Financial Secretary Paul Chan announced a new Budget today (Feb. 26), stating that all personnel in the executive, legislative, and judicial branches, as well as district council members, will have their salaries frozen for the 2025/26 year.
Chan explained later that the decision to freeze the pay for all civil servants considers the continuous economic growth over the past two years and the expectation of ongoing growth this year. He noted that citizens' incomes are likely to have increased, with a nominal salary growth rate of 6.9%. Additionally, the current unemployment rate in the labor market is low, indicating room for salary increases.
Chan further mentioned that under the fiscal consolidation plan, the government will systematically reduce expenditures, with a projected cumulative reduction of 7% in recurrent government spending by the 2027/28 fiscal year. By April 1, 2027, approximately 10,000 positions will be cut during this government's term. He believes that public finances will return to a robust state, and after comprehensive considerations, a salary freeze is deemed appropriate. He also noted that this pay freeze policy has received support and understanding from civil servants.
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