Improving efficiency has become a critical priority for governments worldwide, especially given rising financial pressures. In the United States, gross federal debt had surged to US$35.5 trillion by the end of last year, and servicing it accounts for 16 per cent of federal spending.
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In response, the new Trump administration established the controversial Department of Government Efficiency (Doge) to reduce public spending. However, its lack of independent oversight and the concentration of power have ignited an intense debate over transparency and fairness. The fact that Doge’s “big bang” approach has alienated stakeholders also underscores the importance of fostering collaboration and a gradual implementation to ensure sustainable reform.
Hong Kong faces its own growing fiscal challenges. The freeze on civil service pay has reignited the discussion about public-sector compensation, an issue that dates back to the 1997 Asian financial crisis.
In response to pressure from the business community, the government initiated a review of the development of the civil service pay policy and system in Hong Kong. The resulting 2002 interim report and phase-one final report, to which I contributed, identified deep-rooted issues in the public-sector pay system and proposed a road map for reform.
Hong Kong’s civil service pay structure, modelled after the British system, was established to provide guaranteed security for low-paying public-sector jobs and attract talent. This formula-driven pay scale functioned during the city’s economic boom from the 1970s to the 1990s, a period when affordability was not a concern.
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But, by the early 2000s, its relevance had diminished. In 2001, then-secretary for the civil service Joseph Wong Wing-ping noted a growing misalignment between civil service pay and private-sector benchmarks, and the outdated and inflexible nature of the adjustment mechanism, which no longer satisfied the demands of a modern and competitive economy.