The Government plans to submit a bill to the Legislative Council next month to implement the civil service pay cuts, Secretary for the Civil Service Joseph Wong told legislators today.

Speaking in the Legislative Council, Mr Wong said with the full implementation of the pay cuts, the Government will save about $7 billion annually on salary expenses and subventions to subvented organisations.

In line with the Government's target to reduce expenditure, the size of the civil service will be reduced from the current establishment of around 178,000 posts to around 160,000 by 2006-07.

This is not a simple task, he added.

He said the target would be achieved through normal retirement and resignation, a freeze in civil-service recruitment and the launch of the second Voluntary Retirement Scheme.

Mr Wong said the recent outbreak of atypical pneumonia has dealt a blow to the economy of Hong Kong and the health of its citizens.