has recommended that the government reduce the annual salary of central government workers for fiscal 2005 by 0.1 percent, or 4,000 yen from the previous fiscal year's level, to bring it into closer alignment with the annual salary level for private-sector workers. More importantly, it has called for a long-term reform of the pay system for national public servants.
Under the recommendation for annual pay in fiscal 2005, basic monthly pay for national public servants would be reduced by 0.3 percent, and dependent allowances by 500 yen. But annual bonuses would be raised by an equivalent to 0.05 month's pay to an amount equivalent to 4.45 months' pay. This would reduce the central government's personnel costs by roughly 5 billion yen. If local governments follow suit, their annual personnel costs would decrease by about 19 billion yen.
The NPA has also proposed a gradual cut in basic pay on an annual basis starting in fiscal 2006 to achieve an average reduction of 4.8 percent over a five-year period. Instead of an equal 4.8 percent basic pay cut for all central government workers, the NPA calls for a 7 percent cut for middle-aged and older workers, and a continuation of the current pay level for younger workers. The resulting surplus would be distributed in the form of special cost-of-living allowances or "area allowances" to workers in 271 municipalities in 30 prefectures, including Tokyo's 23 wards, where the pay level for private-sector workers is relatively high. The allowances would amount to 3 to 18 percent of the basic pay for workers concerned. This measure is in line with the basic principle that the salaries of public servants should match those of private-sector workers employed under similar conditions.
If these allowances are introduced, workers in urban areas would receive higher salaries than those in rural areas. According to an NPA estimate, the average government worker in Tokyo's Kasumigaseki district, who is 40.3 years old and entitled to the special area allowance, would earn 7.2 million yen annually -- 1.2 million yen more than the average worker in a rural area with no locality allowance.