June 16, 2009 / 10:14 AM / in 8 years

HK leader cuts his $50,000 per month salary by 5.4 percent

HONG KONG (Reuters) - Hong Kong’s top government official, who earns close to $50,000 a month, will take a 5.4 percent pay cut along with other senior government officials to show support for fellow citizens during the recession.

Chief Executive Donald Tsang said on Tuesday he and his senior officers wanted to show they stood “shoulder to shoulder” with the people enduring difficult times.

The cut for the government’s top official is the equivalent of the average household income in Hong Kong, which has been hard hit during the global downturn because of its reliance on world trade.

The economy has been shrinking since the third quarter of 2008 and unemployment is its highest in nearly fours years. Companies have cut salaries, scrapped bonuses and asked employees to take unpaid leave to help deal with the downturn.

“Hong Kong’s economy has been badly hit by the financial crisis,” Tsang, who currently earns HK$370,000 ($47,436) a month, told reporters.

“We understand that everyone has been affected in one way or another: some suffered a pay cut, some had their bonus reduced, and some others even lost their jobs.”

The pay cuts take effect in July and tracks a proposed 5.4 percent pay cut for senior civil servants. Lower ranking bureaucrats will have their salaries frozen.

However, legislator Lee Cheuk-yan, who is chief secretary of the Confederation of Trade Unions, said the cut wasn’t big enough.

Tsang should follow his predecessor, Tung Chee-hwa, who took a 10 percent pay cut when the SARS virus pushed the territory into recession six years ago, he said.

“Donald Tsang is trying to present himself as sharing the hardship of the people of Hong Kong, but it is more an act of persuading senior civil servants to take a pay cut,” Lee told Reuters.

“He is being hypocritical. His pay cut should not be linked to civil servants’ pay cuts. He should take a 10 percent cut, that would be more of a show of sincerity.”

Top government officials are political appointees and not officially civil servants. Civil servants have criticized any proposed salary reductions, arguing that their pay increases in recent years have not kept pace with those in the private sector.

Tsang’s pay cut works out at HK$19,980 a month, slightly higher than average household income of HK18,100 per month in 2008. His total monthly salary would be enough to rent a four-bedroom house in the iconic Peak mountain, one of Hong Kong’s swankiest districts.

Reporting by Susan Fenton, Editing by Neil Fullick

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