Civil service job cuts and HK$2 transport fare revamp ‘insignificant,’ legislature’s research office says
Hong Kong Free Press
Hong Kong government’s proposals to downsize the civil service and revamp the HK$2 elderly transport fare scheme are likely to result in “insignificant” cost savings, the research office of the city’s legislature has said.
The two proposals were among a raft of measures unveiled last month during Financial Secretary Paul Chan’s annual budget speech in a bid to cut government spending. Hong Kong has logged a fiscal deficit for three years in a row. Chan said the government is aiming to reduce recurrent expenditure by seven per cent through 2027-28.
He announced that 10,000 posts would be cut across the civil service by 2027 and said that the HK$2 transport subsidy scheme for residents aged above 60 would be capped.
In a note published on Thursday, the Legislative Council (LegCo)’s research office said that the two measures would appear to have limited effect on cost savings.
“The budget initiative to cut the civil service posts by 10,000 in two years seems to have [an] insignificant effect on manpower savings, given the large gap of 18,900 between establishment and actual workforce,” the office said, adding that vacancy rate in the civil service had reached 10 per cent.
As of the end of 2024, Hong Kong’s civil service was about 174,000-strong, falling short of the 193,000-odd posts across the entire civil service establishment, according to official figures.
The office said that the number of posts available in the civil service establishment had persistently exceeded the number of actual working civil servants by at least 10,000 for six straight years since 2019.
“Most of the 10,000 posts [the announced job cut] would not have been filled anyway, with or without the post deletion policy,” the office added.
Chan also announced a pay freeze across all branches of the government in this fiscal year, including the entire civil service, the legislature, and the judiciary.
HK$2 scheme
Regarding the HK$2 scheme revamp, the office said that the estimated savings of HK$680 million per year were considered “too modest” by some observers and that the feedback from society was “rather mixed.”
In his budget speech, Chan said a cap of 240 trips per month will be imposed on the HK$2 scheme while the age eligibility threshold will remain at 60 years old, which Chan said would minimise “the impact to the beneficiaries.”
The office said that half of residents aged 60 to 64 were still working last year and that they took up almost 60 per cent of the subsidy available under the HK$2 scheme.
“[T]he need for [a] transport subsidy for working persons aged 60-64 is not as apparent as the elderly who are mostly economically inactive,” the office said, citing opinions published by local media outlets.
The office conducted a study of similar public transport subsidy schemes in 12 other cities and found that only four of them offer concessionary fares to residents aged 60 to 64 like Hong Kong. The four cities include London, Paris, Guangzhou and Singapore, according to the office.
Others like New York, Seoul, Tokyo, Taipei, and Shanghai, while having subsidies for elderly people aged above 65, offer no such schemes for people aged 60 to 64, “conceivably because a majority of them are still young enough for working,” the office said.
“Broadly speaking, the fine-tuned proposal of [the] $2 Scheme in Hong Kong apparently fares well in terms of generosity…, particularly so for persons aged 60-64,” the office added.
LegCo will resume the second reading debate of Chan’s latest budget on April 16.
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