If there's one resounding message from the recent World Economic Forum, it's that all the economies are being globalized. Investors will move with ease from one region to another, one country to another, and one city to another, to maximize their profits. China joining the WTO next year will speed up this movement - movement into or out of Hong Kong.

Hong Kong is becoming less attractive to investors in recent years, its ranking steadily falling in the international survey of competitiveness. With our currency pegged to the US dollar, we have stayed competitive only by the lowering of rents and property value. But our salaries still remain high.

We Liberal Party legislators were aware of that, which was why we volunteered for pay cuts of ten per cent and hoped to persuade our civil servants to make a similar gesture. Instead of meeting our challenge, some civil service representatives and media commentators have since greeted us with abuse. The abuse I can take but not the lack of logic.

We're told, scolded actually, that to cut civil service pay would affect their morale. I think we should be more concerned with the morale of the whole society - employed and unemployed alike. The public morale is so low now that many workers are willing to take pay cuts of 20 per cent or more if their employers can guarantee them job security for the next two years. I believe it's callous for civil servants to insist on getting their four per cent pay increase for the year when so many of our people are happy just to keep working and putting meals on the table.

Our rival Singapore has announced its senior civil servants will take pay cuts of ten per cent, to which they agreed. I refuse to believe our civil servants are any less caring for their community than their Singaporean counterparts. Nor can I accept that the meticulous Singapore government is so rash as not to study the possibilities that the pay cuts might have on retail businesses and the overall economy. I'm sure Singapore has assessed the whole situation and concluded that its priority is to maintain a sound economic policy, rally the people and send a positive message to investors. We in Hong Kong likewise have no reason to assure civil servants an iron rice bowl, much less a golden one, when the rest of us have to make do with a porcelain bowl chipped at the edge.

Hong Kong's overpaid civil servants and their supporters also argue that any pay cut would erode their standard of living. This is false. Since 1997 senior civil servants have seen their salaries rise by 11 per cent while the costs of living have fallen. As deflation continues any pay cut the civil servants may accept should have no effect whatsoever in their spending power. I would much prefer the government cut civil service pay than cut public programs. Money thus saved if given to the needy - such as the elderly, the unemployed and underemployed - would be quickly spent on goods and services and be plowed back to the economy.

Our critics also claim that our real objective in the pay cut is to drive down civil service salaries and prompt the private sector to follow. The fact is the private sector has already reduced its wage bills and it is time for the civil service to conform. The fact is also that private sector pay is decided not by civil service salaries, but by supply and demand, the strength of the economy and employees' performance. The private sector employs three million people, roughly 15 times that of government, whose salaries, whether up or down, will not affect us.

What is more the government routinely relies on the dubious Pay Trend Survey, whose criteria have been unchanged since 1974, to determine civil service pay. I think this mechanism is flawed through bias and is in urgent need of review. Some people ask whether civil servants are overpaid and, if so, why the difference? Certain jobs are not easy to compare. There is no private sector equivalent to the Secretary for Health and Welfare or the Secretary for Security. Some jobs, though, are similar whether they're in the civil service or the private sector.

Could our critics explain the disparity between government junior typists and telephone operators earning $12,000 and those in the private sector earning $6,000 to $8,000 a month? Or why a fresh university graduate accountant or engineer working for the government is getting $21,000 and his peer in the private sector $12,000? The logical conclusion must be that in many jobs civil servants are grossly overpaid.

Some radio callers say civil servants should not have their pay reviewed because they're like other citizens with mortgages to pay. I disagree because most middle to senior level civil servants enjoy subsidized mortgages, housing allowances, and government quarters that shelter them from the daily hardships. Not only are they guaranteed jobs, generous perks, and roofs over their heads - all denied to most of our workers and the private sector middle class - they also have pensions to look forward to.

The Financial Secretary estimated recently that the government would come up short on all three major revenue sources for the fiscal year. A serious deficit of around $50 billion is inevitable. On the other hand, this year alone about 70 per cent of recurrent government expenditure would go towards paying civil servants' salaries - or roughly $160 billion. A suggested ten per cent salary cut would save the treasury $16 billion. This amount is equivalent to the expected revenue from the proposed three per cent sales tax that, when applied, would hurt everyone. We face a stark choice of either reducing government expenditure or increasing its revenue through higher fees, charges and taxes, including those on profit and on income.

Over the weekend the Liberal Party conducted a telephone survey at random with a thousand respondents. Some 78 per cent of them favored legislators taking pay cuts and 62 per cent would like to see civil servants do the same. Public opinion is clearly on the side of sacrifice, not just for the money saved but also its symbolic value.

Hong Kong has a privileged class, the civil servants, who decide on policies, taxes, and their own salaries - all without an elected mandate. The least we the public can expect of them is that they show gratitude, loyalty, competence and also moral authority. The term "civil servants" means that those working for the public should be civil and should serve not each other but us the people. So, contrary to critics' claims, we aren't separating civil servants from the community but are inviting them back to make themselves accountable and Hong Kong competitive. Is that asking too much? You, the people of Hong Kong, should be the judge.

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