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     The Chief Executive in Council has accepted 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 serving in the fourth-term Hong Kong Special Administrative Region Government and the modifications proposed by the Administration. Following is a transcript of the remarks (English portion) made by the Secretary for Constitutional and Mainland Affairs, Mr Raymond Tam, at a media session on the subject at the Central Government Offices today (May 14):

Secretary for Constitutional and Mainland Affairs: The Chief Executive in Council has accepted the recommendations of the Independent Commission regarding the remuneration package for Politically-Appointed Officials (PAOs) serving in the fourth-term HKSAR Government and the modifications proposed by the Administration.

     The cash remuneration for Directors of Bureaux was endorsed by the Legislative Council (LegCo) Finance Committee in 2002. There has been no adjustment in the past 10 years.

     The Independent Commission has submitted a report to the Administration recently, recommending that the cash remuneration for Directors of Bureaux should be increased by 15.3% in accordance with the cumulative increase in the Consumer Price Index (C) (CPI(C)) from 2002 to 2011.

     We appreciate that the recommendation of the Independent Commission aims to compensate for the erosion of the purchasing power of the cash remuneration for Directors of Bureaux for the last 10 years.

     However, since the public might consider, and not without reason, that the PAOs and civil servants are both public servants in nature, the Administration considers it prudent to also take into account the changes in civil service pay in the upper salary band. Since October 2002, the salary of civil servants has been adjusted upwards and downwards several times resulting in a cumulative increase of 8.1%. At the same time, the median of the total direct compensation for senior executives has increased by 8% according to a survey by the consultancy commissioned by the Independent Commission.

     Taking into account these two indicators, the Administration proposes that the cash remuneration for Directors of Bureaux be increased by 8.1% on the basis of the level approved by the LegCo Finance Committee in 2002. This proposed rate of increase represents an annualised average increase of 0.78%, which is a more moderate rate of increase.

     The Independent Commission recommends that the differential in cash remuneration between Directors of Bureaux and the three Secretaries of Departments, (i.e., the Chief Secretary for Administration, the Financial Secretary, and the Secretary for Justice) be maintained at the current rate of 3.5% for each tier.

     As regards the posts of Deputy Chief Secretary for Administration and Deputy Financial Secretary proposed to be created in the fourth-term HKSAR Government, the Independent Commission recommends that the cash remuneration be pitched midway between that for the SJ and that for Directors of Bureaux, i.e. 1.75% above that for Directors of Bureaux.

     For the cash remuneration for Under Secretaries, the Independent Commission recommends that the pay be pegged to a single point at 70% of that for Directors of Bureaux instead of the current pay range of 65% to 75%.

     The cash remuneration for Political Assistants is currently set at 35% to 55% of that for Directors of Bureaux. The Independent Commission considers it reasonable to lower the remuneration for Political Assistants to about 30% of the remuneration for Directors of Bureaux, which is about $100,000 per month or $1.2 million per annum. The Independent Commission notes that the Chief Executive-elect has proposed that the PAOs serving in the fourth-term HKSAR Government would need to increase public engagement at the district level, and that a number of Political Assistants may be engaged in each bureau to provide support for the Directors of Bureaux as well as to develop a pool of political talents.

     Given that the types of talents for the level of Political Assistants could come from different backgrounds, the Independent Commission considers it difficult to recommend a single level of remuneration for all Political Assistants. As such, 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 Directors of Bureaux should be capped at $1.2 million per annum or $100,000 per month. This should enable the relevant officials more flexibility to engage a wide range of talents with different experiences and backgrounds.

     The Independent Commission considers it necessary to put in place an objective and transparent adjustment mechanism to ensure that the remuneration for the 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 the PAOs should be adjusted annually in line with the movement of CPI(C). The remuneration for the Members of the Executive Council and the LegCo are also adjusted according to this mechanism.

     On the basis of the existing structure of the PAOs, the above changes would bring about an overall saving of about $5 million per annum. Our plan is to brief Members on the proposals at the meeting of the LegCo Panel on Constitutional Affairs next week and listen to their views. We aim to seek approval from the LegCo Finance Committee for the proposals in June.

Reporter: Will you foresee a public outcry when you are asking for a huge increase for your salary when the people in Hong Kong are not really happy with your work? And the second question is why did the report not touch on the effectiveness of the accountability system?

Secretary for Constitutional and Mainland Affairs: I hope by the use of the words "your performance", you are not referring to me. But of course, as I have explained, the figures would eventually speak for themselves. We are not asking for a huge increase. We are asking for an adjustment which is 8.1% above that approved by the LegCo 10 years ago, and during the 10 years period there had been no adjustment at all. If we take an arithmetical approach, the annualised increase would be 0.78% only. Therefore, we regard this as a moderate increase. But of course, it is not for us to say or to judge. We only present the Independent Commission's report and we have already exercised self-restrain in trimming down the proposed increase from 15.3% to 8.1%. It is now up to the LegCo to approve our proposal.

     But we are not only proposing an increase, we are actually proposing a substantial reduction in the salaries of Political Assistants, and we are also proposing a rationalisation of the salary for Deputy Directors of Bureaux, i.e. the Under Secretaries. As of now, we have about half of our Under Secretaries receiving 75% of the Secretaries' salary, and another half 70%. We are now rationalising what we are doing now and therefore resulting in the total package as of now, before the reorganisation I should emphasise, a saving of some $5 million. We hope that by looking at our total package, the Members of the LegCo and the general public can see in this light - that is that we are proposing a proposal that can actually result in a total saving of $5 million. We are not proposing any huge increase, as if you mentioned, if you see in the context of having no adjustment in 10 years.

Reporter: Secretary, will you withdraw the controversial bill that restricts legislators from joining by-elections, so that other bills can be discussed in the LegCo?

Secretary for Constitutional and Mainland Affairs: I think this question should be posed to the two LegCo Members who proposed 1,300, in my view not so useful, Committee Stage Amendments. It is for them to withdraw the proposal, not for the Government to contemplate or to think about withdrawing a bill which has received actually majority support in the society, which has got a legal opinion that it is constitutional, and which actually has passed second reading in the LegCo. I think procrastination is not an issue created by the Government. It is by the two Members and it is for them to decide what is in the public interest – whether, after projecting quite vividly and strongly their political view on the bill, they should now come to the point that the Council would have to operate, and the Council has to make a decision on the bill one way or the other. If the Council, on the whole, according to its Rules of Procedures, finally decides that the bill should be rejected, we would be more than glad to follow the Rules of Procedures. But of course we would be very disappointed for that to happen. But as for now, there is certainly no ground for us to withdraw the bill, and for any reasonable man on the street, I don't think there is any strong reason for us to do so as well.

(Please also refer to the Chinese portion of the transcript.)

Ends/Monday, May 14, 2012