6 March 1999

Civil service reform requires Boldness and Cautiousness

(keywords:- Budget, civil servants, corporatisation, Hospital Authority, public accountability, tobacco)

          Amidst economic downturn, the Budget for 1999-2000 has won a round of approval, if not applause, amongst major political parties.

          Much credit has given to the Financial Secretary on the distinct sense of boldness and innovation -- a breath of fresh air quite different from the usual civil service culture of "bureaucracy". To wit, there are suggestions on merging the two exchanges and their associated clearing house; constructing a cyberport and a theme park; and conducting civil service reform.

          With some of these innovatives bordering on major policy change, some even claim the Budget as a mid-term Policy Address. But if it is for the better, so be it.

          Amongst these, the attempt to move our decades-old civil service structure, if successful, would entail great impact on the governance of Hong Kong.

          Civil service reform is not simply a matter of review of emolument and benefits, but much depends on culture alteration and change in service mode. The idea of fully corporatising suitable government services, as stated in the Budget speech, could well be the way forward.

          Yes, proper corporatisation provides greater flexibility in hiring and firing. It could also put in place an appraisal system for effective determining performance pay. Yet, proper balance of efficiency and public accountability must be given prior consideration.

          The Government is well advised to take stock of the experience of the Hospital Authority (HA) -- a corporatised quasi-governmental body. Eight years down the line of its establishment, although much improvement has been brought to the service, at the same time, HA is also being seen as problem-plagued by the public.

          The reasons? There is the inherent fault of Government's "shedding responsibility" attitude, hence leading to lack of nurturing, monitoring and direction from the Administration.

          More, whilst the HA Board by statue is to manage public hospital services, many Board Members regard it as an advisory body with little accountability let alone ownership of the activities nor the mishaps of the organisation. Is it due to a lack of clear directive from the Government?

          Worst, holding the life-line of setting policy, our Government lack the expertise to oversee, let alone guide the HA, which is already outside civil service regime.

          The Budget speech cited water supply as a suitable candidate for privatisation. Yes many cities round the world allow private sector participate in water supply and claim success. Yet, we need safe, clean and affordable water -- an essential element for all -- which utmost monitoring with maximum accountability is important. This the Government cannot shed its responsibility. Nor should we allow any private organisation to hold Hong Kong to ransom on a monopoly of an essential service.

          Before making any decision on corporatisation or privatisation of public assets, public interest and public accountability from all aspects must not be taken slightly.

          It is also a right step to review the civil service salaries and conditions so as to ensure against over out-stepping those of the private sector. Yet the Administration must come out in no abstract terms whether changes, if any, will be for new recruits only or be extended also to the incumbents. Full consideration must be given to the possible impact on the morale of our 189,000 civil servants and 140,000 subvented staff; as well as the contractual obligation the Government has on existing staff.

          Amidst the glitters in the Budget, the reluctance to increase tobacco duty is unforgivable and the reasons submitted unpalatable. The Financial Secretary argued that increasing tobacco duty will only provide further impetus to smuggling and illegal sale, thus contributing little to revenue and to furthering on anti-smoking policy. In short, the Administration is bowing to the pressure of illegal activities.

          If the law prohibits smuggling of cigarettes and their illegal sales, the proper way is to strengthen law enforcement; not to compete with illegal sales through cheaper legal transactions. Government commitment to anti-smoking is thus put in doubt!

(Hongkong Standard)