Civil servant pay cut to reduce Hong Kong deficit ‘counterproductive’: experts

Lawmaker and academic warn against cutting wages, suggest delaying minor infrastructure projects instead

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Civil servants outside Hong Kong government headquarters in Admiralty. Photo: Sun Yeung

Published: 2:10pm, 6 Jan 2025Updated: 7:22pm, 6 Jan 2025

Cutting the salaries of Hong Kong civil servants in a bid to stem the government’s deficit could be counterproductive, a lawmaker and an academic have warned, urging authorities to consider delaying minor infrastructure projects instead.

Terence Chong Tai-leung, executive director of the Lau Chor Tak Institute of Global Economics and Finance at the Chinese University of Hong Kong, also said on Monday authorities could earn about HK$100 billion (US$12.86 billion) from stamp duty on stock transactions and the sale of some government-related assets.

The government could, for example, sell part of its stake in the MTR Corporation, the city’s rail operator, yielding billions of dollars, he said.

“Salary cuts bring forth many side effects. It’s not that they cannot make the cuts as the largest employer of Hong Kong, but when the market economy is still seeing salary increases, a salary cut from the government would be different from 1997, when the overall economy was handing out pay cuts,” Chong warned.

Lawmaker Andrew Lam Siu-lo echoed Chong’s views, saying cutting the wages of ministers and lawmakers would merely be “symbolic” and would not shave off much from public expenditure.

Lam and Chong were speaking after Financial Secretary Paul Chan Mo-po wrote in his weekly blog on Sunday that the administration would prioritise public work projects and maintain sustainable public finances as the estimated deficit for the current financial year was expected to reach just below HK$100 billion.

The estimate was more than double the HK$48.1 billion projected in last February’s budget.