase:
(a) can, to a certain extent, compensate for the erosion of purchasing power of DoB's cash remuneration for the last 10 years;
(b) is generally in line with the increase in the median total direct compensation for senior executives (at 8 per cent) as surveyed by the consultancy commissioned by the Independent Commission; and
(c) represents an annualised average increase of 0.78 per cent, which is a more moderate rate of increase.
"The Administration accepts the recommendations of the Independent Commission regarding the remuneration package for other PAOs," the spokesman said.
Differential in cash remuneration between DoBs and
Secretaries of Departments
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At present, the differential in cash remuneration between DoBs and the three Secretaries of Departments (i.e., the Chief Secretary for Administration (CS), the Financial Secretary (FS) and the Secretary for Justice (SJ)) is set at 3.5 per cent for each tier. The Independent Commission recommends that this differential should be maintained.
Cash remuneration for Under Secretaries
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The Independent Commission notes that the cash remuneration for Under Secretaries is currently set at 65 per cent to 75 per cent of that for DoBs.
"The Independent Commission acknowledges that a pay range provides some flexibility in recruiting different talents. Nevertheless, having regard to the fact that the Under Secretaries are supposed to perform similar levels of duties, the Independent Commission considers that there is a case for simplifying the system. Accordingly, the Independent Commission recommends that the pay range of Under Secretaries should be pegged to a single point, i.e., 70 per cent of DoBs' remuneration," the spokesman said.
Cash remuneration for Political Assistants
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The Independent Commission notes that the cash remuneration for Political Assistants is currently set at 35 per cent to 55 per cent of that for DoBs.
The Independent Commission notes that the job description designed for Political Assistants has limited them largely to internal activities or behind-the-scene lobbying, resulting in the public having very little knowledge about their work. The Independent Commission considers it reasonable to lower the remuneration for Political Assistants to 30 per cent of DoBs' remuneration (i.e., at about $100,000 per month or $1.2 million per annum should DoBs' pay be revised as proposed by the Independent Commission).
"The Independent Commission notes that the CE-elect has proposed that the PAOs serving in the fourth-term HKSARG would need to increase public engagement at the district level. The Independent Commission also notes that the fourth-term HKSARG may engage a number of Political Assistants (e.g., two or three Assistants) in each Bureau to provide support for the DoBs as well as to develop a pool of political talents. Accordingly, it is expected that Political Assistants serving in the fourth-term HKSARG will take up more public engagement and lobbying work at district level, assist in gauging views from the community on issues of concern, and take up more work in explaining government policies during consultations. Given that the types of talents for the level of Political Assistants could be rather diverse, the Independent Commission considers it difficult to recommend a single level of remuneration for all Political Assistants," the spokesman said.
In the light of the above, the Independent Commission recommends that the total cash remuneration for Political Assistant(s) engaged by each of the Secretaries of Departments, Deputy Secretaries of Departments, and DoBs (except the SJ and the Secretary for the Civil Service who are not underpinned by Political Assistants) should be capped at $1.2 million per annum (or capped at $100,000 per month). This should enable the relevant officials more flexibility to engage a wide range of talents with different experiences and backgrounds.
Adjustment mechanism for remuneration for PAOs
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The Independent Commission considers it necessary to put in place an objective and transparent adjustment mechanism to ensure that the remuneration for PAOs is adjusted from year to year in line with movements in the economy. In this regard, the Independent Commission recommends that the remuneration for PAOs should be adjusted annually in line with the movement of the CPI(C). This can maintain the real value of the pay set for PAOs. The remuneration for the Members of the Executive Council (ExCo) and LegCo are also adjusted according to this mechanism.
Cash remuneration for Deputy Secretaries of
Departments
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The Independent Commission was also invited by the Office of the CE-elect to advise on the remuneration package for the posts of Deputy Chief Secretary for Administration (DCS) and Deputy Financial Secretary (DFS) proposed to be created in the fourth-term HKSARG.
The Independent Commission has been advised that the main responsibilities for the DCS and the DFS are to assist the CS and the FS respectively in developing closer co-operation between the Hong Kong Special Administrative Region and the Mainland, co-ordinating policy formulation and implementation in specific policy areas, overseeing the work of a number of policy bureaux, and promoting Hong Kong's developments on different fronts. The Independent Commission also notes that the two posts should be pitched between Secretaries of Departments and DoBs and that the two posts should be of the same rank.
"Having regard to the above and on the assumption that the posts of the DCS and the DFS will be created with effect from the fourth-term HKSARG, the Independent Commission recommends that the cash remuneration for the DCS and the DFS should be pitched midway between that for the SJ and that for DoBs (i.e., 1.75 per cent above that for DoBs). It also recommends that the DCS and the DFS should be eligible for broadly the same benefits as those enjoyed by Secretaries of Departments, except that they would not be given official residences and non-accountable entertainment allowances," the spokesman said.
The Independent Commission is chaired by Mr Vincent Cheng, with Mr Nicky Lo, Mr Chow Chung-kong, Mrs Betty Yuen, Professor Chan Yuk-shee and Ms Kelly Chan as other members. It provides advice to the Administration, among others, on the remuneration package for PAOs. The Independent Commission has completed the review.
A copy of the Independent Commission's report is in the Annex for reference.
Ends/Monday, May 14, 2012
Issued at HKT 22:02
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