The Cabinet on Tuesday approved record wage cuts for central government employees for fiscal 2003 to bring their pay in line with sagging private-sector wage levels, government officials said.

Average annual civil servant salaries will be cut by 163,000 yen to about 6.15 million yen. The measure will reduce government spending by roughly 231 billion yen in the initial fiscal 2003 budget, the Finance Ministry said.

The endorsement of last month’s National Personnel Authority recommendations calls for reducing the employees’ monthly pay by 1.07 percent, or 4,054 yen on average.

Bonuses are to be reduced by the equivalent of 25 percent of one month’s pay. Total annual bonuses, which currently equal 4.65 months’ pay, will equal 4.4 months’ pay in fiscal 2003.

There will be reductions to annual wages for five consecutive years. The personnel authority initially recommended only cuts to bonuses, however this is the second year it has called for monthly salary reductions.

The cuts, retroactive from the beginning of the current fiscal year, would be deducted from winter bonuses after the government submits the necessary bills and the Diet approves them.

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