|Reform of Hong Kong Government
Mr Danny Gittings, Associate Editor & Columnist of South China
Morning Post Publishers Ltd, was the Foundation's guest speaker on 26 March 1999. This is
a summary of his remarks.
Now reform of the Hong Kong government is a huge issue, if we had time we could
certainly spend weeks talking about all its myriad aspects, from the changes at the lower
tiers, where most people seem to think the government will get its way in abolishing the
Urban and Regional Councils later this year, to the upper echelons, and whether the
present system of drawing policy secretaries almost exclusively from the civil service has
become outdated and should be replaced by a ministerial system. But obviously the most
topical issue, the one that is in the news at the moment, is reform of the civil service,
especially after the government's publication of what purports to be very radical plans
for reform a few weeks ago, and so that's the area which I want to focus on today.
Now this has been portrayed as a revolution: as a really radical initiative. We've been
told how the iron rice bowl is going to be cracked. How civil servants will have to shape
up or lose their jobs. And how, in future, we're going to see two thirds of the civil
service on contract instead of permanent and pensionable terms. But if this is really
meant to be a revolution then there's something very strange about it, there's something
missing, and that's where is the resistance. After all you can't have a revolution without
resistance and, in this case, when you're taking on such powerful entrenched interests,
you'd have thought the civil servants, and especially their unions, would be kicking and
screaming in protest.
Instead what do you get? You get even the staff representatives queuing up to explain
how, while they may have a few reservations, they generally accept the reform package.
That they're not even too unhappy about having their pay frozen this year. And, from my
perspective, when I speak to senior government officials these days, have lunch with
policy secretaries, they're all falling over themselves to tell me how much they support
these reforms. Even those that are normally quite frank in private, and prepared to
criticise other government policies, won't say a word of criticism when it comes to this
one. In fact it's quite the reverse, they're all falling over each other to tell me how
many of these reforms were originally their idea, and that they were the first to propose
them many years ago and that if they had their way they'd go even further in reforming the
Now it could be that they're all saying that because that's what they really believe.
And, of course, some in the civil service have expressed stronger reservations about these
reforms. You all know about how the disciplined services seem to think they should be
exempt from the requirement to employ fewer people on pensionable terms and more on fixed
term contracts. And you may not have heard, but at a private meeting, when senior civil
servants were briefed on the reforms, the Secretary for Health and Welfare, Katherine Fok,
also expressed some reservations about rushing head-long towards having most people on
But that really illustrates my point because Mrs Fok has no ambitions to rise higher in
the civil service and is probably going to retire in the next year or so. So she has
nothing to lose by expressing doubts about the reforms. However the other top civil
servants all know that civil service reform is something Tung Chee-hwa is really keen on
at the moment. And, as I'm sure you all know, when your boss is really keen on something,
especially a boss like Tung, who doesn't really want to listen to dissenting opinions once
he's made up his mind, it's better to insist you're just as enthusiastic about it as your
boss, whatever your real feelings on the issue.
Then of course, there's the fact that perhaps the civil service don't feel they need to
put up too much resistance, because it's not as if some outsiders are being brought in to
implement them. They're the ones who are going to be in charge of implementing them and,
so they're the ones who'll be able to control the pace at which any changes are
implemented and rather than vigorously protesting against these reforms at the moment it's
better to wait until attention has moved away to other issues, and most importantly of all
until the boss is focused on something else, and then it'll be much easier to start
slowing down these reforms and perhaps even scrapping some of them.
And you don't need to look very far for signs that this might happen. As I said, it's
politically wise for all civil servants, apart from those who are about to retire, to
publicly protest their support for the reforms at the moment. But that doesn't stop them
from quietly laying down some subtle markers that can be used when that heat is off the
issue later on and it comes to time to slow the process down. So, for instance, if you
look at the recent Budget. The way it was portrayed was as helping to push forward the
reform process, with the freeze on civil service salaries and privatisation of the MTRC
and talk of privatising some other government services.
But if you look more carefully, you'll see there were quite a few caveats that didn't
receive much attention at the time. For instance, on moving away from permanent and
pensionable terms to having most civil servants on fixed-term contracts, Donald Tsang
didn't say it was wrong. He could hardly do that when his boss is so keen on it. What he
did instead was he talked about P&P terms as a "distinguishing feature of civil
service employment" and said that before any changes were actually introduced they'd
have to "think carefully"" about what impact it would have on civil service
"morale and stability".
Then, on performance-related pay, which is another change which has been put forward
and which I think we all agree should be introduced, if a way can be found of objectively
measuring civil servants' performance. Here, of course, the civil servants' line of
resistance is very easy. They just argue that they support performance-related pay in
principle, it's just that there's no practical way of implementing it when it comes to the
civil service, since much of the work the civil service does can't be readily quantified.
Here again, if we look at the Budget, we see Donald Tsang laying down a marker for the
future, saying that while he supports performance-related pay in principle, in
implementing it "we mustn't lose sight of the unique job nature of much of the civil
My guess is that there'll be a few pilot schemes in a couple of government departments,
perhaps it'll even be introduced in a couple of professional ranks within the civil
service, where job performance is much easier to quantify, maybe there'll even be some
minor bonus for exceptional performance by other civil servants. But, apart from that, the
idea of performance-related pay will be quietly killed off after a decent interval. And on
the move away from pensionable terms towards fixed-term contracts we've already seen some
back-tracking, with Lam Woon-kwong, the Secretary for the Civil Service, suggesting that
the disciplined services may be exempted from the requirement to move towards fixed-term
contracts, even though that's how the ICAC has long operated without any apparent
My guess is that over time we'll find more and more such exceptions being made, so that
while the reform continues in principle, in practice it'll never cover the present target
of two-thirds of the civil service. Of course that figure of two-thirds was only ever a
reference to new recruits, since the government can't change the terms of existing
employees, so even if they proceeded full-speed ahead with this reform (and didn't start
making all these exceptions) it would be several decades before we reached the point where
two-thirds of civil servants were on contracts.
Then there is another reform that Mr Tung announced which is already being watered
down. His idea that civil servants should have to compete against outsiders for promotion
to higher grades already seems to have faded away. Even in the government consultation
paper it was put forward in only the most tentative terms, with lots of qualifying
phrases, such as only where "necessary or desirable" and since then it seems to
have been largely forgotten about. Of course the civil service hates allowing outsiders to
fill posts which they think should belong to them. They were forced to do so over the
Commissioner for Tourism post, which is now in the process of being filled, and has
attracted over 70 applicants. But they hate it. And tend to make life difficult for
outsiders who do mange to make it into their ranks.
Then I don't think you can underestimate the impact of what appears to be a change of
heart by Mr Tung in asking Anson Chan to stay on for such a longer period. Anson Chan has
said very little about civil service reform so far, and what she has said has tended to be
much more cautious. Indeed as soon as her extension in office was announced this week, she
told reporters that, while of course she would be helping push through civil service
reforms, it was important that they be gradual and cautious.
I've no doubt that Lam Woon-kwong, the Secretary for the Civil Service, who has been
spearheading these reforms is sincere about them and about implementing them. But you have
to remember that he has a track record in government of fighting losing battles.
We shouldn't mistake the lack of public resistance for acquiescence in these changes.
The civil service has been very clever. If you want to stall reform, it's far better to
pretend to embrace it and then start sabotaging it from within, rather than to openly
Furthermore, if you look at what the government is doing, in many respects it's very
superficial and seems to be directed more at giving the impression of what the public
perceive to be the main problem of the moment rather than at fundamental root and branch
reform. So, for instance, the public thinks civil servants are overpaid, especially after
the slide in salaries in the private sector during the recession, so the government
freezes salaries for a year to show it's doing something to address this concern. And the
public thinks civil servants are performing poorly, especially after the bird flu crisis
and the fiasco over the opening of the new airport last year. So the government announces
that it will look at introducing performance-related pay although, as I said earlier, I'm
very sceptical as to whether this will end up being introduced to any great extent.
But these are all piecemeal solutions directed at specific problems, and specifically
at the issue of civil service terms and conditions, because that's what is in the public
eye at the moment. But what is missing is some more fundamental, root and branch reform of
the government, that's not just about the terms under which civil servants are employed
but rather about overhauling the whole structure of government.
If we look overseas, in Britain, for instance, they've gone a lot further and a lot of
services that used to be provided by government are now no longer run by government. I'm
not so much talking about privatisation of water supplies and gas and electricity and the
railways, but more about the provisions of basic services, like the government's printers
or even its distribution of social welfare payments and pensions. All these are now either
in the private sector or run by bodies called Next Step agencies which are run on
commercial principles and operational independent of government.
Yet, in Hong Kong, what have we got. We've got the Mass Transit Railway being
privatised, clearly to help plug a hole in the budget deficit, rather than as part of any
grand design for reform of the government. We've got these curious bodies called trading
funds, which have existed in a few government departments for several years now, where
they're supposed to be run on commercial principles. Yet even in the Electrical and
Mechanical Services Department, which was one of the first to have a trading fund, they
still operate as if they were civil servants rather than a commercial body. They cost far
more than electricians in the private sector, and for the moment government departments
are still forced to use them, however bad and expensive they are. I've heard some civil
servants complaining very loudly about this, although apparently that is going to change
fairly soon and government departments will be able to bypass them and go and use the
private sector instead if they're not happy with them.
Nonetheless this sort of track record means. I'm afraid I can't put much faith in the
other reform measures that have also been announced, such as looking at privatising the
Water Supplies Department and perhaps even the Housing Authority. Whatever happens is
going to happen slowly and half-heartedly.
I'm afraid the lesson from all this is that you really can't trust civil servants to
reform themselves. You have to bring in outsiders if you want to get the task done. And I
don't think Mr Tung recognises that. Or if he does he sees it as far too radical. And
until he recognises that it's the only solution then I don't think we should get too
excited by all these reforms that are being proposed at present.
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