Fair and lawful: Secretary for the Civil Service Joseph Wong says the review is fair, lawful and reasonable.

Secretary for the Civil Service Joseph Wong has proposed freezing education allowance rates and abolishing three housing-related allowances.

The Civil Service Bureau today issued a consultation paper revealing the outcome of the review on civil service fringe benefit allowances. If the proposals are implemented, the Government will save $54 million a year, accumulating savings of $600 million in five years.

Mr Wong said: "We have followed the principles of lawfulness, reasonableness and fairness in conducting the review. We have also taken full account of the recent Court of Final Appeal's interpretation of the Basic Law provisions on civil service remunerations, which is, generally speaking, the remunerations of civil servants should not be below the 1997 level.

"We believe the outcome has addressed many of the concerns expressed by civil servants. We have also taken into account views expressed by legislators and the public. We are confident the outcome will be broadly acceptable. I am also hopeful that eventually our package of proposals will gain support from the community at large."

Education & related allowances

The education allowance rates for existing claimants will be frozen at current levels while those for new claimants from the 2006-07 school year will be reduced to the cash levels prevailing on June 30, 1997. For example, the existing maximum rate for British boarding school allowances range from 7,434 pounds to 9,138 pounds a year. The revised rate will range from $81,206 to $93,632.

The school passage allowance rates will be reduced to the rates as at July 1, 1998, while payment rules for both existing and new claimants will be tightened.

Meanwhile, for passage and related allowances, only officers on overseas terms recruited before 1985 are eligible for the sea passage, and it will be phased out in the normal course, subject to capping the allowance rates for the respective class of travel at the rates approved for the 1997 sailing to the UK.

For travelling expenses in countries of origin or places of study, the allowance rates for existing leave passage allowance claimants on overseas terms will be frozen while the allowance for all school passage allowance will cease.

For housing and related benefits, the allowance rate or rate adjustment mechanism will be rationalised as appropriate to better reflect the cost of provision as well as the movement in market property prices. The air-conditioning, furniture and domestic appliance, and hotel subsistence allowances will be abolished.

See the proposals at www.csb.gov.hk. The consultation ends November 21.