I am writing to update you on the review of fringe benefit type of civil service allowances and to invite your views on the latest package of change proposals.
We have been taking proactive steps over the years to modernise the provision of fringe benefit type of allowances to civil servants. As a result, new entrants joining the service after a specified date are no longer eligible for certain fringe benefit type of allowances. Other allowances have also been reduced in scope or rate for new recruits. Generally speaking, the package of fringe benefits available to officers offered appointment on or after 1 June 2000 has been substantially trimmed down in step with present day circumstances.
On 3 June 2004, we issued a consultation note setting out the change proposals under phase one of the review concerning certain passage and related allowances as well as housing-related allowances and benefits for staff consultation. The consultation period ended on 14 August 2004, during which we received 412 written submissions. It was our intention to release the revised phase one change proposals as well as those change proposals under phase two of the review for staff consultation before the end of 2004. The allowance review was subsequently put in abeyance in view of the Government's appeal to the Court of Final Appeal (CFA) in relation to the pay adjustment ordinances, which involved the Basic Law provisions regarding remuneration of civil servants. The appeal has now been concluded.
Taking account of the CFA judgment on the pay adjustment ordinances case, the staff feedback received during the phase one consultation and the policy objectives of the review, we have further revised the entire package of change proposals arising from the review for a further round of staff consultation.
In considering whether an allowance should be removed, retained or adjusted, we follow the principles of lawfulness, reasonableness and fairness. Examples of some notable proposals are set out below.
As regards education allowances which have ceased for new recruits since 1996 (in respect of Overseas Education Allowance) and since 2000 (in respect of Local Education Allowance), we propose to continue to freeze the rates for existing claimants while reducing the rates to the 1997 level for children of eligible officers who start to claim the allowance from a future date.
As regards passage and related allowances, we propose to keep most of the allowances intact and improve the administration of certain allowances where appropriate. For Sea Passage which has ceased for new recruits since 1984, we believe there is a case to retain it for the existing 177 eligible officers, but capping the rate at the 1997 level.
Over the years, we have regularly reviewed the housing and related allowances. For example, we have introduced the Non-accountable Cash Allowance Scheme to replace all other kinds of housing allowances for new recruits offered appointment since June 2000. In the current review, we propose to streamline/rationalise the rate adjustment mechanism of Accommodation Allowance, Private Tenancy Allowance, Non-accountable Cash Allowance, the Removal Allowance and the provision of hotel accommodation while keeping the other housing allowances intact. We also propose to abolish three housing-related allowances. They are the Air-conditioning Allowance which has ceased for those promoted to the directorate level on or after 1 May 1999 and which is of minor monetary value to the existing claimants of directorate officers; the Furniture and Domestic Appliances Allowances and the Hotel Subsistence Allowance, which have ceased for new recruits since May 1999.
We believe the latest package of change proposals has largely addressed the main concerns advanced by staff, while achieving the broad objectives of the allowance review. Where appropriate, we have taken on board the suggestions of the staff sides. A note setting out these changes proposals has been uploaded onto the CSB homepage (http://www.csb.gov.hk) for staff's information.
After staff consultation, we shall draw up the Administration's final proposals and seek the advice of the advisory bodies on civil service salaries and conditions of service before making a final decision. It is our intention to implement the new measures arising from the review as early as possible in 2006.
We have written to the staff sides of the central consultative councils seeking their views on the revised package of proposals. You are invited to submit your views in writing to CSB direct or through the staff sides of the central consultative councils by 21 November 2005.
I look forward to your continued support and understanding as we take forward this important exercise.
Yours Sincerely,
