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The National Personnel Authority asked the government Monday to cut the basic annual salary for central government workers by 0.1 percent, or 4,000 yen, for this fiscal year through next March.

The report, submitted to the Cabinet and the Diet, also contains a drastic suggestion for reforming the pay system over five years to correct an inequity in which civil servants earn more than private-sector workers, especially outside major cities.

It is the first time in 48 years the authority has made such a drastic recommendation, it said.

According to the report, the basic monthly pay for civil servants would be cut by 0.36 percent, or 1,389 yen, but the size of their annual bonuses would rise by 0.05 of a month’s salary to a lump sum of 4.45 months, compared with the current 4.40 months.

The cuts would be deducted from future paychecks.

The step would cut payroll costs by about 24 billion yen in the initial fiscal 2005 budget, the government said.

As for the drastic reform recommendation, the authority said the basic annual income should be cut gradually, with the goal of achieving an average reduction of 4.8 percent over five years, starting in fiscal 2006. The surplus should be redistributed as special allowances for civil servants working in urban areas, where private workers generally receive higher salaries.

The personnel authority also called for a review of the traditional employment and payment hierarchies and recommended age-based salary adjustments.

A 7 percent pay cut was advised for civil servants of middle age or older, while pay levels for younger workers would be maintained.

It also floated the idea of introducing a performance-based pay system, possibly next April.

The recommendations were submitted to the Diet at a time when the powerful House of Representatives has been dissolved for a general election. Whether the recommendations are introduced will depend on the new government installed after the poll.

The authority makes annual recommendations for public servants, who have limited rights, including in terms of collective bargaining and dispute resolution.

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