LEGISLATIVE COUNCIL ─ 22 May 2014 11893

OFFICIAL RECORD OF PROCEEDINGS

Thursday, 22 May 2014

The Council continued to meet at half-past Two o'clock

MEMBERS PRESENT:

THE PRESIDENT THE HONOURABLE JASPER TSANG YOK-SING, G.B.S., J.P.

THE HONOURABLE ALBERT HO CHUN-YAN

THE HONOURABLE CHAN KAM-LAM, S.B.S., J.P.

THE HONOURABLE LEUNG YIU-CHUNG

DR THE HONOURABLE LAU WONG-FAT, G.B.M., G.B.S., J.P.

THE HONOURABLE EMILY LAU WAI-HING, J.P.

THE HONOURABLE TAM YIU-CHUNG, G.B.S., J.P.

THE HONOURABLE ABRAHAM SHEK LAI-HIM, G.B.S., J.P.

THE HONOURABLE FREDERICK FUNG KIN-KEE, S.B.S., J.P.

THE HONOURABLE VINCENT FANG KANG, S.B.S., J.P.

THE HONOURABLE WONG KWOK-HING, B.B.S., M.H.

PROF THE HONOURABLE JOSEPH LEE KOK-LONG, S.B.S., J.P., Ph.D., R.N.

11894 LEGISLATIVE COUNCIL ─ 22 May 2014

THE HONOURABLE JEFFREY LAM KIN-FUNG, G.B.S., J.P.

THE HONOURABLE ANDREW LEUNG KWAN-YUEN, G.B.S., J.P.

THE HONOURABLE WONG TING-KWONG, S.B.S., J.P.

THE HONOURABLE RONNY TONG KA-WAH, S.C.

THE HONOURABLE CYD HO SAU-LAN

THE HONOURABLE STARRY LEE WAI-KING, J.P.

DR THE HONOURABLE LAM TAI-FAI, S.B.S., J.P.

THE HONOURABLE CHAN HAK-KAN, J.P.

THE HONOURABLE CHAN KIN-POR, B.B.S., J.P.

DR THE HONOURABLE PRISCILLA LEUNG MEI-FUN, S.B.S., J.P.

DR THE HONOURABLE LEUNG KA-LAU

THE HONOURABLE CHEUNG KWOK-CHE

THE HONOURABLE WONG KWOK-KIN, B.B.S.

THE HONOURABLE IP KWOK-HIM, G.B.S., J.P.

THE HONOURABLE MRS REGINA IP LAU SUK-YEE, G.B.S., J.P.

THE HONOURABLE PAUL TSE WAI-CHUN, J.P.

THE HONOURABLE ALAN LEONG KAH-KIT, S.C.

THE HONOURABLE LEUNG KWOK-HUNG

THE HONOURABLE ALBERT CHAN WAI-YIP

THE HONOURABLE MICHAEL TIEN PUK-SUN, B.B.S., J.P.

LEGISLATIVE COUNCIL ─ 22 May 2014 11895

THE HONOURABLE JAMES TIEN PEI-CHUN, G.B.S., J.P.

THE HONOURABLE NG LEUNG-SING, S.B.S., J.P.

THE HONOURABLE STEVEN HO CHUN-YIN

THE HONOURABLE FRANKIE YICK CHI-MING

THE HONOURABLE YIU SI-WING

THE HONOURABLE GARY FAN KWOK-WAI

THE HONOURABLE MA FUNG-KWOK, S.B.S., J.P.

THE HONOURABLE CHARLES PETER MOK

THE HONOURABLE CHAN CHI-CHUEN

THE HONOURABLE CHAN HAN-PAN

DR THE HONOURABLE KENNETH CHAN KA-LOK

THE HONOURABLE CHAN YUEN-HAN, S.B.S., J.P.

THE HONOURABLE LEUNG CHE-CHEUNG, B.B.S., M.H., J.P.

THE HONOURABLE KENNETH LEUNG

THE HONOURABLE ALICE MAK MEI-KUEN, J.P.

DR THE HONOURABLE KWOK KA-KI

THE HONOURABLE KWOK WAI-KEUNG

THE HONOURABLE DENNIS KWOK

THE HONOURABLE CHRISTOPHER CHEUNG WAH-FUNG, J.P.

THE HONOURABLE SIN CHUNG-KAI, S.B.S., J.P.

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DR THE HONOURABLE HELENA WONG PIK-WAN

THE HONOURABLE IP KIN-YUEN

DR THE HONOURABLE ELIZABETH QUAT, J.P.

THE HONOURABLE MARTIN LIAO CHEUNG-KONG, J.P.

THE HONOURABLE POON SIU-PING, B.B.S., M.H.

THE HONOURABLE TANG KA-PIU

DR THE HONOURABLE CHIANG LAI-WAN, J.P.

IR DR THE HONOURABLE LO WAI-KWOK, B.B.S., M.H., J.P.

THE HONOURABLE CHUNG KWOK-PAN

THE HONOURABLE CHRISTOPHER CHUNG SHU-KUN, B.B.S., M.H., J.P.

THE HONOURABLE TONY TSE WAI-CHUEN

MEMBERS ABSENT:

THE HONOURABLE LEE CHEUK-YAN

THE HONOURABLE JAMES TO KUN-SUN

THE HONOURABLE TOMMY CHEUNG YU-YAN, S.B.S., J.P.

THE HONOURABLE WONG YUK-MAN

THE HONOURABLE CLAUDIA MO

THE HONOURABLE WU CHI-WAI, M.H.

DR THE HONOURABLE FERNANDO CHEUNG CHIU-HUNG

LEGISLATIVE COUNCIL ─ 22 May 2014 11897

PUBLIC OFFICERS ATTENDING:

PROF THE HONOURABLE K C CHAN, G.B.S., J.P. SECRETARY FOR FINANCIAL SERVICES AND THE TREASURY

MR JAMES HENRY LAU JR., J.P. UNDER SECRETARY FOR FINANCIAL SERVICES AND THE TREASURY

CLERKS IN ATTENDANCE:

MRS JUSTINA LAM CHENG BO-LING, DEPUTY SECRETARY GENERAL

MR ANDY LAU KWOK-CHEONG, ASSISTANT SECRETARY GENERAL

MISS FLORA TAI YIN-PING, ASSISTANT SECRETARY GENERAL

MISS ODELIA LEUNG HING-YEE, ASSISTANT SECRETARY GENERAL

11898 LEGISLATIVE COUNCIL ─ 22 May 2014

BILLS

Committee Stage

CHAIRMAN (in Cantonese): Committee continues to examine the Schedule to the Appropriation Bill 2014.

APPROPRIATION BILL 2014

CLERK (in Cantonese): Heads 28, 47, 51, 55, 59, 76, 78, 79, 96, 100, 116, 147, 148, 152, 155, 160, 162 and 180.

MR ALBERT CHAN (in Cantonese): Chairman, it is unreasonable that all Members stay in the Chamber when the Chief Executive is here; and when the meeting of the Council commences, none of them are present. Please summon them back, please do a headcount.

CHAIRMAN (in Cantonese): Will the Clerk please ring the bell to summon Members back to the Chamber.

(After the summoning bell had been rung, a number of Members returned to the Chamber)

CHAIRMAN (in Cantonese): Committee will now proceed to the fifth joint debate. The theme of this debate is "Economic Development, Commerce and Industry, Financial Affairs; Information Technology and Broadcasting; and Maritime and Aviation". The policy areas covered in this debate are commerce and industry, economic development (other than energy), financial affairs, information technology and broadcasting, and maritime and aviation.

Mr CHAN Chi-chuen, Mr LEUNG Kwok-hung, Mr Albert CHAN, Mr Gary FAN, Ms Claudia MO, Mr SIN Chung-kai and Ms Cyd HO have given notices respectively to move a total of 211 amendments to reduce various sums of 18 heads, including heads 28, 47, 51, 55, 59, 76, 78, 79, 96, 100, 116, 147, 148, LEGISLATIVE COUNCIL ─ 22 May 2014 11899

152, 155, 160, 162 and 180. The contents of their amendments are all within the scope of this debate.

I will first call upon Mr CHAN Chi-chuen to speak and move Amendment No 79 as set out in Appendix 1D to the Script, to be followed by Mr LEUNG Kwok-hung, Mr Albert CHAN, Mr Gary FAN, Ms Claudia MO, Mr SIN Chung-kai and Ms Cyd HO respectively; but they may not move the amendments at this stage.

MR CHAN CHI-CHUEN (in Cantonese): Chairman, I move Amendment No 79 as set out in Appendix 1D to the Script. This amendment concerns "Head 28 ― Civil Aviation Department", which reads "Resolved that head 28 be reduced by $854,502,000 in respect of subhead 000", that is, to reduce the estimated operational expenditure of the Civil Aviation Department (CAD) for the whole year from $854,503,000 to $1,000. Before I go into details of these amendments about the CAD, I will give a brief introduction about the entire joint debate.

There are five amendments concerning the CAD, all proposed by me. Of the 211 amendments covered in this joint debate, I have proposed 23, covering the CAD, the Office of the Government Chief Information Officer, the Commerce and Economic Development Bureau (Communications and Technology Branch), the Inland Revenue Department and the Innovation and Technology Commission. Apart from the amendments proposed by "Long Hair", "Hulk" and me, the amendments covered in this debate also include those proposed by Mr Gary FAN, Ms Claudia MO, Mr SIN Chung-kai and Ms Cyd HO.

I lend my strongest support to the few amendments starting from No 898. They are the main topics to be dealt with in this joint debate which aim at reducing the annual emoluments of Gregory SO, the Secretary for Commerce and Economic Development, amounting to $3.38 million. The main target is Gregory SO. Other than Mr Albert CHAN, Ms Claudia MO and Mr SIN Chung-kai have also proposed to reduce Gregory SO's emoluments. Mr Gary FAN has proposed Amendment No 902 to reduce Paul CHAN's emoluments by half, that is, slashing six months of his emoluments. I will make detailed comments after Mr Gary FAN has spoken. I guess his reason for the reduction is that after the establishment of the Innovation and Technology Bureau, Gregory 11900 LEGISLATIVE COUNCIL ─ 22 May 2014

SO's work will be reduced by half, and hence his emoluments should also be reduced by half. Another set of amendments that I will support is proposed by Mr LEUNG Kwok-hung and Ms Cyd HO in Amendment Nos 1018 and 1019 respectively, which is to reduce the expenditure on the annual emoluments of the Director of Broadcasting. I hope Members will pay special attention to my aforesaid amendments and actively consider lending their support.

I will now talk about the CAD, one of the major disaster areas of the SAR Government, which has now turned into a "Club of Scandals". After hearing my speech, Members will realize how serious the problem is. Among the five amendments to deduct the expenditure, the harshest ones are the first two, namely to slash the estimated operational expenditure for the CAD for the whole year which amounts to $854,502,000 and to slash the estimated expenditure on salaries under the personal emoluments of the CAD staff for the whole year which amounts to $479,122,000. I will not read out the other three amendments in detail here.

The CAD, a government department with a yearly estimate exceeding $860 million, keeps saying that it would turn Hong Kong into a top international and regional air transport hub. It controls the air traffic of the whole territory, regulates all aircrafts registered in Hong Kong and monitors various airports and heliports in Hong Kong. But among all government departments, the CAD tops the list in terms of the number of scandals involved. These scandals not only come in a large number, each one of them is also very serious and even fatal. They include first, the construction of a luxurious new headquarters, which is a dereliction of duty; second, the purchase of an air traffic control system at a high price but difficult to use, a case of alleged abuse of power and an element of corruption may also be involved; and third, concealing the fact that the staff responsible for vetting tenders was later transferred to the company that was awarded the tender, which involved abuse of power for personal gains and transfer of benefits. I will expound on these scandals one by one.

First, the CAD is an independent kingdom with its own palace. As revealed by the media earlier, in the new CAD headquarters, constructed at a cost of $2 billion of public funds, there is a professional dance studio with three sides of the walls covered with full height mirrors and fitted with ballet dance barres. It is a standard dance rehearsal studio. May I ask how a dance studio is related LEGISLATIVE COUNCIL ─ 22 May 2014 11901 to the work of the CAD? Second, inside the headquarters, a total of 66 LED televisions have been installed respectively in the lobby, corridors on each floor, lift lobbies, as well as places with very limited access of people. The total cost is at least $5.9 million of taxpayers' money. The new CAD headquarters has been criticized for wasting public money. Third, the Director-General of Civil Aviation (DGCV), a D6 civil servant, is suspected of receiving preferential treatment as he can enjoy facilities that are only available to Secretaries of Departments and Directors of Bureaux, which include an exclusive toilet and showering facilities in his office, so that he needs not share the toilet with other staff.

Chairman, there are stringent regulations regarding the specifications of offices of government officials and only the Chief Executive, Secretaries of Departments, Directors of Bureaux, D8 or above directorate civil servants and heads of individual disciplinary forces are allowed to have a private toilet in their offices. I wonder if you Chairman are entitled to such a facility. The ranking of the DGCV is only D6 which is not up to that level. As far as I understand, the Architectural Services Department (ASD) only strictly followed the orders of the CAD while the detailed design of the interior of the headquarters was carried out by the CAD's project team. In the last joint debate, Mr LEUNG Kwok-hung proposed to cut the expenditure for the ASD. This case can be one of the examples showing that the ASD follows the orders of the CAD blindly. Is it not that the Government has very strict internal guidelines, even covering the sizes of desks and rooms? The CAD is totally lawless.

Of course, the CAD did provide justifications, let us see if they are convincing. According to the CAD, the DGCV has to inspect hangars and construction sites of airport facilities from time to time. Besides, being the Chief Inspector of Accidents and the designated Search Director for Hong Kong's Aeronautical Search and Rescue Region, the DGCV has to supervise search and rescue operations over long periods of time. As the headquarters is far away from the urban areas, the DGCV cannot possibly go home to take a shower after finishing all the work and then return to work on the Airport Island. Sometimes, the DGCV has to attend public official functions and has no time to go home; hence, he is provided with a private toilet and a shower room. Do Members consider this explanation plausible?

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Why do I say the CAD is an independent kingdom? The resources, facilities and services allocated to the CAD are disproportionately large in quantity. Whenever it makes a request, the Government will approve for some unknown reasons. After the CAD headquarters was moved, the DGCV continues to occupy the free parking space provided for the CAD in the Queensway Government Offices Building, but CAD officers only go to the Central Government Offices occasionally. Thus the CAD occupies a parking space and leaves it idle most of the time, which is a waste of government resources. Of course, one may say that this is only a trivial matter as the Government has plenty of parking spaces, but from this small example, we can see that from the headquarters to a small parking space, the CAD has never well utilized the resources.

There is another incident, which I also played a part in exposing the problem, and I had also raised a question in this Council about it. The problem is related to the office chairs in the Air Traffic Control Centre of the CAD. It was found that 139 luxurious office chairs of well-known brands were procured in batches in 2012 and 2013 for use in the new headquarters. Among these chairs, 130 were model Aeron, with the retail price ranging from $8,000 to $10,000 each, and the total amount of these 130 chairs was $1.1 million. In reply, the CAD said that because those chairs were comfortable and could adjust the users' sitting posture, that is, they were ergonomically-designed or something like that, they could prevent the users from getting back pain. The CAD also said that it purchased those expensive chairs to meet the needs of the Department's round-the-clock operation and to minimize the occupational safety and health risks arising from long hours of work that demanded intense concentration. Colleagues of other government departments have pointed out that the posts require round-the-clock operation, but the staff only work on eight-hour shifts and there are three shifts a day. They query why other government departments do not need such expensive chairs.

I do have data to back me up. The chairs used by counter staff of the Immigration Department are worth no more than $900 each. In comparison, chairs of the CAD, costing between $8,000 and $10,000 each, are extremely luxurious. We have to ask which government department allow its staff to "dream in the office", to sleep and not focus on their work? This is utter nonsense.

LEGISLATIVE COUNCIL ─ 22 May 2014 11903

The second sin is even more serious and it concerns the new air control system. In 2011, the CAD spent $480 million to purchase from the Raytheon Company of the United States (please remember this company) a new air traffic control system known as Autotrac3. The commissioning date had repeatedly been delayed and the system had stood idle for over three years. Even after spending almost $100 million to improve it, the CAD still could not feel assured to use the new system. The stability of the new system was in question. When the supplier was awarded the tender, the new system did not have an international record of stable performance, which was against the established procurement principle of the CAD. It was utterly outrageous that the CAD purchased a system that did not have an international record of stable performance.

All along, the CAD has adhered to the procurement principle that it will only procure a system that already has a proven 100% safety record. However, the CAD violated this principle this time. During the tendering period, the system had only been tried in the New Delhi Airport in India and the system had recorded six serious malfunctions within 15 months. Whether it possessed a proven performance record was called in question. Some Air Traffic Control Officers even said that the design of the interface of the new system was poorer than the old one. For example, Air Traffic Control Officers must know the distance between the aircrafts. Once two aircrafts are too close to each other, they must take immediate anti-collision measures. With the old system, they only had to press two buttons and the distance between two aircrafts was clearly shown; but with the new system, they have to press the buttons a few more times before the distance is shown. Such information is vital as a little delay can be fatal. Is the CAD betting on the lives of all passengers on board the plane?

Apart from the standard of the system, I also have to talk about the tender exercise. Concerning the tendering process, a tenderer alleged that the company which was awarded the tender failed to meet the requirement of possessing a proven performance record. The Government responded by saying that it had referred the complaint to a dedicated and independent body for review, so as to ensure that the Government had not been unfair or biased towards any tenderer. This is the Government's standard practice. By alleging that it had dealt with the case, it adopted the art of "hypocritical rhetoric", saying that no problem had not found, instead of there were no problems, and hence, the Government had not been unfair or biased towards any tenderer.

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LEUNG Pui-kwong, a former Chief Air Traffic Control Officer of the CAD, was reappointed by the CAD after retirement as a contract staff who later joined the assessment panel to assess the tender applications. The committee later selected the Autotrac3 system. However, after formally leaving the CAD in 2012, he immediately joined Chinney Alliance Engineering Ltd (Chinney), a sub-contractor of the Raytheon Company. In reply to enquiry by reporters, the CAD said that LEUNG Pui-kwong was not a member of the assessment panel and he did not participate in assessing the tender applications. However, a year later, the case was revealed. After joining Chinney, LEUNG Pui-kwong was responsible for providing training to Air Traffic Control Officers on the operation of this new system. Although LEUNG had informed the CAD beforehand, it was obviously a case of deferred benefit. To put it simply, he was the one who awarded the contract to the relevant company and then it was him who come back to teach CAD staff how to use the system. Is there no problem with this arrangement?

In one tender exercise, three scandals are involved. First, the CAD bought the wrong product, the air traffic control system looked nice but was actually useless; second, there was suspected transfer of benefits as someone signed a new contract on behalf of the CAD and then joined the relevant company for more favourable terms of employment; third, the CAD overtly lied to the public, denying that LEUNG Pui-kwong had participated in assessing the tender applications. In this case it condoned the wrong doing of its staff and covered up for him.

Mr CHAN Chi-chuen moved the following motion:

"RESOLVED that head 28 be reduced by $854,502,000 in respect of subhead 000."

MR LEUNG KWOK-HUNG (in Cantonese): Chairman, Mr CHAN Chi-chuen really does not know the knack for being an official. I recall the reply given by the Civil Aviation Department on that day, "I did not tell you that I did not find any problems." Chairman, quick-witted as you are, do you know what he was saying? "I did not tell you that I did not find any problems," which means he just said nothing.

LEGISLATIVE COUNCIL ─ 22 May 2014 11905

I am now going to talk about Amendment No 913, concerning "Head 155 ― Government Secretariat: Innovation and Technology Commission". This subject is of course fresh from the oven. In his election manifesto, the Chief Executive especially put forward the idea of "One Heart, One Vision". On page 29 of his manifesto, he proposed "Promoting industrial development and innovative technology" and under item 16, it was proposed that the Commerce and Economic Development Bureau be restructured into (1) Information and Technology Bureau, and (2) Industrial, Commercial and Tourism Bureau. Now he says, "I did not tell you that I did not find any problems". Now he proposes the establishment of the Innovation and Technology Bureau, but in his manifesto the word "innovation" is not mentioned.

Of course, after two years, one's idea may have changed. Before there is any innovation, let me talk about the Innovation and Technology Commission (ITC) rather than the Innovation and Technology Bureau. Concerning the ITC, I remember learning the expression "piles of notorious records" in primary school, and it is just right to use it to describe the ITC.

Chairman, being monitored by the Hong Kong Productivity Council (HKPC), the ITC has an intimate relationship with the HKPC. The HKPC is monitored by the Audit Commission and it is responsible for monitoring the ITC. I will not talk about the notorious records of the HKPC for the time being, because you may find it unrelated to this topic. I can point out that under the management of the HKPC, some assets worth $50 million were lost and this fact was uncovered by the Audit Commission.

What is the problem with the ITC? The problem is that it is left unmonitored and there is no regulatory body to monitor the ITC; hence if mistakes are made, no authorities should be held responsible. Let me cite a very simple example. The ITC owns a building with a vacancy rate of 15% and among the 15% of vacant units, 38% (about 6% to 7% of all the units) have been vacant for over a year. There are also 13 cases of entertainment expenses exceeding the limit. These incidents are trivial. Most importantly, money is meant to be spent, but if money is not spent for a good cause, a defense can still be made. However, there is still another problem, which is making false reports.

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The Innovation and Technology Fund (ITF) is managed by the ITC. The Audit Commission found in random checks that between 2008 and 2012, the ITF used $160 million to sponsor 25 research projects; the amount of money involved was not big. Of these projects, 12 inventions could not be turned into commercial commodities. Chairman, I wish to explain that Hong Kong has many inventions such as medically-related products and The Chinese University of Hong Kong conducts many research projects every day but its researches are not managed by the ITC.

The Hong Kong Polytechnic University invented an electric car which has been sent to the BYD Company in the Mainland for testing. This project is a success as it can be manufactured on a production line, but not being treated as a toy after the production of a sample. The ITF spent a total of $160 million to sponsor 25 projects but 12 of them, almost half, could not be turned into commercial commodities or failed to achieve technology breakthroughs. Such projects might be a product of plagiarism; even if they were not so, the performance was not satisfactory. Yet, eight projects were graded as "successful".

Moreover, some projects have not been evaluated. After production, 12 projects proved to be failures; and the remaining 13 have not been assessed as scheduled, meaning that after production, no assessment has been made. Some may say that the workload is too heavy, but the problem is that the average time taken for assessment is more than one year, and the longest time is over 33 months. How many 33 months can one get in life?

What is the result of the money spent? Five research and development centres lose money year after year. When an invention is presented to the industry, people would ask, "What can you do with it? Is it a sample? Let me take it home for my son to play with." We know the story about Walkman produced by Sony. As Akio MORITA's son liked music and wanted to listen to music all day long, Akio MORITA thus asked his engineers to produce something which enabled his son to listen to music, but people around him could not hear the music. That was how Walkman came about and it sold very well.

However, the projects are carried out with public money, and the results are highly unsatisfactory. The industries also think that the Government has LEGISLATIVE COUNCIL ─ 22 May 2014 11907 allocated a lot of money … They took the samples home for their children to use but those things could not be produced on a mass scale. As the invention is meant for use by the industry but not by the Government, the Government will not make investment, and users or industrialists are dissatisfied and query whether the Government can do a better job.

A problem has thus arisen. Concerning the Small Entrepreneur Research Assistance Programme of the ITF, the default rate is very high as many recipients do not have money for repayment. I will keep it brief. Only 5% of the companies that applied for funding have paid up the loans and 60% of the companies have not done so. The total amount in arrears is over $170 million. Chairman, what does that mean? It means that the money has been thrown into the sea. No effort has been made to recollect the money owned and the only concern is to spend the money allocated. That is the practice of many government departments or agencies funded by public money. I am used to it. Government departments or Policy Bureaux will try every means to spend all the money towards the end of the financial year, such as paying overtime allowances. In the case of the Independent Commission Against Corruption, it spends all the money set aside for informants. Such practice has now been uncovered. Has the Small Entrepreneur Research Assistance Programme become a means through which companies that the ITC is familiar with can draw money? Has ITC used public money to sponsor people who have no relation with the ITC to start up business? I have no idea.

The Audit Commission had tried to recover the unpaid amount for a long time but to no avail; 60% of the companies had not repaid the amount owed, as for the remaining 30%, though repayment has been made, it only covered half of amount owed. There were five cases in which the unpaid amount could not be recovered due to winding up of business. An amount of $1.7 million had to be written off officially. In order words, the staff of the Audit Commission was told that the amount was unrecoverable because the companies in question had closed down. Chairman, the case is very simple, just like borrowing money from the bank. Very often, I receive such calls, asking me if I need to borrow money. If I say I want to borrow $200 million, the caller will hang up right away. But if I say I want to borrow $200,000, he will certainly ask about my occupation and if I tell him that I am a Member of the Legislative Council, I can borrow more because the capacity to repay loan is a prime factor.

11908 LEGISLATIVE COUNCIL ─ 22 May 2014

From this we can see how unreliable the control system is. First, it does not care whether the product can be commercialized and put on the production line; in other words, it cannot help small factory operators. Second, people who genuinely need to borrow money may not get the approval, and people who squander the money borrowed do not have to repay the loan. What is to be done? Why should we allocate funding to it? This is a very serious problem. Chairman, why should I bring up this problem? Many people ask me, "Mr LEUNG Kwok-hung, will you stage a filibuster on the establishment of the Innovation and Technology Bureau?", buddy, please resolve the problems about the ITC first. How can things be handled in this way. Chairman, if one fails to handle a simple task properly, how can he be entrusted with a serious task? The answer is clear enough. Therefore, we are discussing the messy account of the ITC today. As all government officials are here today to answer our enquiries, let me see if anyone can answer my question. I now publicly denounce the ITC and I also urge for stricter monitoring. If the Innovation and Technology Bureau is to be established, it must be subject to strict monitoring. But since no one responds and I am free to make criticisms … no wonder it is said that we have reached a critical point now.

There is one other point, whether private funds, privately raised funds and funds monitored by public ordinances should be reviewed. Let me tell you, the Innovation and Technology Support Programme and the Small Entrepreneur Research Assistance Programme have already operated for 14 years, but have never been reviewed because they are funded by the ITF. As I have said just now, these two programmes are performing badly but they have not been reviewed for 14 years. Chairman, for a company that keeps losing money year after year for 14 years and cannot recover the money it has lent out, how can one say that a review is not needed? Even if we, the Legislative Council, are not aiding and abetting the evil-doer, we are being misled and cheated.

The ITC sought funding approval of the Finance Committee of the Legislative Council in 2005, 2009 and 2012 and was granted a total of $918.2 million under the ITF. It has sought funding three times but has never been reviewed in 14 years. After being granted a sum of money, the ITC failed to attain self-sufficiency within a short time. We have given the ITC so much money for the infrastructure and provide it with hardware and software, yet all it can accomplish is just some minor tasks, and it still needs our further funding. Chairman, is there a point to debate? The ITC, being a small department, has all LEGISLATIVE COUNCIL ─ 22 May 2014 11909 along been monitored by government agency or by the HKPC authorized by the Government. It has also been monitored by the Legislative Council and its funding has also been approved by the Finance Committee. How can it still waste the funds allocated to in such a way.

Chairman, with such poor performances, it still has the guts to ask for a pay rise. Earlier, when the ITC renewed the contract of Wilson FUNG, the Executive Director of the HKPC, it raised his gratuity rate from 12.5% to 15%. Chairman, I hope I can get the same. Our present gratuity is $500,000. Can it be raised to $600,000? Can I apply to you for an increase? Of course not. Many Members think that the amount should be $0. How can ITC act like that? It neither made the appointment on the basis of merit, nor evaluated the work of its staff.

Therefore, in simple words, the HKPC has totally disregarded the operation situation and adopted the so-called variable pay scheme. What is it about? It means on top of a fixed salary, it will give out a bonus according to the performance of the enterprise. Buddy, no review has been conducted for 14 years, no achievements have been made with hundred million of funds allocated, and all information about the ITC is negative, but it still gets a pay rise. Is it reasonable? From 2007-2008 till last year, the allocation has increased 11 folds, and $64 million was lost last year. Is it not drinking our blood? Chairman, we are being eaten alive.

Chairman, I will not approve the funding to the ITC. If LEUNG Chun-ying's subordinate cannot give us an account, the Innovation and Technology Bureau will certainly become LEUNG Chun-ying's "Trauma Technology Bureau". I will not allocate funds to it. It will have to resolve this problem first. Thank you, Chairman.

MR ALBERT CHAN (in Cantonese): Chairman, first of all, I would like to speak in support of Mr CHAN Chi-chuen's proposed amendment to deduct the $854 million expenditure for the Civil Aviation Department (CAD). Concerning the CAD's procurement of the Autotrac3, an air traffic control system that he talked about just now, I will speak more in detail later. In my view, I must take this chance to expose the two sins committed by the CAD in these years. Many people only know that the CAD controls aircraft movements and 11910 LEGISLATIVE COUNCIL ─ 22 May 2014 manages the airport, but they do not know that the airport itself and the management of the CAD have seriously affected people in two areas, namely noise pollution and air pollution.

Under the existing laws in Hong Kong, the Environmental Protection Department or relevant ordinances cannot regulate aircraft movements. We can only control problems of noise and air pollution arising from aircraft movements through the CAD's administrative measures. However, there are at present no specific laws to regulate the problems of air and noise pollution produced by aircrafts. The CAD basically controls or attempts to control noise and air pollutions produced by aircrafts through regulating the time of aircraft movements, the flight path, as well as the speed and altitude of aircrafts. The speed and angle of aircrafts in taking off and their flight paths will cause noise and air pollutions, affecting local residents. I will later produce some figures to help Members have a better understanding of the situation.

Concerning the noise of aircrafts, we have raised criticisms since the commissioning of the Chek Lap Kok Airport. Each year, I raise questions on the impact of the aircraft noise on the residents. We had held numerous meetings with the CAD and staged many protests at the CAD headquarters to voice the residents' anger. Owing to aircraft noise, some residents suffer from insomnia, some have to take sleeping pills on a regular basis and some even have to seek psychiatric treatment. Some residents have moved away from the place where they had lived for years simply because they could not bear the noise. How bad is the noise problem? Let me quote some data.

Park Island in Ma Wan is one of the places badly affected by the noise. Although Sha Lo Wan is worst hit, it is practically uninhabited now. Owing the serious noise pollution, the Government relocated all residents in Sha Lo Wan and forbade the construction of any buildings there. However, the Government refused to compensate the people. The land could have been designated as a village and small houses could have been built within the boundary of the village. But owing to the noise control policy, the Government has frozen all development in the area, leading to great indignation of owners. Hong Kong does not have any policy in this respect. Let us look at the examples in overseas countries. I went to the United States years ago to study how the problem of noise pollution was handled. If the noise level of a certain place exceeds a certain standard, the local government would provide land compensation and LEGISLATIVE COUNCIL ─ 22 May 2014 11911 removal allowance. However, as there is no such policy in Hong Kong, the CAD has ignored the people's repeated requests and the Government has shown no concern.

Back then, the development of the airport had to be approved by the Advisory Council on the Environment (ACE) of which I was also a member. The Government clearly stipulated the use of the Noise Exposure Forecast (NEF) 25 as the criterion. The NEF contours are generated by some complex calculations which take into account the number of aircraft movements in the daytime and nighttime to project the noise produced by aircrafts. A contour map is then made with roughly oval shape lines designating the NEF20, NEF25 and NEF30 zones by connecting all points of the same noise exposure. In the past decade, I have repeatedly asked about the updated contour lines but the CAD refused to release such information. Apart from the projected NEF contours of the airport area mapped out by the ACE at that time, the CAD has so far refused to provide any information about the actual noise level. Hence, under the law, we cannot hold the Government responsible based on our own estimation. I will follow up on that issue later on.

Looking at the present noise problem, we can see that in Park Island, the number of cases with the noise level reaching 70 decibels was 10 425 in 2012, 2013, that is, 25.8 cases each day on average. For Hong Kong Garden in Tsing Lung Tau, 4 245 such cases were recorded in the same year, 10 per day on average. Chairman, if we compare the situation in 2013 with that in 2000, we will see a rather dire situation. I wonder if you have friends living in Park Island or Hong Kong Garden …

CHAIRMAN (in Cantonese): Mr CHAN, my family members also live in Park Island. What is the connection between the information you are talking about and the amendment in question?

MR ALBERT CHAN (in Cantonese): There is a connection because the amendment proposed to deduct the expenditure for the CAD on the ground that it has ignored its duty, disregarded the impact of noise on the people and condoned the deterioration of the noise problem. There are three reasons why I support the amendment, namely first, the problem of air pollution that I mentioned just 11912 LEGISLATIVE COUNCIL ─ 22 May 2014 now; second, the noise problem; and third, corruption and aviation safety problem might have been involved. These three problems well justify the deduction of the expenditure of $854 million.

Concerning the deterioration of the noise problem, I believe no other government departments in Hong Kong will be worse than the CAD in neglecting its duty and condoning the deterioration of conditions that affect the people's daily lives. Of course, the Government allows the deterioration of the problems because it always gives economic development the top priority. As regards the noise problem, the number of cases with the noise level exceeding 70 decibel in Tsing Lung Tau was 735 in 2000. Many people have no idea how loud it is when the noise level reaches 70 decibel. With noise at that level, some people will be awakened. The noise level of an ordinary fan is about 50 decibel …

CHAIRMAN (in Cantonese): Mr CHAN, you do not need to expound on the noise problem in detail.

MR ALBERT CHAN (in Cantonese): OK, I understand. I am afraid that many people do not understand the seriousness of the problem or what the decibels represent, but I understand the Chairman's concern.

In 2000, 735 such cases were recorded in Tsing Lung Tau and in 2013, there were 4 246 cases, an increase of more than four-fold. In 2000, 4 260 cases were recorded in Park Island with the noise level exceeding 70 decibels and in 2013, there were 10 425 such cases, which were more than double. The problem is quite serious. Of course, many other places are also affected, including Tsing Yi, Tsuen King Circuit, Tsuen Wan Centre, Allway Gardens, Belvedere Garden, with some parts in Tung Chung in particular.

Furthermore, I would like to talk about the pollution caused by aircrafts. The pollution problem in Tung Chung has deteriorated in recent years and it has become the most polluted place in the territory as far as air is concerned. Many do not understand why Tung Chung is so badly polluted, which is even worse than Causeway Bay and Central. The air pollution problem in Tung Chung is partly caused by carbon dioxide, sulfur dioxide and suspended particulates produced by aircraft movements, especially during their take-offs. Many air quality surveys have found that between noon and 2 pm in the summer when LEGISLATIVE COUNCIL ─ 22 May 2014 11913 there is little wind, the density of suspended particulates in Tung Chung is the highest in the territory, during which time the Hong Kong Observatory would issue health warnings. When a health warning is issued, pregnant women, elderly people and people suffering from respiratory diseases are advised against engaging in strenuous exercise. In other words, if one engages in physical labour or sports, they face health risks that may even be life-threatening. These effects are very often invisible to us.

These two problems have caused great sufferings to the residents affected. Such sufferings are like what Mr WONG Kwok-hing has always said, "day and night, night and day". However, I do not see any Members in this Council, especially those from New Territories West, care about this problem. On the contrary, they advocate for the construction of the third runway and the extension of the airport to allow more flights. Therefore, the problems of noise and air pollution will be aggravated, which is attributed to the dereliction of duty on the part of the CAD.

Just now, Mr CHAN Chi-chuen mentioned the problem concerning the Raytheon Company (Raytheon), in fact, I had made some comments in the media earlier. As Mr CHAN Chi-chuen has already talked about the situation, I will not repeat. I only wish to point out some special phenomena which either the Government or the Independent Commission Against Corruption should look into thoroughly. I have gone over some internal papers and found that there were many irregularities in the tendering process which were shocking. For example, before Raytheon was awarded the tender, there were many unusual or unreasonable changes to the tender documents, including changes of some wordings. Take for example similar tender documents in 2001 and 2006. The definition of "system" included hardware and software but in the tender documents concerning the Autotrac3 system, the definition has been changed. If one reads the details carefully, they would find that the changes to the definition were obviously tailored for Raytheon. I will not go into details because they involve very complicated legal problems and very complicated tender procedures. However, for industry players familiar with tender procedures and the importance of definitions, they can tell the problems at a glance. If one studies the documents in depth, they will find that some people in the high echelon obviously changed the terms and definitions in the tender documents to suit the special status and special conditions of a certain company.

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Hence, I find it highly probable that corruption was involved for such a situation. However, the Government seemed to be in the dark, oblivious to what had happened, and allowed the parties concerned to take whatever actions they like, such as changing the documents and the practice. It is hard to believe that it is so easy for corruption to take root in Hong Kong. I hope other government departments would take actions to do justice to the people. The reason is that according to the recommendation of the CAD, the Government has to allocate an additional $89 million to update some systems after the tender exercise. Owing to some special arrangements stated in the tender document, there is an arrangement for updating the system. From the invitation for tender to the award of tender and even afterwards, it is indeed surprising that so many changes have been made.

The CAD is rife with many problems, including the two sins of noise and air pollution which I mentioned just now, and the issues of corruption and aviation safety. Chairman, I am very worried that our aviation safety would be compromised. India has given up the Autotrac3 system but Hong Kong is still testing it. Under such circumstances, aircrafts may suddenly disappear off the radar due to blunders of the air traffic control system or an aviation disaster would happen due to miscalculation of data. I have voiced my concern but whether the high echelon in the Government listens is another story. We often give warnings about many things but government officials always treat our words as nonsense. Therefore, please put on record that I am gravely worried about the safety of our air traffic control system.

MR GARY FAN (in Cantonese): Chairman, this morning I had to attend the meeting of the Sai Kung District Council and was unable to attend the Chief Executive's question and answer session. However, I still cannot agree to the Chairman's approach of cutting short the session.

Chairman, in this joint debate, I propose two amendments to the estimates concerning "Head 152 ― Government Secretariat: Commerce and Economic Development Bureau (Commerce, Industry and Tourism Branch)", namely Amendment No 894, to deduct the estimated subventions for the Hong Kong Tourism Board (HKTB) to promote Hong Kong in the Mainland for the whole year in respect of subhead 000, and Amendment No 902, in respect of subhead 000 again, to deduct the estimated six months' emoluments of Secretary LEGISLATIVE COUNCIL ─ 22 May 2014 11915 for Commerce and Economic Development Gregory SO. In the following, I will talk about the amendment about deducting the HKTB's estimates first.

Chairman, this year, the percentage of the HKTB's estimate for promoting Hong Kong in the Mainland is very high, taking up 25% of the total estimate for promoting Hong Kong globally, amounting to $41.8 million. I remember that I protested to the HKTB in 2012 against its policy of allocating excessive resources to the promotion activities in the Mainland. The relevant amount then was $27 million and now it has risen to $41.8 million. The HKTB claims that this estimate is 14.3% lower than that of the last financial year and this percentage is minimal when compared to the surge in Mainland tourist arrivals in recent years. Hong Kong residents can no longer cope with the upsurge in the number of Mainland tourists, which has a great impact on the people's livelihood in Hong Kong. Recently, the Research Office of the Legislative Council Secretariat has released a Research Brief on the Individual Visit Scheme (IVS), the findings of which have genuinely and clearly reflected how the livelihood of the Hong Kong community has been sacrificed in the face of the continuous growth in Mainland visitor arrivals and its impact. I will use my accountable allowance for office expenses to print large quantities of the Research Brief, so that more members of the public can have a look. In my speech I would like to quote from the Brief some data to explain why the HKTB should stop spending so much public money to invite more Mainland visitors to come to Hong Kong. Instead, it should adjust its promotion strategy, so that the development of the industry and the livelihood of the community will return to a healthy state.

Chairman, since the introduction of the IVS, the number of Mainland visitor arrivals soared from 16.6 million in 2002 to 54.3 million in 2013, an increase of more than three times. The large number of Mainland visitors has "overcrowded" local tourism facilities and even our public transport system. According to the papers submitted by the MTR Corporation to the Legislative Council earlier, the Government has overestimated the carrying capacity of the MTR for years. If we take four passengers per sq m as the benchmark of service, which is closer to the real situation and the standard of other cities in the world, the carrying capacities of the Tsuen Wan Line, Kwun Tong Line, Island Line and West Rail Line have already exceeded 90% during peak hours, while those of the East Rail Line and Tseung Kwan O Line have even exceeded full capacity. The train compartments are absolutely jam-packed. As far as I know, only a few Members go to work by the MTR every day. The 11916 LEGISLATIVE COUNCIL ─ 22 May 2014

Government has ever been willing to look squarely at this problem. First, Secretary for Commerce and Economic Development Gregory SO asked Hong Kong people to be tolerant and wait a bit longer to board on trains. Recently, CHEUNG Chi-kong, a Member of the Executive Council, attributed the overcrowdedness of the MTR to the increase in the working population and denied that it had anything to do with the IVS. These two persons had no regard for public sentiments when they made such remarks as those remarks were totally contradictory to the first-hand experience of people every day. It is evident that the Government is not sincere enough in solving the problems created by the huge influx of Mainland visitors travelling under the IVS (IVS visitors). As such, Chairman, my proposal to cut the estimated expenditure for the HKTB to promote Hong Kong in the Mainland is to solve the problem at root in an appropriate and healthy manner. It aims to reduce the Mainland visitor arrivals, so that Hong Kong people can at least find it easier to breathe when they go to work or go to school by the MTR in Hong Kong, a place of their own.

Chairman, among all IVS visitors, 64.9% of them do not spend the night here. Their purpose of coming to Hong Kong is merely for shopping, and nothing more. The items they want to purchase are medicines, cosmetics and powdered formula, thus seriously disrupting the livelihood of local people. The acute shortage of powdered formula in early 2013 was a case in point. According to the Research Brief of the Research Office, the number of shops selling cosmetics and personal care products, which had the fastest and biggest growth, surged by 1 500% between 2004 and 2013. According to a survey recently conducted by a community group, that is, the North District Parallel Imports Concern Group, it was found that in June 2013, there were only seven shops specialized in parallel trading activities in the neighbourhood of Shek Wu Hui in Sheung Shui, but in January 2014 the number has increased to 26, a surge of over 270% in just six months. Such shops usually located in alleys and small streets. They only sell goods in bulk to parallel goods smugglers and cross-border couriers and the goods they sell include powdered formula, baby diapers, Ferrero Rocher candies and Yakult drinks. The trading activities of parallel goods smugglers continue to cause nuisance to local residents, and small shops selling daily necessities are forced to close down as they cannot afford the hefty increase in rents. The trading of parallel goods or the bulk purchase of daily necessities are not tourism-related activities. The parallel goods smugglers are not genuine tourists. Hong Kong should not be degraded to become the supermarket of Mainlanders or even the haven of parallel goods smuggling.

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Chairman, apart from shops selling cosmetics and personal care products, jewelry shops in Hong Kong has also increased 30% in the last decade, leather product shops, 32.9%, and shops selling garments and shoes, 41.5%. All these are high-end brand name products catered for IVS visitors. In the Mong Kok Pedestrian Precinct and along Canton Road in Tsim Sha Tsui, almost all shops belong to the above categories, and many long-established small shops rich with local characteristics had been crowded out. Apart from Mong Kok and Causeway Bay where the rents of shops have rocketed, North Point and even the Southern District of Hong Kong Island are also affected by the IVS. The shopping mall in South Horizons West also faces the risk of becoming a big shopping mall for IVS visitors. Small shops selling daily necessities have to face the plight of being forced out. Hong Kong residents just cannot withstand the pressure of more IVS visitors.

Chairman, after joining the Legislative Council in 2012, I had brought up the problems caused by IVS visitors, but many Members did not care and even criticized me for not being accommodating. It was only when their neighbourhood has to face the above problems, as in the case of South Horizons, that Members begin to cry foul.

Chairman, the percentage of Mainland tourists in the total number of tourists had risen from 41.2% in 2002 to 75% in 2013, that is, in every four inbound tourists, three are from the Mainland. The tourism industry in Hong Kong is becoming increasingly Mainlandized and unitary, solely catering for Mainland tourists. According to the statistics on visitors to Hong Kong in 2013 published by the HKTB, there has been a substantial drop in the number of inbound tourists from various countries. For Asian countries, we see the biggest drop in the number of tourists from Japan, with a substantial drop of 15.7%, followed by Canada, 10%, and tourists from the United States, the United Kingdom, Germany, Holland, Australia and Singapore have also decreased. As a result, our tourism industry has become dependent solely on Mainland tourists, which is by no means healthy. In the long run, it will also be detrimental to our tourism industry and even the overall interests of Hong Kong.

During the National Day Golden Week that has just past, the number of Mainland visitor arrivals dropped the first time ever since the introduction of the IVS, mainly due to the shrinkage of the Mainland economy and the anti-corruption campaign in the Mainland. Some players of the tourism industry 11918 LEGISLATIVE COUNCIL ─ 22 May 2014 would of course point their fingers at the recent protests and demonstrations in Hong Kong, attributing that to the decrease of IVS visitor arrivals in Hong Kong. But even more people from the tourism industry say that the main cause is the shrinkage of the Mainland economy. If we lay all eggs in one basket, when the basket, that is, the economy in the Mainland, suffers a periodic shrinkage, it will be detrimental to the tourism industry in Hong Kong; the retail and hotel industries will also be affected.

Therefore, the Government should regard this year's National Day Golden Week a signal, indicating the potential risks for any industries to rely solely on one single market. When the Mainland's economy experiences a downturn, it will threaten the survival of our tourism industry. Hence, the HKTB must take the lead to explore and develop more markets for Hong Kong's tourism industry, rather than continue to allocate substantial or even excessive resources in the Mainland market for promotion campaigns.

A sound and healthy tourism industry will help establish the brand name and image of this city. In the past, in the eyes of foreigners, Hong Kong was a place where East met West. Hong Kong has many historic and cultural relics, traditional handicrafts and foods which fully demonstrate our unique culture. Like many people in Hong Kong, I am disheartened to see that the unitary development of our tourism industry has turned Hong Kong, from a metropolitan where East meets West with integration of Chinese and Western cultures, to a place flooded with Mainlanders and wherever we go, we only hear people speaking Putonghua. This is by no means a healthy development for the tourism industry.

Chairman, on behalf of the Neo Democrats, I propose to deduct the estimated expenditure for the HKTB to promote Hong Kong in the Mainland for the whole year, and I urge the Government to allocate more resources to promote Hong Kong's tourism industry in the international market, so that we can receive people from various parts of the world. In order to attain a truly healthy and balanced development of our tourism industry, it should be diversified rather than Mainlandized.

Chairman, I so submit.

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MR SIN CHUNG-KAI (in Cantonese): Chairman, I would also like to speak on my amendment, that is, Amendment No 900 to reduce head 152 by $3,380,000, which is equivalent to the annual estimated expenditure on emoluments for the Secretary for Commerce and Economic Development. Chairman, the main purpose of my amendment is, as I said, to reduce the emoluments of Secretary Gregory SO for a whole year. The reason is simple enough. He has failed to perform satisfactorily in the major areas of work under his purview.

First, regarding the free television licensing incident, as Members may understand, the authorities owe the public an explanation. The Government has earlier decided that a gradual and orderly approach should be adopted in introducing competition into the free television market and it thus refused to approve all three applications for free television programme service licences. As Members may understand, many members of the public have held grievances since last year because when they return home after work, they cannot even choose a television channel which they like. Secretary Gregory SO and Chief Executive LEUNG Chun-ying have used the rule of confidentiality of the Executive Council as a shield for refusing to explain to the public why the Hong Kong Television Network Limited (HKTVN) had not been granted the licence. They only said that "a basket of" factors were involved without giving any further explanation. Actually, I think "one single man" has seriously jeopardized the interests of the people of Hong Kong.

According to the Legislative Council Brief on the Broadcasting Bill which was examined by the Legislative Council in 2000 (I was also involved in the drafting of the Bill), the main purpose of the Bill was to further advance the broadcasting policy objectives of the Government, namely, to widen programming choice to cater for the diversified tastes and interests of the community; encourage investment, innovation and technology transfer in the broadcasting industry; ensure fair and effective competition in the provision of broadcasting services; ensure that broadcasting services provided are up to the expectations and do not offend the tastes and decency of the community; and promote the development of Hong Kong as a regional broadcasting and communications hub.

The way the Government handled the television licensing incident ran contrary to the abovementioned broadcasting policy objectives. The Government said that it hoped to widen programming choice of the community, 11920 LEGISLATIVE COUNCIL ─ 22 May 2014 but what choices of free television channels are there for the public? Although Hong Kong is considered the freest economy in the world, there has been a lack of competition in the market of free television programme service over a long time. As a result, the television industry in Hong Kong is dominated by one television station and the quality of its programmes has been deteriorating. The public should have choices but they do not. They only have the choices between watching and not watching television. It is even more ridiculous that a television station has kept broadcasting its old programmes. As the saying goes, it has been "rehashing the same old stuff" to the audience time and again. However, under the current legislation, no provisions can be made to regulate repeated broadcast of old television programmes. The television stations are therefore emboldened to repeat this practice and the airwaves, which are one of our precious public resources, have thus been wasted.

The television licensing issue is a matter which involves vital public interest. As the Director of Bureau responsible for this policy, Gregory SO has chosen not to disclose the deliberations of the Executive Council and refuse to let the public know why the Government has cherry-picked two out of the three applicants to grant them licences and whether that decision is in the public interest.

In fact, Ms Jenny NG, who is responsible for preparing the consultancy reports on free television licences, had accused the Government of incomprehensively citing the reports out of context. She described the Government's approach as tantamount to "race fixing" in that it had added new assessment criteria after the applicants submitted their applications. In addition, she said that the consultancy firm did not know that the Government intended to cherry-pick two out of three and if it did, it would not have drafted the reports in the same way. As Gregory SO has not dispelled the doubts of the public, he gave people the impression that the licence was not granted to HKTVN because of political factors.

The television licensing incident has surely made investors think that the business environment of Hong Kong is a lot worse than before. In making business decisions, business owners have to consider not only legislative requirements, but also political factors. The Government has left investors in perplexity by "moving the goal-posts" time and again.

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According to the World Competitiveness Yearbook 2014 recently published by the Swiss-based International Institute for Management Development (IMD), Hong Kong ranked fourth in terms of competitiveness, which is one rank lower than last year and also our lowest ranking recorded over the last 10 years. On the other hand, our main competitor has beaten us again after 2010 and ranked third, which is two ranks higher than last year.

The yearbook of the IMD defines competitiveness as the ability of a country or region to create added value. There are eight major assessment criteria which includes economic performance, internationalization, government efficiency, finance, infrastructure, business management, technological performance, as well as talents and standard of living. In respect of government efficiency, our ranking in the sub-factor of institutional framework has dropped from third to eighth. This shows that the low acceptability of the Government and the lack of co-operation among government departments have weakened the competitiveness of Hong Kong. In order to create a good business environment for Hong Kong, we need an election system with no screening and a high acceptability of the Government which are the most important factors.

In addition, we have to pay attention to our technological performance. According to Bloomberg's global innovation ranking published early this year, Hong Kong ranked 27th, which was far behind South Korea which ranked first and Singapore which ranked seventh. Hong Kong lagged far behind the others in terms of its development in creative industries and export of hi-tech products because it has focused only on four key industries all along. They are financial services, trading and logistics, professional and producer services and tourism. The lack of diversification in our industries and the sluggish development of our creative industries vis-à-vis our neighbouring countries are weaknesses in our economic development which we should not neglect.

The drop in the competitiveness ranking of Hong Kong has sounded an alarm in respect of our economic development. In addition, our population is rapidly ageing. To resolve the problems, the Government should change its mindset and strongly support the development of creative industries through formulating policies to enable Hong Kong to develop into a knowledge-based economy. If it fails to do so, the competitiveness of Hong Kong will drop even further in future to a point which Hong Kong lags far behind its neighbours and loses its current economic status in the region.

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Chairman, we are certainly aware that the Chief Executive discussed the subject of Hong Kong's competitiveness in this Council this morning, but Members can see for themselves that he is saying one thing and doing another. While claiming that he encourages competition, he has only issued two television licences instead of three and discouraged competition.

To maintain the competitiveness of Hong Kong, it is crucial to monitor the Government and the role of the media as the Fourth Estate is most important. However, the Government has intervened more and more with the media and the public service broadcaster recently. The Radio Television Hong Kong (RTHK), being a public service broadcaster, has been subjected to unprecedented intervention. The Government has appointed an Administration Officer as the Director of Broadcasting, resulting in the situation of a layman leading the professionals. Actually there are two laymen, the Director of Broadcasting and the Deputy Director of Broadcasting. Both of them are Administration Officers whose mentality and professional knowledge are totally different from those of media workers. Some time ago, Director of Broadcasting Roy TANG was accused of repeatedly intervening with the programme production of RTHK. For example, he asked the production team of "Headliner" to set out the development of ideas in a chronological order, and he also proposed to broadcast the programmes of "Headliner" and "Hong Kong Connection" in the channels of Asia Television Limited. Such actions have given the public an impression that freedom of the press has been seriously jeopardized. According to the Press Freedom Index published last month by the Hong Kong Journalists Association for the first time, the public gave press freedom a rating of 49.4 which is actually the lowest level since the reunification in 1997.

Recently, there is a new relocation plan for RTHK, for which Secretary Gregory SO may also be responsible. The Government intends to purchase sophisticated broadcasting and production facilities for RTHK to perform its role as the public service broadcaster of Hong Kong. With the development in digital technology and increasing public expectation of RTHK, there is an urgent need for RTHK to enhance its services provided on digital and new media platforms. Although RTHK has commenced digital broadcasting through three channels (31, 32 and 33), only few programmes are available. However, surprisingly, the Democratic Alliance for the Betterment and Progress of Hong Kong (DAB) has turned into the opposition camp on the funding proposal for LEGISLATIVE COUNCIL ─ 22 May 2014 11923 constructing the New Broadcasting House for RTHK in Tseung Kwan O. Gregory SO did not make all-out effort to get Members' support, and when the funding application was rejected, he did not resubmit the proposal and eventually, the Government withdrew the proposal altogether. As the Government withdrew the funding proposal on the pretext of failing to get sufficient votes, it is doubtful whether the Government actually intends to "starve" RTHK to death. After withdrawing the funding proposal, the Policy Bureau has decided to conduct a new tender exercise instead of trying harder to solicit Members' support and explain to the public how the funding will be used to address the concern of high construction costs. Launching a new tender exercise will not only delay the completion of the project by at least two years, the costs involved may also increase as construction costs rise year by year. The approach may not result in any reduction of costs after all. Taking inflation and the possible increase in the costs of construction materials and labour into consideration, the costs may even be higher after two years.

According to the information given in RTHK's website, the vision of RTHK is to be a leading public broadcaster in the new media environment. However, as we all know, it has been about 40 years since the three RTHK premises along Broadcast Drive commenced service in 1969, 1971 and 1975. The facilities of the premises are too old to meet the demands of advanced digital terrestrial television broadcasting in a digital era. Therefore, the Policy Bureau has the responsibility to explain to the public instead of withdrawing the funding proposal and launching a new tender exercise.

Recently, the Individual Visit Scheme (IVS) has stirred up much trouble in Hong Kong. We have noticed that the Secretary's recent remarks about the uncivilized behaviour of some IVS visitors have created an uproar. Some time ago, the incident of a two-year-old boy defecating on a street in Mong Kok had instigated Hong Kong-Mainland conflicts, but Gregory SO responded by saying that "Hong Kong people should be more tolerant". This shows that he has completely ignored the fact that an excessive number of IVS visitors has imposed a heavy burden on our community as well as the public transport facilities. Gregory SO has completely failed to discharge his responsibilities and has not conducted any comprehensive and prospective evaluation on the increasing number of visitors. I know that the Government has prepared a report, but it has underestimated the number of visitors. The report estimated that the number of visitors would exceed 70 million in 2017, but my estimate is that the number will 11924 LEGISLATIVE COUNCIL ─ 22 May 2014 already exceed 60 million this year and by 2016, the number will be close to 70 million. Our tourism facilities, immigration facilities at border control points and public transportation services are not adequate to meet the current demand of the visitors. Secretary Gregory SO is certainly not alone in making careless remarks, he is also joined by Executive Council Member CHEUNG Chi-kong. CHEUNG said that traffic jams in the MTR or other public transport services are caused by an increased working population resulted from the improved economic situation in Hong Kong. After he made the remarks, people have produced data which clearly shows that the increase in the number of MTR passengers since 2007 is proportionate with the rise in the number of IVS visitors. This shows that the Chief Executive has been listening to shallow advice. People make wrong remarks or they speak carelessly, attracting correction by members of the public.

To resolve the problem of having an excessive number of visitors in shopping areas, the Democratic Party thinks that the Government should develop new tourist spots, cultural tourism and ecotourism to divert visitors to different areas. In addition, the Government should enhance the structure of visitors instead of pursuing growth in numbers only. On this point, it is most disappointing that the Secretary only woke up from his dream and said that the Government would communicate with the Central Authorities with a view to adjusting the number and structure of visitors after Mr ZHANG Dejiang, Chairman of the Standing Committee of the National People's Congress has requested the Hong Kong and Macau Affairs Office of the State Council and the China National Tourism Administration to look into the capacity of Hong Kong in receiving visitors. This shows that the Secretary is slow and he lacks foresight.

Chairman, I think I cannot … finish the last part of my speech, but I may make use of another opportunity to do so. I only want to mention one last point. I appreciate the efforts made by the Legislative Council Secretariat in preparing the Research Brief on the Individual Visit Scheme which Mr Gary FAN mentioned earlier. The document pointed out that the consumption pattern of IVS visitors has completely changed the retail landscape of Hong Kong. I believe the Government should deepen its understanding in this area and I will try to make use of another opportunity to speak later.

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MS CYD HO (in Cantonese): Chairman, my amendment reads "Resolved that head 160 be reduced by $2,296,800 in respect of subhead 000". This amount is equivalent to the estimated expenditure on the emoluments for the Director of Broadcasting and head of the Radio Television Hong Kong (RTHK) for a whole year.

I do not agree that an Administrative Officer should be parachuted into RTHK to take up the position of the Director of Broadcasting. The incumbent Director of Broadcasting Roy TANG studied law and has worked as an Administrative Officer for many years. It was reported by the media that at the time he assumed the post of the Director of Broadcasting, he owned assets worth over a hundred million dollars through property speculation. In other words, he is considered a "smart guy" as defined by the people of Hong Kong. However, he does not have any knowledge of the media or news reporting. When he first took up the job, he had no idea about the different radio and television programming schedule, and he even mixed up the programmes of different channels. Therefore, he is not eligible to be the chief editor of RTHK.

Roy TANG is not the first Administrative Officer parachuted into RTHK, Gracie FOO and Gordon LEUNG were his predecessors, but why do I direct against Roy TANG? I had not proposed to deduct the expenditure on the annual emoluments for Gracie FOO and Gordon LEUNG because they basically respected the principle of editorial independence and autonomy of the media. As Members may recall, the parachuting of an Administrative Officer into RTHK began after the Audit Commission and the Independent Commission Against Corruption found impropriety in RTHK's accounting procedures and recommended to create an Administrative Officer post in RTHK to enhance the procedures. However, the bureaucratic structure and procedures of government departments are actually inappropriate for a media organization.

Both Gracie FOO and Gordon LEUNG were responsible for operational matters such as accounting and funding proposals. The administrative procedures that they adopted might have delayed urgent reporting work in overseas countries, but they had not blatantly interfered with editorial autonomy. However, Roy TANG has undertaken a lot of political work and one obvious example is his dismissal of NG Chi-sum immediately after he took charge. NG Chi-sum has been a programme host of RTHK for many years, but his contract 11926 LEGISLATIVE COUNCIL ─ 22 May 2014 was terminated once Roy TANG took charge. Besides, Robert CHOW Yung was also fired and victimized. Chairman, the incident happened two or three years ago and I now talk about what happened this year.

This year, the most recent and annoying incident involving Roy TANG was the production of the Producers' Guidelines (the Guidelines). A working committee which comprises more than 20 staff members from different departments of RTHK proposed to include a statement in the Guidelines to the effect of safeguarding freedom of expression and promoting an open and democratic society, but the proposal was rejected. Let me give a brief description of the Guidelines. I am holding a copy of the version in 2000 signed by CHU Pui-hing, former Director of Broadcasting. I will read out one paragraph to give Members an idea of the nature of the Guidelines. The paragraph on due impartiality reads, "Due impartiality also does not require absolute neutrality on every issue of public concern or detachment from such fundamental principles as freedom, human rights, democracy, and the rule of law ― principles which are essential to a just and open society. We will be failing in our duty if in the attempt to upset no-one, to disturb no institution, we limit the comprehensiveness and open examination of issues and events". In addition, "Impartiality does not require programme-makers to be unquestioning, or for RTHK to give all sides of an issue the same amount of time". In other words, a programme-maker can have his or her own stance, but he or she should apply the same assessment criteria to everyone as a professional media worker, regardless of whether he or she holds a conservative or progressive view. That is what we mean by the principle of impartiality upheld by the media which does not mean detachment from any values.

What do staff members of RTHK wish to include in the Guidelines? They wish to include the paragraph of "We promote freedom of expression, open and democratic society, civic participation and a caring community. We also pledge to serve the people, produce quality programmes, nurture talent, monitor any infringement of public interest, and retain the trust that the community has placed in us". However, at a meeting of senior staff members, Roy TANG proposed to delete the paragraph and the proposal was unfortunately passed by the majority of the attendants of the meeting. Therefore, the problem does not involve Roy TANG alone, but also those in the senior management of RTHK who have already succumbed to those in power. The only three staff members who opposed the deletion were CHAN Man-kuen, SZE Wing-yuen and one other LEGISLATIVE COUNCIL ─ 22 May 2014 11927 person. Who were the ones who supported the deletion? Members may find out the answer themselves.

To professional media workers, the paragraph deleted by Roy TANG describes their bounden duties, which is a matter of fact. What are the reasons for the deletion? According to Roy TANG, there are already similar provisions in the Charter signed with the Government, but he is wrong. Which paragraph did he quote? I have to read it out too. RTHK is to "provide a platform for the Government and the community to discuss public policies and express views thereon without fear or favour". In fact, this line only means that RTHK is responsible to provide a platform for the public or for everyone to express their views. It is totally different from the guidelines to remind staff members that they should aspire to improve their performance so as to speak up for people in a more professional manner. Surprisingly, Roy TANG thought that the words in the Charter signed with the Government could replace the proposed paragraph which had been prepared by staff members of various departments of RTHK after an extended period of drafting and discussion. Nevertheless, the proposal to include the said paragraph was negatived at the meeting of the senior management. This shows that the senior management of RTHK headed by Roy TANG is not concerned about retaining the trust that the community has placed in RTHK.

In fact, the prime concern of the chief editor of RTHK is to enhance the credibility of the media organization to which he belongs. How could he stop his staff members from improving their performance on a voluntary basis? By doing so, he has stopped RTHK from restoring its credibility to its previous level. In fact, since Roy TANG became the chief editor, the credibility of RTHK has plunged.

According to the paragraph I just read out, a programme host of RTHK can have his or her own opinions, but should treat everyone equally. However, what are the phone-in programmes of RTHK like nowadays? They are like unmanned cars and the programme host only acts like traffic lights. The callers speak one after the other without any debate or confrontation. This manner of hosting programme is not conducive to discussion in our community. A programme host has to play the role of a devil's advocate from time to time by raising an opposite view to facilitate discussion even if he or she does not support the view. However, this tactic is seldom used in the programmes of RTHK now.

11928 LEGISLATIVE COUNCIL ─ 22 May 2014

Chairman, another reason why I consider that Roy TANG should no longer stay in the position as the Director of Broadcasting is related to the proposed construction of the New Broadcasting House for RTHK. The estimated cost of the project was $1.5 billion in 2000 and soared to $6.05 billion in 2014, which is a shocking four-fold increase. One reason for the increase in cost is that a number of facilities will be provided in the New Broadcasting House, including those for digital television broadcasting. Considering the conditions of the existing premises, there are problems of water seepage and rats. Besides, the desks of staff members, be they programme hosts, editors or reporters, are even smaller than this desk in the Chamber. Of course, since computers are provided, it is not necessary to have big work areas. However, apart from handling electronic records, staff members need some space to place printed documents. If their work areas are too small and crowded, it will be difficult for them to work. According to a document provided by the Government, and Secretary HUI may remember, the existing premises were built 40 years ago and many maintenance and refurbishment projects cannot practically be carried out to improve the conditions. Therefore, the Director of Broadcasting has the responsibility to promote the funding proposal and solicit support from Members of all parties and affiliations so that the proposal can be passed smoothly.

Furthermore, the construction of the New Broadcasting House will not merely improve the current operation of RTHK, the entire community will also be benefited. RTHK has many media assets, which include old records either in the form of photographs and audio tapes. It has kept very valuable records of the Governor delivering his speech through the radio after World War II. But where are these records kept now? They are kept in a humid and crowded room opposite RTHK's canteen which is open to the public. It is possible that these records may have been damaged. If these media assets are to be archived, more space is needed in the New Broadcasting House to keep them properly.

Furthermore, if the abovementioned information is to be digitized, the information technology system has to be upgraded. If the existing premises are to remain in operation, an annual expenditure of $200 million will be incurred for keeping the digitized information with the contractor. With the completion of the New Broadcasting House, an area of 162 sq m will be sufficient to keep the digitized information and $200 million will be saved each year. Secretary, you should be involved, your work portfolio also include this area of work. LEGISLATIVE COUNCIL ─ 22 May 2014 11929

However, it is obvious that the Director of Broadcasting has not made his best effort. What is the result? The funding proposal was negatived. Secretary Gregory SO knew that I was concerned about the matter and he said to me the other day that some improvement measures would be made in the carpark. Before he told me, I already knew that they would place a few more containers there. In fact, the office of the Putonghua Channel of RTHK is in a container. Chairman, I believe you have also been there. It is a temporary structure placed in the residential area nearby. The entire team of the Putonghua Channel works in the temporary structure and they cannot be accommodated in the main premises.

Besides, at RTHK's main entrance at Broadcast Drive, one can see three containers, two of which are stacked up. For the so-called improvement measures, does it mean stacking up five or six containers, as in a container yard, to accommodate the staff members? First of all, the working environment will certainly be undesirable. Second, as the existing RTHK premises are situated in urban area where transportation is very convenient, it will be a suitable place for providing tertiary education facilities. Even if the worst comes to the worst and the Government will auction the land for luxurious residential development, I think it is still "worthwhile" for the Government to proceed with the construction project. Why do the Director of Broadcasting and the Secretary for Commerce and Economic Development not try their best to solicit Members' support?

Chairman, my third point is that Roy TANG has not appointed the right person for the job. When he sought funding for the New Broadcasting House, he requested to create a supernumerary post at D3 rank for five years. What is the duty involved? The person appointed will monitor the works of the New Broadcasting House, including the works to install recording and digital television facilities and equipment, and handle contract negotiations. However, the proposed D3 post will not be filled by internal promotion from the engineering division of RTHK, but by an Administrative Officer. This arrangement will not only create a problem of having a layman to lead the professionals, but a layman will actually be doing the work of the professionals. Being the Director of Broadcasting and the chief editor, Roy TANG has made completely inappropriate decisions. Of course, as the funding proposal for the New Broadcasting House was not passed, the D3 post will not be created in May because it serves any purpose.

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Chairman, these three matters mentioned by me are only the more important ones, but they show that Roy TANG is not qualified to be Director of Broadcasting. Therefore, I have to propose an amendment to deduct his salary for a year.

Thank you, Chairman.

CHAIRMAN (in Cantonese): Does any Member wish to speak on these amendments?

MR CHAN CHI-CHUEN (in Cantonese): Chairman, there are only five Members in the Chamber; there are, literally, a "handful" of people. Please do a headcount.

CHAIRMAN (in Cantonese): Will the Clerk please ring the bell to summon Members back to the Chamber.

(After the summoning bell had been rung, a number of Members returned to the Chamber)

CHAIRMAN (in Cantonese): Mr CHAN Chi-chuen, please continue.

MR CHAN CHI-CHUEN (in Cantonese): Chairman, before I continue to talk about the Civil Aviation Department, I would like to respond to Amendment No 1019 mentioned by Ms Cyd HO just now. The amendment seeks to reduce the expenditure on the emoluments for the Director of Broadcasting and head of RTHK for a whole year, which amounts to $2,296,800. I strongly support the amendment.

Although an Administrative Officer should be an all-rounder who can do a variety of work and can be posted in different government departments, RTHK is definitely different from other government departments. Therefore, we have repeatedly reminded the Government that it should not "parachute" an Administrative Officer to act as the Director of Broadcasting. Certainly, such an LEGISLATIVE COUNCIL ─ 22 May 2014 11931 arrangement has been made in the past, but Roy TANG is a special case. Recently, in a ceremony to honour RTHK's performance in the TV Programmes Appreciation Index Survey, most of the attending guests agreed to wear a blue ribbon distributed by staff members of RTHK. What does the blue ribbon stand for? It stands for press freedom and freedom of speech which are universal values beyond dispute. However, the Director of Broadcasting refused to wear a blue ribbon, a symbol for press freedom and freedom of speech, and such a refusal has a symbolic meaning. On a practical level, the Director of Broadcasting refused to include words such as "promote freedom of expression", and "democratic society" in the Producers' Guidelines of RTHK (the Guidelines) some time ago. However, I believe it would not be very helpful to include those words in the Guidelines anyway because such statements of universal values can be interpreted in various ways. It is fundamentally a power game in which those in power can interpret things as they please and a "democratic society" can be interpreted in a way they see fit. Nevertheless, Roy TANG even refused to make a window-dressing effort to include those words in the Guidelines.

The above incident can reflect how much Roy TANG rejects freedom of speech. I believe he really considers that freedom of speech should not be given at all. The Hong Kong Journalists Association found it unbearable and issued a statement saying that deletion of phrases such as "promote freedom of expression" from the Guidelines was tantamount to an act of self-censorship and the scrapping of diversity of voices and it asked the RTHK management to adopt a high degree of transparency in reviewing the Guidelines and ensure that freedom of expression and press freedom remain sacrosanct. Roy TANG's response was, as usual, perfunctory. He said that every amendment of the Guidelines had to go through certain procedures ― similar to the bureaucratic reply provided by the Government to Members' oral questions ― the relevant stakeholders had to be consulted and the values which had to be upheld by RTHK as the public service broadcaster were already stated in its Charter. However, Ms Cyd HO has just revealed to us that it is not the case.

It is easy to judge whether Roy TANG's salary should be deducted. One only needs to consider the situation of RTHK with the following simple criteria: Since Roy TANG assumed office, has RTHK changed for the better or the worse? Can RTHK's programmes attract a higher or lower number of listeners? Has the operation of RTHK been smooth or difficult? Do staff have a higher or lower morale? I think we can form a judgment using these criteria. As Members may know, the Director of Broadcasting has not performed his functions 11932 LEGISLATIVE COUNCIL ─ 22 May 2014 effectively. Actually, since he does not possess the requisite knowledge, he may as well do nothing and that would be even better. However, if an ignorant person strains himself to exercise his powers, things will only get worse.

We can consider deducting his salary for a whole year, or for six months as proposed in Mr LEUNG Kwok-hung's amendment. I do not know what is the intention of Mr LEUNG Kwok-hung in proposing Amendment No 1020 which seeks to deduct the salary of the Director of Broadcasting for six months. Perhaps he is offering Members a moderate option. Although he hates Roy TANG, he considers it unnecessary to deduct his salary for a whole year and it will suffice to deduct his salary for six months. Is Mr LEUNG Kwok-hung being lenient with the Director of Broadcasting? Or does he think that the Director will take up less work after deducting his salary for six months? If he does less work, he will make fewer mistakes; if he does no work at all, he will make no mistakes. If Roy TANG goes to work without working, there will be peace in RTHK.

Why does Roy TANG reject press freedom and freedom of speech, why is he so unwilling to accept the expressions "promote freedom of expression" and "democratic society"? Actually, his boss LEUNG Chun-ying signed the press freedom charter when he ran for the election and he promised to safeguard press freedom and promote freedom of information. Of course, like other pledges made in his election manifesto or verbal commitments made during his visits to the districts, he regards words said as actions taken after he becomes the Chief Executive. Therefore, although we have noticed a continuous fall in the press freedom index over the past year, LEUNG Chun-ying has not come forward to say what work should be done in this respect. We cannot expect him to do anything to promote press freedom because he is actually an accomplice to restrict press freedom.

One of the four main political missions of LEUNG Chun-ying is to rationalize RTHK and the Director of Broadcasting Roy TANG is the main official deployed to carry out this political mission. As Members may recall, the RTHK Programme Staff Union held a demonstration some time ago, opposing the parachuting of an AO so as to keep RTHK intact. The demonstrators pointed out that mistakes made by Roy TANG were "too numerous to count". Such words are now often used to criticize public officials. For example, Roy TANG criticized the production team for putting "empty chairs" at the City LEGISLATIVE COUNCIL ─ 22 May 2014 11933

Forum, he aborted the programme "LegCo Review" and rescheduled "Headliner". RTHK staff thus query his professional judgment and ability, and they even suspect that he has a hidden political intention to "dry up" RTHK.

In fact, Roy TANG should not get paid, either due to his incompetence or his lack of professional capacity, or due to his intention to "dry up" RTHK. Members may recall that the Legislative Council Panel on Information Technology and Broadcasting had once discussed the issue of RTHK's editorial independence. The origin of the dispute was that SZE Wing-yuen, the Acting Assistant Director of Broadcasting, did not get promoted because he was unwilling to give an account of his thinking process and carry out the political mission. Staff of RTHK regarded the incident an infringement on editorial independence and the situation was getting worse. Although a motion was passed by the Panel on Information Technology and Broadcasting, it serves no purpose as such motion would not be passed by the House Committee and the Council.

After Roy TANG, an Administrative Officer, became the Director of Broadcasting, he castrated RTHK's editorial independence. This comment is not made by us. I have to quote the words of a heavy-weight to convince the public. When Miss CHEUNG Man-yee, who had been the Director of Broadcasting for 13 years, returned to RTHK to discuss with staff the meaning of editorial independence, she pointed out that the arrangement to broadcast "Headliner" in Asia Television Limited instead and the "empty chair" incident at City Forum were signs that RTHK had entered a critical stage in respect of editorial independence. The situation can only turn worse and not better. As the head of a broadcasting organization, he should possess professional knowledge. "Madam CHEUNG" said, "Media work cannot be learnt instantly no matter how smart you are …" and after praising Roy TANG, she continued, "after you joined RTHK, you cannot possibly know the next day what the principles of news reporting are, or how to handle editorial matters or make professional judgment". In her view, communication among all staff of RTHK should be enhanced. It is most important to cater for the needs of the community, and one should not be so narrow-minded. What Hong Kong needs most is a liberal environment for the media and increasingly restrictions are unwarranted. People should be given a sufficient amount of freedom to carry out their work.

11934 LEGISLATIVE COUNCIL ─ 22 May 2014

The RTHK Programme Staff Union criticized Roy TANG for forcing SZE Wing-yuen to "kneel down". Owing to his professional experience and his adherence to the principles of public broadcasting, SZE was unwilling to make this decision and was subsequently demoted. That is indeed unacceptable.

Finally, concerning the cost overrun of the proposed New Broadcasting House for RTHK, the Legislative Council was also involved in the incident. It seemed to us that Roy TANG, either he was incapable of getting the work done or he intentionally did not want to get the work done. I remember we made severe criticism against the cost overrun of the proposed New Broadcasting House for RTHK at the meetings of the Panel on Information Technology and Broadcasting, a practice we would adopt in every case of cost overrun. However, we may have fallen into the trap set by the Government because it actually wants to "dry up" RTHK. Actually, for some important funding applications, if approval cannot be secured, the responsible officer, such as the Director of Broadcasting in the case of RTHK's application, would be regarded as having made a serious mistake, even if he is not dismissed, he may be demoted or have his salary deducted. Therefore, regarding the withdrawal of the funding proposal for RTHK, while some may say that Roy TANG has failed to carry out his duties, some conspiracy theorists may say that he has fulfilled his political duties, that is, to "dry up" RTHK indirectly. Since Members criticized the cost overrun, he might as well withdraw the proposal. After the proposal was withdrawn, some Members and staff of RTHK had to persuade the Government not to withdraw the proposal but to resubmit it because, after counting the votes, there might be enough votes in support of the proposal. However, both Secretary Gregory SO, whom I will not reprimand in this session, and Roy TANG said that the Government had decided to withdraw the proposal.

(THE CHAIRMAN'S DEPUTY, MR ANDREW LEUNG, took the Chair)

As pointed out by Ms Cyd HO, despite the cost overrun, the piece of land at Broadcast Drive can be released. If this piece of land is put up for auction, either for constructing residential units, luxurious apartments, schools, and so on, the opportunity costs incurred and the possible benefits to the community have to be taken into account. Shouldn't the Government resubmit the proposal to the Legislative Council at the first opportunity? But it did not. The Government simply gave up. Since Members opposed to the proposal, it would not proceed LEGISLATIVE COUNCIL ─ 22 May 2014 11935 with it. Roy TANG should take the blame. Has the Government withdrawn the proposal for the extension of a landfill and the construction of an incinerator despite Members' opposition? The Government has also not withdrawn the proposal to provide funding for the preliminary works of the North East New Territories Development projects despite Members' opposition. For a proposal which the Government may get a sufficient number of votes, why did it not try its luck? The Government has tried to push many proposals through in the Finance Committee even if they have been rejected by the panels of the Legislative Council, why the case of RTHK was handled differently?

My conclusion is that there is a conspiracy. I will not talk about Roy TANG any more. The three amendments including No 1018 and No 1019 proposed by Ms Cyd HO and Mr LEUNG Kwok-hung respectively are similar in that they propose to deduct the salary of Roy TANG for a whole year. The Director receives an annual emoluments of $2,296,800. If you think it is still worthwhile to keep Roy TANG in this post, you can deduct half of his salary, so that he will do less work which is beneficial in a way. Otherwise, if SHIU Sin-por is to become the Director of Broadcasting, it will be even worse. RTHK will then become "a five-star broadcaster" and the situation will be disastrous. In that case, you can support Amendment No 1020 proposed by Mr LEUNG Kwok-hung to deduct Roy TANG's salary for six months which amounts to $1,211,700. Later, I will talk about Roy TANG's boss, Secretary for Commerce and Economic Development. I will continue to hold him accountable which will be the main point of this joint debate. In fact, there are problems with the accounts of RTHK and if we inquire further, not only should Roy TANG be held responsible, Gregory SO can hardly absolve himself of the blame. However, I will talk about that later. Thank you, Deputy Chairman.

DEPUTY CHAIRMAN (in Cantonese): Does any other Member wish to speak?

MR ALBERT CHAN (in Cantonese): Deputy Chairman, Mr CHAN Chi-chuen just said he would talk about the Secretary for Commerce and Economic Development later, but I have to overtake him because I have proposed Amendment No 898. It is interesting to note that the number of the amendment is "898" and not "689", but it seems that the numbers "8" and "9" are involved with government officials. The amendment in question seeks to reduce 11936 LEGISLATIVE COUNCIL ─ 22 May 2014 head 152 by $3,380,000, which is equivalent to the estimated expenditure on the emoluments for the Secretary for Commerce and Economic Development for a whole year. In other words, he will not be paid any salary, which implies that he should resign.

Speaking of Gregory SO, many members of the public do not know who he is, but if you say "Secretary Name Card", people will surely know who he is. The incident clearly reflected the mentality of these political upstarts and how they have abused their power. Gregory SO has disregarded the importance of the rule of law and procedural justice, thinking that he could ride roughshod when he was in a powerful position. Frankly speaking, he should resign just because of this incident because he showed disrespect for government policies and acted unfairly towards other civil servants, thinking that he could act against the law just by presenting his name card.

Deputy Chairman, why do I have to propose this amendment? Since the Secretary's assumption of office, I do not have a good impression of him because basically, I do not know what he has done in the areas of economic development or commerce. Of course, he is a lawyer by profession and in the United States, the President, many senior officials or state governors are also lawyers, and before they take up the high position, they have engaged in public administration for a long time. The biggest problem of the "689" governing team is that before the Directors of Bureaux, Under Secretaries and Political Assistants or consultants assumed their positions, they had no previous experience in public administration at all. As far as promotion is concerned, for those who have connections with "689", with political parties or with the Liaison Office of the Central People's Government in the HKSAR, or those who are members of certain privileged groups, they will be promoted quickly to positions in charge of policy implementation even if they lack the ability or experience required. That will certainly be disastrous to the Policy Bureaux and Hong Kong. This "Secretary Name Card" is no exception. When he first assumed office, he had a rather good popularity rating, but the rating keeps dropping afterwards. His net popularity has dropped to negative 10 percentage points as at 5 to 8 May this year and so he is another "negative asset". Of course, this "negative asset" is still a little better than Secretary Paul CHAN who once operated "sub-divided units". With such a rating, Gregory SO should really resign. I believe his popularity rating will drop further in future public opinion surveys.

LEGISLATIVE COUNCIL ─ 22 May 2014 11937

Deputy Chairman, why do I have such a projection and comment? Basically, his handling of matters can well illustrate his capability, not to mention his political wisdom. He does not even have some common sense, and the name card incident is a case in point. In handling the two recent issues concerning the problem of visitors under the Individual Visit Scheme (IVS) and the problem of visitors urinating and defecating on the street, his attitude, judgment and analysis have reflected his lack of basic knowledge. Will the appointment of a person without general knowledge as a Director of Bureau bring disaster to the Policy Bureau and shame to Hong Kong? Therefore, I am really worried when he attends some international conferences overseas, fearing that he will act like LEUNG Chun-ying who wore a stupid smile before the President of the Philippines to cover up his embarrassment, which in fact further revealed his stupidity.

Regarding the cases of IVS visitors urinating and defecating on the street, I believe people of Hong Kong are well aware of such cases. In March this year, video clips of children of IVS visitors urinating and defecating on the street under the company of their parents had gone viral on the Internet, and sparked heated discussion and criticism on the Internet. People accused Mainland visitors of not disrespecting the way of life of Hong Kong. Perhaps they used to such behaviour in the Mainland, but in Hong Kong, people have a different way of life and they attach great importance to environmental hygiene. There is an increasingly strong sense of resentment of Hong Kong people against IVS visitors for such uncivilized behaviour which occur time and again. Of course, there are other reasons why members of the public reject IVS visitors, but I will talk about that later.

People of Hong Kong generally cannot tolerate visitors urinating and defecating on the street. That is their feeling. Certainly, the Democratic Alliance for the Betterment and Progress of Hong Kong (DAB) has a unique point of view, similar to that of Secretary Gregory SO. Perhaps that is because the Secretary was a senior member of the DAB before he became a public officer and they consider that the act of IVS visitors urinating and defecating in Hong Kong is tolerable and acceptable.

If such words are said in private, we cannot raise any comment. However, Gregory SO openly censured Hong Kong people for being intolerant 11938 LEGISLATIVE COUNCIL ─ 22 May 2014 and asked them to be more tolerant and understanding, so as to foster harmony. Buddy, why did he not censure those people for damaging the environment and ask them to stop such behaviour? How could he ask us to foster harmony instead? While we said that the visitors have damaged our environment, the Secretary said that we have undermined the harmonious relationship and he even went further to say that making emotional remarks would not help to improve the situation. Gregory SO's accusation of the people of Hong Kong is actually an emotional response. He condoned IVS visitors for urinating and defecating on the street because his patriotic sentiment has overridden all other concerns. Whatever belongs to China is great and acceptable. Is that not an emotional statement? That is acting blindly, just like how people reacted during the "Three-anti Campaign" and the "Five-anti Campaign", and how people were more attached to Chairman MAO than their parents during the Cultural Revolution. All in all, everything under the five-star flag would be supported. Is this a kind of emotional reaction? What is emotional? In my view, Gregory SO's blind reaction, his blind patriotism, his affection for the five-star flag and his acceptance of everything under the five-star flag is regarded as truly emotional.

He stressed the importance of tolerance and said that tolerance is the best way to deal with the problem. Later I will criticize him for his double standards. He asked us to treat Mainlanders as VIPs of Hong Kong, but has he treated Hong Kong people as VIPs? The salary which Gregory SO receives is paid by Hong Kong people because it is paid out of the tax revenue. He does not know who his bosses are. He thinks that members of the Chinese Communist Party under the five-star flag are his bosses, does he not? Hence, he asks us to treat Mainlanders, including those who urinate and defecate on the street as VIPs. Naturally, people will be infuriated by this remark.

He told us that we have to tolerate whatever Mainland visitors have done to jeopardize the interests of Hong Kong, and we should not criticize or reprimand them. That is absolutely ridiculous. The people of Hong Kong do enjoy the freedom of speech. Even though Gregory SO said that we have to condone and tolerate Mainland visitors, it does not mean that we have to accept anything which is immoral, unfair, unreasonable, which damages our local environment and jeopardizes Hong Kong's core values. Such core values should be upheld.

LEGISLATIVE COUNCIL ─ 22 May 2014 11939

Therefore, being a Secretary, if he dislikes Hong Kong people's attitude towards the Mainlanders, he should not be a public officer. As a public officer, he should understand the opinions and sentiments of Hong Kong people. He not only fails to grasp public sentiment and has not addressed the grievances of Hong Kong people, he has even caused social division. The words and deeds of this "Secretary Name Card" have further agitated Hong Kong people. The reason for our indignation and dissatisfaction is that he has not, as a government official, provided assistance to us in improving our living environment and striving for our rights. Since our officials have failed to perform their duties and the Government is incapable and biased, the right of voicing our opinions and fighting for our interests has been insulted and trampled on by the "Secretary Name Card". For such an official, it is not over the top to send him some faeces.

Deputy Chairman, someone has given him some faeces, not in person, but send to him by post. What happened then? That is only natural. After hearing what he has said, I have also thought of giving him some faeces when he comes to the Legislative Council in future. Since he likes faeces and urine that much and is so tolerant, I will give him some to see how tolerant he is, or I may even hurl this gift at him. Some time ago, there was a video clip on the Internet and I do not remember whether it was from Australia or New Zealand. Anyway, some local residents hurled faeces at their government officials. A similar incident happened in the Legislative Council many years ago. I think it happened in the 1990s. Some fellow villagers of LAU Wong-fat who were concerned about the rights of residents of the New Territories were involved. Some Yuen Long residents hurled faeces at LEE Wing-tat in the carpark of the old Legislative Council Building. Hence, hurling faeces at people was once popular in Hong Kong. The indigenous residents were brave at that time, but now they oppose the Occupy Central movement.

A member of the public sent him faeces and he reported to the police. How can he talk about tolerance? He asks us to tolerate the act of urinating and defecating on the street, but such behaviour is against the health laws. The Food and Environmental Hygiene Department should arrest the offenders and prosecute them. As an official, he asks us to tolerate those who have breached the law, but when someone sent him faeces, he reported to the police. What standards has he adopted? He is in fact telling us that holders of passports issued by the People's Republic of China can act barbarously and can do whatever they like to damage the environment of Hong Kong. Hence, he asks us to be 11940 LEGISLATIVE COUNCIL ─ 22 May 2014 tolerant and foster harmony. I do not know which member of the public has, in response to the appeal of the Secretary, sent some faeces to him. That person has already given face to the Secretary by not presenting the gift to him in person. The more I talk about these things, the more I am eager to send the Secretary a gift, just like I have given "689" an "honest red bean bun" today. I will give him some "manure-coated grasshoppers" next time.

Therefore, as a Secretary, is he really ridiculous and self-contradictory? How can he talk about tolerance? Since he likes faeces so much, he should eat the faeces sent to him to show us that he is tolerant and broad-minded. Deputy Chairman, how can such an official govern Hong Kong? How can such an official convince Hong Kong people, particularly the grassroots? How can such an official do good to Hong Kong? That is just a very minor problem.

Anyone who has some political wisdom will know that to be a good official, he has to play down, alleviate and resolve conflicts of two confrontational parties, and identify matters of common interest to bring the two parties together. However, he has not done so. After the Hong Kong communists have taken over the rule of Hong Kong, as in the case of TUNG Chee-hwa's governance, a minor problem has turned into a major one and a major problem into a disaster. A minor problem should have been resolved and handled easily, but he has done nothing to help or attempt to help resolve the problem. Instead, he has allowed the problem to become a confrontation between localism camp and IVS visitors and has become more aggravated. His report to the police has created an issue. In any social movement, an issue will turn into a point of contention (The buzzer sounded) … This "Secretary Name Card" has assisted in creating an issue and a point of contention …

DEPUTY CHAIRMAN (in Cantonese): Mr CHAN, your speaking time is up.

(Mr James TIEN stood up)

MR JAMES TIEN (in Cantonese): Sorry, Deputy Chairman, may I request a headcount first.

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DEPUTY CHAIRMAN (in Cantonese): Will the Clerk please ring the bell to summon Members back to the Chamber.

(During the ringing of the summoning bell, THE CHAIRMAN resumed the Chair)

(After the summoning bell had been rung, a number of Members returned to the Chamber)

CHAIRMAN (in Cantonese): Mr James TIEN, please speak.

MR JAMES TIEN (in Cantonese): Chairman, first of all, I would like to apologize to Members. Just now, when I intended to speak, there were only six Members in this Chamber. I requested a headcount, hoping that more Members can listen to my speech. It was not my intention to take a risk in summoning Members back because I understand that the situation will be serious if the meeting has to be aborted due to a lack of quorum.

Chairman, I would like to make a response. Just now, when Mr Gary FAN and Mr Albert CHAN spoke in this session, they pointed out that development in tourism will only bring harm to the tourism industry. That is their personal view and it is one-sided. If such opinions are the only voices heard in this Council, we may be sending a wrong message to our friends in the media or in the Mainland.

As former Chairman of the Hong Kong Tourism Board (HKTB) and incumbent Chairman of the Panel on Economic Development, I have recently obtained information about the data of inbound Mainland visitors in Hong Kong. Recently, there is a slight increase in the number of visitors, but the rate of increase is not as high as it was last year. For example, during the Labour Day Golden Week this year, the increase in the total number of visitors is about 10%, among which only 5% are Mainland visitors, which is much lower than that in the past. In addition, we have also noticed that the retail business turnover generated by visitors has decreased significantly. In particular, the turnover rate of shops selling watches, jewellery and electrical appliances over the last two 11942 LEGISLATIVE COUNCIL ─ 22 May 2014 months has decreased by 20% to 30% as compared with the same period last year. The situation for cosmetics shops is a bit better and there is no significant decrease in their turnover rate. It is our hope that our inbound visitors will improve in terms of quality and quantity, but have the more generous visitors visited Hong Kong less frequently now? We have noticed that direct flights from cities such as Shanghai, Beijing and Guangzhou to many big cities in Europe such as Rome, Paris and London are fully booked every day. Let us do some simple calculation. Suppose people spend 10,000 Euro on air ticket and hotel accommodation, and 50,000 Euro on shopping. After deducting a VAT refund of 17% from the cost of the trip, the trip can be considered as almost free of charge. Therefore, some Mainland visitors with high spending powers will choose to visit other places other than Hong Kong.

Recently, it has also come to our attention that the Government of the United Kingdom has introduced a 24-hour visa service. The Government is probably aware that the United Kingdom is not as competitive as France in attracting overseas visitors because most of the more generous Mainland visitors have chosen to visit France. Therefore, in order to attract visitors and promote tourism, the United Kingdom has changed its practice so that visas can be issued within 24 hours. The target group of this measure is Mainland visitors, hoping that they will visit London for shopping instead of Paris.

Therefore, I think we should not go to extremes in resolving a problem. Both Mr Gary FAN and I are directly-elected Members of the New Territories East geographical constituency. The local residents have indeed lodged many complaints. When I visited Sheung Shui and Fan Ling to hand out gifts to local residents or during my recent visit to the district on Mother's Day, I found that the places were indeed crowded with people and local residents have a lot of grievances. However, may I ask them to consider the matter from another perspective. Many job opportunities have been created in Sheung Shui and Fan Ling as a result of the increasing number of visitors. In the past, many residents had to spend a long time travelling to Tsim Sha Tsui or Central to work every day, which had caused much inconvenience to them. If Tin Shui Wai can attract as many visitors as those in Sheung Shui and Fan Ling, I believe the local residents will benefit, and from the overall and balance perspective, the situation will be better.

While visitors have caused some inconvenience to residents ― I use the word "inconvenience" ― such as congested MTR train compartments and having LEGISLATIVE COUNCIL ─ 22 May 2014 11943 shopping difficulties in some shopping malls, they have also brought economic benefits. By that, I do not mean banks in Central, but the economic development of Sheung Shui and Fan Ling. In addition, the local residents no longer have to take long bus journey to work. I think there are some positive contributions.

Mr Gary FAN has made one-sided comment that the Individual Visit Scheme (IVS) or visitors have only bought negative impacts to Hong Kong. I think clarification is needed on this point. Mr Gary FAN opined that the $40 million-odd spent by the HKTB on promoting Hong Kong to Mainland visitors was too much. However, as I understand, the HKTB has recently spent one third of its funding on long-haul markets in Europe and America, one third on short-haul markets in Southeast Asia and one third on the Mainland market. This ratio has not changed. It has not neglected the other markets by spending more money on promotional work in the Mainland. I have noted that the latest figures provided by the HKTB are very similar to those of the last two years. The several ten million dollars spent on the Mainland market, which accounts for one third of its total funding, is no longer spent on conducting promotional activities in the Guangdong province. The reason is that it is no longer necessary to spend money on promotion in the South China region. The HKTB has been carrying out promotional work in the more distant areas such as Northern China and Eastern China, with a view to attracting more visitors to Hong Kong. No promotional activities have been carried out in the Guangdong province.

From another angle, the promotional work has to take the practical situation into consideration. For example, as the European economy is becoming weaker, many Europeans will not spend their holidays overseas. Since the French do not even have enough money to visit Italy, they will tour around in France and the Italians will spend their holidays in their own country. If we conduct promotional activities in these countries with a view to attracting visitors to Hong Kong, it will be unrealistic to expect any good results for the time being. However, if the same amount of money is spent on promotional activities in the Mainland, the number of visitors will increase. These visitors may behave in a less civilized way and their standards may be lower than other fellow Chinese, but should we discriminate against them only because they are farmers and do not have good taste?

11944 LEGISLATIVE COUNCIL ─ 22 May 2014

Certainly, I do not accept people urinating and defecating on the street, but Mr Albert CHAN has spent at least five minutes out of his 10-minute speech on this point. Though such incidents have occurred, I think Mr CHAN should consider whether the problem is really that serious. According to Mr CHAN's description, visitors urinate and defecate on the street of Hong Kong almost every day. This is not true. Such incidents had indeed been reported in the news, or maybe one or two cases were involved, but in reality, not all Mainland visitors behave like that in Hong Kong.

Some of my friends in Beijing and Shanghai said that they are as decent as the people of Hong Kong and they definitely would not behave like that in Hong Kong. When people from the Northeastern provinces of China visit Beijing, they urinate and defecate on the street of Beijing too. Like us, the people of Beijing consider such behaviour unbearable. Therefore, we cannot conclude that all Mainland visitors behave like that. I think it is unfair to criticize our Mainland compatriots with such a general remark.

On the contrary, is there a big problem if Secretary Gregory SO has used the word "tolerance"? The Secretary is not the only one to use this word, I would also use it. I would say that Hong Kong is a harmonious society and visitors should "do as the Romans do when in Rome". When they are in Hong Kong, they should behave like other Hong Kong people. The situation is the same when Hong Kong people visit Europe or the United States, and we have also been criticized. We have to "do as the Romans do when in Rome". How do people in Europe or the United States tolerate the visitors? In my view, a possible approach is to advice visitors instead of reprimand them as advocated by Mr Albert CHAN. What would happen if we reprimand our visitors? Even if they become aware of their mistakes and accept our criticisms, they will be displeased and feel humiliated. On the contrary, if we give them advice, they may learn quickly and will not repeat their mistakes. There are in fact other behavior which we find unbearable, for example, not queuing up, squeezing into a crowded lift, jumping a queue at the cashier, and so on.

If our friends in the Mainland only hear one-sided remarks from some Hong Kong legislators, and no other legislator has responded, then … Chairman, we may be filibustering now and I really do not want to speak. In fact, this is the first time that I speak during a filibuster. Since the Chairman has set the time limits for the debate, I believe the time taken to deliver my speech will not lengthen the filibustering launched by some Members.

LEGISLATIVE COUNCIL ─ 22 May 2014 11945

Perhaps it will be more appropriate to examine this topic in detail in a motion debate instead of this debate on the Appropriation Bill. However, some Members have insisted to wrangle over this problem. They said that the HKTB has spent too much money and they seek to reduce its funding as well as the provision on the promotional activities in the Mainland. As a matter of fact, visitors have chosen not to visit Hong Kong because of the "anti-locust campaign" in Hong Kong. Although not many people are involved in this campaign, its impact is significant.

The campaign has really affected many Mainlanders, giving them the impression that Hong Kong people do not welcome them. In fact, the rich Mainlanders do not mind at all. Are Hong Kong people more good looking? The Mainlanders can visit other places to spend their money and they will be more than welcome. If this problem goes to the extreme, the future economy of Hong Kong will be affected. Although problems have not emerged now as the unemployment rate only stands at 3.3% and there is no marked decrease in the number of inbound visitors, our economy will be affected.

Earlier, when I mentioned shops selling gold items, watches and jewellery, I have to point out that the salespersons of these trades earn commission on top of their basic salary. With a decreasing number of visitors and reducing business turnover, these grass-roots salespersons have a lower commission and income. In the geographical constituencies of New Territories East and New Territories West to which Mr Gary FAN and Mr Albert CHAN belong respectively, many voters are the grassroots and they have the right to vote. From the perspective of canvassing votes, we have to consider all the merits and demerits, and I hope that remarks made by Members will not present a one-sided picture to our friends in the Mainland.

Chairman, I understand that this is the subject of our debate today and so I have to give the above response. The Liberal Party will not support the amendment to reduce the funding in this respect.

Thank you, Chairman.

MR LEUNG KWOK-HUNG (in Cantonese): Chairman, regarding the impact of tourism on Hong Kong, after hearing Mr James TIEN's speech, I would like to discuss a few points with him. First, as I can tell Members, I have visited many 11946 LEGISLATIVE COUNCIL ─ 22 May 2014 places where local people urinate and defecate in the open. When I travelled to South America, I saw children living in poor rural areas urinate and defecate in the open. I did not mind for I chose to visit those places. But in the present case, we are living here in Hong Kong. Yet some of our Mainland compatriots have urinated and defecated on the street because this is their habit … What are we discussing here actually? The Secretary told us that we should be tolerant … Of course, I would not say anything should I come across such an incident. But he is the Secretary, and he considers that Hong Kong people should keep their mouth shut for the sake of tourism. Isn't that ridiculous? Okay, a child wanted to go to the toilet urgently, and his parents asked him to urinate on the street because there was no toilet around. Actually, that was what happened in Hong Kong three or four decades ago. That is why children wore open-crotch pants back then as they could urinate without having to pull down the pants.

It is the Secretary who has twisted the whole thing around. As a Director of Bureau who should be accountable, he said that we should tolerate these matters for the sake of Hong Kong's tourism industry. To be tolerant or not is a personal choice, and people who are wealthy should not be swelled with pride. That is not the meaning of being tolerant. He has taught us a bad lesson. If the Macao authorities said that they would tolerate money-laundering activities of Mainland visitors in the casinos, will that be acceptable? Of course not. Let me reiterate, Hong Kong people are not against the tourism industry or Mainland visitors, but anyone who has ever travelled on the MTR would know. Unlike me, Mr TIEN, you do not have to travel on the MTR.

Buddy, in the morning … CHEUNG Chi-kong is fond of adding fuel to the fire, and I really want to hear how Gregory SO will comment on CHEUNG's remarks. According to CHEUNG Chi-kong, MTR trains have become crowded because Hong Kong's unemployment rate has dropped and hence, more people would go to work by MTR. Is he blind? What he said was just sophistry. He should see that many people travelling on the MTR are not Hong Kong residents. The reason is quite simple. Only lawyers or people in similar professions would go to work with a trolley suitcase … Perhaps Mr Alan LEONG would do so, and he might be mistaken as a Mainland compatriot for he goes around with a trolley suitcase. CHEUNG Chi-kong should stop making such nonsense remark as there is no way Hong Kong people would accept his flat-out lie to twist reality.

What is our stance? In developing tourism, social costs will invariably be incurred. As I have said time and again in this Council, we should not only LEGISLATIVE COUNCIL ─ 22 May 2014 11947 consider the marginal benefits, or the profits earned, because there is a cost to be paid by Hong Kong. Let me give a simple example. At present, we have a problem of housing shortage, but the number of hotels built in Hong Kong over the past 10 years had exceeded that of housing by 10 times. As such, would you say that there is a cost for us to pay? As only hotels have been built, LI Ka-shing has surely earned a huge profit. Almost in every district of the territory, there is a hotel owned by LI Ka-shing. But ordinary citizens do not even have the opportunity to purchase their first flat, and they are forced to pay high rents or live in "sub-divided units". The problem is not having no land, but the land is used for constructing hotels, buddy.

Now let me go back to the subject. I have browsed through hotels.com specifically and note that hotel rates have been falling recently since the Golden Week holiday. The rate of a hotel room is about $500 per night, and I wonder if Mr TIEN is interested or not. A room rate of $500-odd is almost not enough to cover the cost. People are being short-sighted in saying one-sidedly the benefits brought by the tourism industry, but what about the imbalance in resource allocation created as a result? Has this problem been mentioned at all?

Some people mentioned that according to the report published by the International Institute for Management Development (IMD) in Lausanne, Hong Kong's competitiveness ranking has dropped from the first place to the third or fourth place … First, economic study reports published by the IMD in Lausanne are actually no big deal because they are premised on traditional values, just like those of the Heritage Foundation. That is quite alright. But some people attribute the fall of our ranking from the first place to the third and then to the fourth to the Occupy Central movement and filibustering. Those people might as well go to hell. I have read the report and nothing has been mentioned about those matters. As Hong Kong is the most politically stable place in the world, why would investors stop coming here for investment because of political wrangles?

I can tell Members that the cause of death for Hong Kong is our unitary economic structure, that is, any profitable business will be exploited to the fullest. Chairman, as I often say, "the good taste of boogers will make one pick his noses till it hurts". That is what has happened to Hong Kong's movie industry. Once there is a box-office hit, similar movies will be produced one after again until the genre is killed off. I can tell Members that diminishing marginal utility, as it is 11948 LEGISLATIVE COUNCIL ─ 22 May 2014 called in economics, has already set in for the tourism industry. Is Secretary Gregory SO in the Chamber now? Secretary Prof K C CHAN is here, but he will get his share of scolding in the next round. If Secretary Gregory SO is a responsible Director of Bureau, he has to respond to this question. The benefits brought by the Individual Visit Scheme (IVS), attainable by sacrificing other developments in society and adjusting our industrial structure, have been diminishing. In fact, according to the statistics of the Hong Kong Government, tourism only accounts for 4.7% of our GDP. While there are indeed many employees in the tourism industry, its contribution to our economy is only restricted to benefiting the major tycoons because the salary level of employees in the tourism industry is very low. In other words, it has minimal effect in improving the living standards of Hong Kong people. Surely, people have a job but the job is so poorly paid that they really want to quit.

I am speaking against the Secretary for Commerce and Economic Development, Gregory SO. I propose to deduct the provisions for his emoluments. Chairman, he is really remarkable. I said yesterday that a political assistant, whom I have forgotten his name, refused to give me his name card. But Gregory SO would readily present his name card. Soon after he assumed office, he put on a bureaucratic air and gave his name card to the Immigration Department. Of course, he did not do so on his own initiative. He was asked to produce income proof, but he said that he was the Under Secretary and did not need to answer the question. I will not dwell on to talk about his bureaucratic air, but I would like to ask Secretary Gregory SO ― he is not in the Chamber now ― if there are signs of a decreasing number of visitors and diminishing marginal utility for the tourism industry, should there be some contingency measures for Hong Kong? Should Hong Kong continue to grant land blindly for the construction of hotels, or should the completed hotels be put up for sale as apartments, as what LI Ka-shing had done, under the pretext of revitalizing tourism?

Chairman, that is the first point I want to raise about the subject under discussion today. Regarding the second point, it seems that what we are not talking about the tourism industry because the industry is very simple, that is, it is "earning petty commissions". Many tourists come to Hong Kong to buy those so-called "hit" commodities which are in short supply in the Mainland, in order to earn some money from the tax difference between the two places and evade tax payment to the State. If parallel trading is carried out in a large scale, it is a form of tax scam against the State; if the parallel goods are intended for personal LEGISLATIVE COUNCIL ─ 22 May 2014 11949 use, it is a form of tax evasion. But as tax evasion is the right of all tourists, I do not intend to make comments.

Honestly, people who queue up for long hours in Hong Kong for buying stuff are in fact evading tax. Instead of simply enjoying the rights of a tourist, they are evading the tax of the People's Republic of China. They buy bags in Hong Kong to be resold in the Mainland when they return. Tourism based on this mode of operation cannot last. Now we want to engage in another business, and we are really … This Council or the Government is the same as LEUNG Chun-ying: when they say A, it actually means B. Now, they say that a commercial centre should instead be established in the border. Can this be regarded as tourism development? If the Government has already come to the conclusion that it is not feasible to go on like this, please tell Hong Kong people clearly that we cannot receive so many visitors. But the Government is unwilling to accept this fact. Establishing a commercial center in the border is tantamount to ruining Hong Kong's tourism. In future, hotel rates will fall to the range of $300 because the Chief Executive is promoting the idea that for value added purpose, tourists do not have to travel far, they can go shopping once they cross the border. I forget whether the Loop or Qianhai is one of the selected sites, but all transport stations connecting to the border control point, or the border control point itself, should be expanded so as to establish some commercial centres, like the one in Lo Wu. Chairman, I cannot go to the Mainland, but you have visited the Lo Wu Commercial City. I have no idea what it is like.

Evidently, the proposal to establish these commercial centres has reflected the contradictory nature of the Government's policy. In that case, how can I approve funding to the Administration? Isn't that right? It is like telling the tourists that they need not come to Hong Kong; they can just go shopping across the border. When I travelled to South America, I noted that this arrangement was quite common because of the tax difference. Hence, is this policy misguided? Hong Kong people have to bear the suffering brought by the IVS. The problem of the IVS is not the tourists, but the problem of corruption in the Mainland. In the Lo Wu Border Control Point, people can easily get a multi-entry visa from the dozen or so travel agencies at a fee of $10 or $20, and then they can come to Hong Kong. It is not that we do not welcome Mainland visitors, but so long as they are coming to Hong Kong for shopping due to the tax difference, Hong Kong will sink if there is no control on the number of inbound visitors. Mr James TIEN, when you travel to Paris, have you met large groups of tourists pulling suitcases around in the subway? I bet you have not. But I 11950 LEGISLATIVE COUNCIL ─ 22 May 2014 think you can see such a scene at the airport. I also had the experience of sitting on the floor of the airport with my suitcase around. But would he pull his suitcase and go around in Paris? Of course he would not do so. Neither would Mr TAM Yiu-chung, right? Because it is just inconvenient to do so, buddy.

As a government official, he dares not speak the truth and dares not tell Hong Kong people the truth. He only tells us that beggars cannot be choosers. This is unacceptable. I was taught by my mother that beggars could not be choosers, and tofu with lard could also be tasty. But if I have followed her teaching, I would still be eating tofu with lard today. Let me talk about the Secretary for Commerce and Economic Development again, I propose to deduct the provision for his emoluments because the tourism industry is no longer sustainable. That is the hidden concern for both Hong Kong and Macao. If Members are unconvinced, they will know the answer in five years' time because by then both places would have many white elephants. Macao would be the first to fall because the current occupancy rate of its hotels is already quite low, and tickets for boxing match only cost some $100.

Our Government always works without vision. Nobody would pay attention if we propose to the Government to focus on the development of certified or authentic commodities. This is because people who are now making profits belong to the classes with vested interest, and they would like to continue with the status quo, showing no concern for the future. As the Government makes mistakes and is corrupted, it insists on developing a defunct sunset industry, yet the economic results arising therefrom would have to be borne by us. This may even lead to economic recession. He always says that my speeches cannot help Hong Kong … So many border control points have been developed in Hong Kong. Even today, we are still footing the bill to develop more border control points in order to attract more visitors. By developing tourism, does it mean that we have to attract a large number of IVS tourists to Hong Kong so that we can make a petty profit? I am definitely not saying that people without money should not visit Hong Kong. Don't take me wrong. That is definitely not what I have in mind. The question is: The Secretary must give this Council a clear explanation.

In my view, it is not feasible to develop tourism without limiting the number of visitors through the visa requirement. According to the Secretary, given the large number of border control points, there is no way to limit the number of visitors through the visa requirement. His statement is just a waste of time. He does not even dare consider imposing a visa requirement. Is there LEGISLATIVE COUNCIL ─ 22 May 2014 11951 any country in the world where no visa requirement would be imposed as a control measure against an excessive number of visitors? I invite him to give me an example, if any. Therefore, the problem today is that the entire Government is heartless. With so many visitors coming to Hong Kong, shouldn't we try to give them better hospitality, instead of cramming them into some places. If that can be done, there is hope for tourism development. Otherwise, Mainland visitors are deterred from visiting Hong Kong not because of the "anti-locust" campaign, but because all places are crowded with people. If they have a bad experience for the first time, they will not want to come again. Thank you, Chairman.

MR ALBERT CHAN (in Cantonese): Chairman, I have not finished with my comment just now. I have yet to analyse a number of problems concerning the tourism industry as I have only talked about Secretary Gregory SO. In fact, just now, when I criticized Mainlanders who let their children urinate and defecate openly in the busy districts of Hong Kong, my focus was on the Secretary's performance and his bias attitude. Chairman, why are Hong Kong people so angry? Speaking of being tolerant, while the Secretary told us that we should tolerate the illegal acts of Mainlanders in Hong Kong ― I think all Members know that such act is illegal ― there are cases in which the elderly, the vulnerable and the disabled have been brutally treated by law-enforcement officers of Hong Kong. Perhaps Mr James TIEN rarely surfs the Internet. Later, I will show him some cases being circulated on the Internet. In one case which happened more or less during the same period of time, an elder was bullied by a robust female staff of the Food and Environmental Hygiene Department (FEHD). Why didn't the FEHD staff adopt a tolerant attitude towards a frail elder?

Around that time, I received some complaint cases from my district office involving elders who had been fined $1,500 for throwing a piece of paper or a cigarette butt. Those elders lived on a monthly CSSA payment of some $1,600 or $1,700, and they begged FEHD staff not to charge them for they really could not afford the fine. If they were charged, they would have no money left for food for the entire month. Why didn't the FEHD staff adopt a tolerant attitude towards these elders? Why has the "Secretary Name Card" not given a helping hand to the disadvantaged in Hong Kong and asked the law-enforcement officers to be tolerant? Isn't he being biased? He is silent in face of Hong Kong people's misery, but he asks us to be tolerant when wealthy Mainlanders come to visit Hong Kong, resulting in high rentals, traffic congestion and environmental 11952 LEGISLATIVE COUNCIL ─ 22 May 2014 pollution, or practically leaving Hong Kong people nowhere to go because Mainland visitors who go around with their suitcases are taking up all the road spaces.

Hence, I hope Mr James TIEN can understand that we have received angry complaints in the district office. Let us not talk about the development of tourism based on the Individual Visit Scheme (IVS) as just mentioned by "Long Hair" for the time being, I hope Members can analyse carefully which sectors in society would eventually benefit from tourism development. Of course, the grassroots would certainly benefit for they can take up some elementary jobs, such as hotel housekeepers or salespersons in goldsmith shops, as well as in beauty parlours or drug stores. Undoubtedly, some grass-roots people will be benefited. I even know that some construction workers have chosen to work in the tourism industry in order to enjoy a more comfortable working and living environment. Hence, owing to the attraction of the tourism industry, the total workforce in the construction industry has been reduced. However, for Hong Kong as a whole, the successful or over successful tourism industry has resulted in spiraling rental. This problem has already been discussed in this Chamber many times. A few years ago, the monthly rental in the "Sports Shoes Street" was only around $400,000 to $500,000, which was already extremely high. A few rich and powerful Members or their families also own several shop premises in the "Sports Shoes Street". In a recent property acquisition exercise of the Urban Renewal Authority, over $100 million in compensation was granted for a shop premises with an area of 1 000-odd sq ft. Lately, the monthly rental of shop premises in the area has already soared from around $400,000 to $500,000 to around $800,000 to $900,000. That is the impact boosted by the tourism industry. As a result, many traditional industries have disappeared, while the hotel industry is reaping exorbitant profits. Industries with greater control from the property industry would have more benefits, but traditional industries have disappeared gradually. That is the price we have to pay. Years ago, I had a discussion with Donald TSANG about the Yam O Log Pond and asked if it could be preserved. He replied that it was a sunset industry and should be allowed to take its natural course. At that time, he was still the Financial Secretary but his attitude was already very aggressive, saying that it was a sunset industry and should be allowed to take its natural course. But the existence of these sunset industries is beneficial to Hong Kong because they being variety to our economy.

Hence … In fact, I do not object to tourism development. Some 10 years ago, I even submitted a proposal to the Government, asking the Government to develop tourism in South Lantau, which included establishing more water sports LEGISLATIVE COUNCIL ─ 22 May 2014 11953 centres, as well as developing Mui Wo into an ecological, historical and arts and cultural ring, so as to create an attractive environment for more visitors. Some 10 years ago, I submitted the proposal to the Government, suggesting that the Silvermine Cave could be opened to develop historical and cultural tourism. Actually I support the promotion of tourism development, but I also hold that tourism development must go hand in hand with local interests, development and characteristics, rather than just sacrificing local history, arts and culture and characteristics for the sake of appealing specific tourists. At present, local arts and culture in Hong Kong have disappeared gradually, even the North District … There used to be a shopping arcade in the North District. Some six or seven years ago, I was approached by an operator of a shoe shop in an arcade close to the MTR station. He had operated the business with some profits for seven or eight years. But because of the IVS, the entire shopping arcade was to be redeveloped. I then negotiated with the consortium on his behalf to see if he could rent a small shop to continue operation. Ultimately, his request was turned down. Although the consortium concerned was quite understanding, both sides could not reach a consensus. As a result, the shoe shop was closed down. Over the years, property prices in the North District have sky-rocketed, and it is the same in Luen Wo Hui, Fan Ling, as well as other areas. Property prices in all districts have increased substantially.

Hence, in principle, neither Mr Gary FAN, "Long Hair" nor I in this Chamber am against tourism development. But we hold that certain restrictions should apply in the course of tourism development. While a decision has already been taken in Taiwan to limit the number of visitors, no similar decision has been taken in Hong Kong. The "Secretary Name Card" has even said arrogantly that the number of visitor arrivals would reach 70 million in 2017, and 100 million in 2023. After hearing his statement, Hong Kong people became furious. Before he gave those figures, Hong Kong people were still … While Hong Kong people are somewhat discontented, they have adopted a tolerant attitude without voicing our their complaints. Is that right? But when they learnt that the number of visitors would increase from 50 million at present to 100 million in 2023, they became furious. After public outcry and conflicts were sparked off by the figure of 100 million cited by the "Secretary Name Card", the "anti-locust" campaign began.

All along, he has not conducted any assessment at all. It was only until the end of last year that the Government had hastily conducted an assessment within a short period of time, but the assessment was completely useless. In respect of transportation, only some partial data was given in the assessment, 11954 LEGISLATIVE COUNCIL ─ 22 May 2014 without any specific analysis. In particular, regarding the problem of rent, the impact of tourism on different trades and industries, as well as people's livelihood in Hong Kong, the impact on the daily living of Hong Kong people, and so on, the findings are quite biased and groundless. As a result, the public are gravely dissatisfied. On the day when the "Secretary Name Card" argued with the committee, I asked him whether an overall assessment on the transport problems had been conducted. He dared not reply and kept evading the question. It shows exactly how unprofessional, biased and insincere the "Secretary Name Card" is. As the Secretary, he has not handled the problems sincerely for he considers himself to be lofty and politically correct … That is exactly the attitude of the Democratic Alliance for the Betterment and Progress of Hong Kong (DAB). The "Secretary Name Card" was once a member of the DAB, right? Having lived in Canada for so long, how come he has learnt nothing about the culture of democracy? The entire problem arises because he considers that political correctness is the overriding factor, such that members of the public with a different political view have a feeling of being betrayed, cheated and bullied.

Mainland visitors who urinate and defecate in the open are not sanctioned, yet elders who drop a piece of paper on the street were fined $1,500. Members of the public who have been fined are naturally furious, and they will definitely fight against him. Why can't he be tolerant towards the elders in Hong Kong and pay the fine of $1,500 on their behalf?

CHAIRMAN (in Cantonese): Mr CHAN, you are repeating the contents of your speech.

MR ALBERT CHAN (in Cantonese): … Okay, I am just getting more and more furious, Chairman. I am really very furious. But the rich and the powerful will never understand such rage. Only people like us who come from the grassroots and maintain contacts with the general public will have this feeling.

Those people have now become rich and powerful. They are only concerned about getting benefits in such a capacity. Chairman, I still admire their passion for politics in the 1960s, but such passion has gone now. Instead, they are now focusing on the transfer of benefits and protecting each other's interests. Given their rich and powerful status, even the Hong Kong Federation of Trade Unions is starting to forget the interests of the grassroots, especially the workers.

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Chairman, I invite you all to step forward and engage us in dialogue like Mr James TIEN, so that the truth can be revealed by facts.

Chairman, apart from tourism development and his theory on tolerance, the "Secretary Name Card" has made another mistake with the license application of the Hong Kong Television Network Limited (HKTVN). That is another political decision which sacrifices Hong Kong's core values, the rule of law, and the confidence of Hong Kong people over the years that fairness, justice and independence would be upheld by the bureaucracy in Hong Kong. This fundamental change is so ridiculous that no other government policy throughout the history of Hong Kong can compare with it, and he is the Secretary in charge of this portfolio.

Separately, regarding Radio Television Hong Kong (RTHK), some Honourable colleagues have just talked about the design of its New Broadcasting House (New BH), and I have also mentioned the same in the committee. The design of the New BH was drawn up through the collusion of the Secretary and the Director of Broadcasting, resulting in a substantial increase from the original estimates. They capitalized on the opposition against the increasing construction costs, and the funding provision for the New BH was rejected eventually. Actually, as I have already pointed out in the committee, it was obviously a conspiracy for the Director and the Secretary to submit the funding application without getting prior support from the royalists. Given that it is such an important project, how come the Government had not, before the submission of the funding application to the Legislative Council … Perhaps the Government has already cut a deal with the royalists to reject the application because the royalists have always regarded RTHK an arch rival. Hence, it is clear that the Secretary really lacks political integrity. As the Secretary, he should be fully prepared to promote and defend the policies as well as the relevant funding applications under his charge, in order to ensure that the funding applications made by his Bureau would be passed by the Executive Council and the Legislative Council. However, he has resorted to political gimmicks to sabotage this funding application. In my view, he is unethical politically and extremely shameless.

On account of the many reasons mentioned above, I propose to deduct the estimated expenditure for the emoluments of the "Secretary Name Card" for one year.

11956 LEGISLATIVE COUNCIL ─ 22 May 2014

MR GARY FAN (in Cantonese): Chairman, in this speech, I will speak on my Amendment No 902 which is on subhead 000 concerning the Commerce and Economic Development Bureau, that is, to deduct the estimated expenditure for six months' emoluments of Secretary Gregory SO. Chairman, my proposal is already lenient because originally, I intended to deduct his emoluments for 12 months.

The performance of Gregory SO in the past year has been a matter of contention. First, his unfair handling of the granting of free television licences, and then his sub-standard performance in handling the Assessment Report on Hong Kong's Capacity to Receive Tourists (Assessment Report) which is one of my major concerns. Chairman, I remember very well that right after I became a member, I was finally allotted a slot to raise a question at the Chief Executive Question and Answer Session held in December 2012. At that time, the Chief Executive advised that an assessment report would be prepared. After a long wait of 12 months, all we get is a report that fails to get a passing mark. Moreover, Secretary Gregory SO's open and disdainful remark not only fails to address serious Mainland-Hong Kong conflicts and the miseries of the public, but has also triggered the anger of Hong Kong people. Obviously, Gregory SO's salary is incommensurate with his performance and should therefore be reduced.

Chairman, in October last year, the Secretary for Commerce and Economic Development, Gregory SO, announced the result of the applications for free television licences. The Hong Kong Television Network Limited (HKTVN) founded by Ricky WONG was not selected. In the eyes of Hong Kong people, the HKTVN has all along been the best among the three applicants in terms of financial capability, planning and programming capability. As such, the result had stunned Hong Kong people. Secretary Gregory SO was being evasive when he explained the reasons for declining the HKTVN's application, saying that a basket of factors had been taken into consideration. This had aroused the conjecture of the public and media about what factors were involved, suspecting that the decision was made based on the personal political consideration of Chief Executive LEUNG Chun-ying.

In fact, a lot of evidence indicated that the licensing of free television had not complied with procedural justice. The HKTVN's application for a licence was rudely declined with no regard to the professional, objective and unbiased views of the former Broadcasting Authority (BA), the Communications Authority (CA) and the consultant. Section 10 of the Broadcasting Ordinance provides LEGISLATIVE COUNCIL ─ 22 May 2014 11957 that the Chief Executive in Council may, after considering recommendations made by the CA (formerly known as the BA), make a decision on the licensing application. Such provision shows that the CA plays a critical role and position in the television licensing regime. A number of members of the former BA were experts in communications. Functionally, the former BA might make recommendations to the Chief Executive in Council on television licence applications and therefore its opinions should be respected. However, it was disclosed by Ambrose HO, Chairman of the CA, that the CA had all along maintained that three licences should be granted and considered it unnecessary and inappropriate to rank the three applicants.

Chairman, despite being the major advisory body for the Government in broadcasting policy, the CA's recommendations had been totally denied by the Government. As a result, we cannot help querying that the Government has never handled free television licensing from the perspective of broadcasting policy. Rather, it simply aims at suppressing Hong Kong people's freedom in obtaining information, or else it will not totally ignore the professional advice of the CA. Moreover, significant policy changes have also occurred in free television licensing. In the past, there was no upper limit on the number of licences to be granted. But now selection is to be made among the three applicants. Though the Secretary for Commerce and Economic Development had written to the three applicants giving them the opportunity to make submission, it had not consulted the CA in advance, nor asked the CA to re-assess the three applications based on the new policy. Therefore, the licensing decision was made without considering the recommendations made by the CA based on the new policy, and had thus violated the requirement stipulated under section 10 of the Broadcasting Ordinance.

Chairman, subsequently, Ms Jenny NG, Asia managing partner of the consultant commissioned to conduct the study on the free television market, had openly condemned the Government for quoting the consultancy report out of context and distorting the facts. She accused the Government for quoting two paragraphs from the 400-page report as justifications for declining the application of the HKTVN; but the whole report was in fact an analysis on market competition, such as the impact of licensing on the market, demand for manpower, release of creativity, and so on. It had never pointed out which particular company was unfit for operation. Ms NG's accusation was directly pointed at Secretary Gregory SO for distorting the meaning of the consultancy report.

11958 LEGISLATIVE COUNCIL ─ 22 May 2014

Chairman, the Legislative Council negatived the invocation of the Legislative Council (Powers and Privileges) Ordinance to conduct an investigation, thereby letting Secretary Gregory SO off the hook, However, based on the evidence mentioned above, members of the public can draw the conclusion that the Government's decision on free television licensing is to a large extent made on political consideration rather than simply from the perspective of policy and business. As such, I think Secretary for Commerce and Economic Development Gregory SO should be held responsible.

Chairman, after the HKTVN was denied a licence, it switched its development to mobile television service and acquired China Mobile Hong Kong Corporation, a subsidiary of China Mobile, which holds a mobile television licence. However, the CA explained that under the Broadcasting Ordinance, if television transmissions can reach an audience of more than 5 000 premises, a free television licence will be required. As the mobile television transmissions of the HKTVN can reach an audience of over 5 000 premises, the furore over free television licensing has aroused further controversy. Hong Kong people begin to query whether the provisions of the Broadcasting Ordinance are outdated and fail to keep pace with the trends. Many of its provisions are inconsistent with the Telecommunications Ordinance. Being a principal official under the accountability system, Gregory SO should be responsible for giving an explanation to the public and the media. Instead, he used the CA, which is only responsible for enforcement action, as a protective shield and refused to make appropriate responses to the question of whether the Ordinance was inconsistent and outdated. His performance has obviously let the public down.

Chairman, being the Secretary in-charge of economic development, Gregory SO has repeatedly failed to discharge his duties and properly handled the licensing procedure of free television service. The image of Hong Kong having a fair and open business environment has thus been victimized. Therefore, I must lash out at him.

On the other hand, I must criticize Secretary Gregory SO for his unsatisfactory performance in handling the Assessment Report. The Neo Democrats and I opine that the Assessment Report, which is out of focus and deviates from the facts and public opinions, is a piece of sloppy work. The biggest problem with the Assessment Report is that it has simply classified the Individual Visit Scheme (IVS) as a policy in tourism development, instead of assessing the IVS from the perspective of the general public. It only focuses on LEGISLATIVE COUNCIL ─ 22 May 2014 11959 addressing the technical problems such as the capacity of tourism facilities, but fails to assess the issues that Hong Kong people are concerned about, such as the nuisance caused by parallel traders. It disregards the overcrowding problem of Hong Kong caused by the IVS and the multiple-entry permit, not to mention any touches on the social conflicts triggered by the blind integration of Mainland and Hong Kong as well as Hong Kong-Shenzhen integration. In terms of public policy, the Assessment Report has obviously neglected those problems that should be dealt with.

According to the paper submitted by the MTR Corporation Limited to the Legislative Council after the Assessment Report was released, the Commerce and Economic Development Bureau has adopted an outdated methodology in its report in calculating passenger capacity. In its calculation, each square metre of standing space of all train compartments of a train carries six passengers. This is obviously inconsistent with the actual situation and has over-estimated the capacity of the MTR trains. Nonetheless, Secretary Gregory SO, who always rides on chauffeur-driven sedan, continues to disregard the feelings of the public who have to squeeze themselves into the MTR trains every day when they go to school or work. He simply asks members of the public to be tolerant and wait for the next train if they cannot get onto the first one. This is a sound bite of Secretary SO which has also become his most impressive political achievement in the eyes of Hong Kong people. I would like to invite Gregory SO to try a ride on the MTR during rush hours, just like what Secretary Prof Anthony CHEUNG did. He will then know the fact that the public have to wait for two, three, four or even more trains during rush hours before they can get onto the train. I am not sure whether members of the public will rebuke him when they see him. But they will surely be angry when they see him. So I think he had better get prepared for that.

Chairman, when the National People's Congress meeting was being held, the senior Beijing officials finally decided to reassess Hong Kong's capacity to receive IVS tourists. From the political point of view, this objectively proves that Gregory SO has failed to discharge his own duties, thus forcing the Beijing Government to intervene in the internal affairs of Hong Kong that should have been dealt with by the SAR Government. As a result, the Assessment Report released by Gregory SO is set aside. The research report prepared by the Legislative Council Research Office contains even more details and its figures and justifications are consistent with the facts.

11960 LEGISLATIVE COUNCIL ─ 22 May 2014

I thank Mr James TIEN for debating with us. I respect his opinions and I pay special attention to his remarks because he was once the Chairman of the Tourism Board. I remember he went on a trip to Hawaii some months ago. He told us that he had been there some two to three decades ago and one of his observations is that being a world famous tourist spot, its scenery has not undergone any changes over the years. I would also like to point out that in San Francisco on the West Coast of the United States where I studied, there are no significant changes in the cityscape over the past two to three decades.

Why do I mention this point? These are all tourist cities. In all tourist magazines, they are listed among the top 20 or 30 tourist cities. On the contrary, the number of tourists coming to Hong Kong is as high as 50 million per year due to the influx of IVS visitors. In comparison, Japan has a large area and population size, yet the number of incoming tourists is only some 10 million a year. Being a small city with a large population, Hong Kong has to receive 50 million tourists. As a result, the cityscape has undergone great changes while small shops are forced to wind up. Don't we wake up now? Don't we need to make adjustments? When a policy deviates from the policy objectives, changes and adjustments will be necessary. This point is not arguable. It is important to earn money and make economic development, but is the money earned worth our efforts? Should we at least ensure that the daily life of local residents will not be seriously disturbed? The Legislative Council and the Government have the obligation and duty to look into these problems in formulating public policies.

Chairman, I therefore propose the amendment to deduct the estimated expenditure for six months' emoluments of Gregory SO, the Secretary for Commerce and Economic Development, so as to condemn his failure to discharge his duty and to undertake his responsibility. His performance is not commensurate with his high salary.

Chairman, I so submit.

MR JAMES TIEN (in Cantonese): Chairman, owing to your decision made yesterday, I think this session has become more interesting. In the previous session, we all thought that if we participate in any debate or make any response, we may be helping the filibusterers. But given that this session will end by 11 pm today, my speech will not help the filibusterers. Instead, it can somehow occupy their time.

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However, Chairman, I do not have the endurance to speak for more than 10 minutes for filibuster purpose. But as a number of Members including Mr LEUNG Kwok-hung, Mr Albert CHAN and Mr Gary FAN have put forward a few arguments on tourism just now, I will make a simple response.

Mr LEUNG Kwok-hung said that the Government shows favouritism towards tourism. Despite a scarcity of land, government sites are used to build hotels instead of public housing. "Long Hair" is wrong in making this comment. Among the 60-odd sites sold by the Government last year, only two are used for constructing hotels while all others are used for residential and commercial purpose. Regarding the two sites used for hotels, each of them can only provide about 400 hotel rooms, that is, some 800 rooms in total, while the remaining dozens of sites will provide 20 000 residential flats. There is a big difference in comparison. Therefore, I do not agree with his remark that the Government is using all the land for building hotels to promote tourism and neglects the housing needs of the public.

Moreover, Mr LEUNG has mentioned the problem in riding the MTR. When we travel to London, New York or Paris, or to Japan where I sometimes visit, we will also take the subway. This has nothing to do with the fare. I can well afford to take a taxi or rent a car, but I hate being stuck in the traffic. In all big cities around the world, the subway is the fastest means of transport. Though I do not speak French, it is easy to ride on the subway in Paris because the signs are clear and interchanges are not a problem. Therefore, tourists going to any big cities will choose to travel by the subway. As to whether tourists in big cities carry large suitcase on the subway, this situation is uncommon. But it does not mean that it does not exist. For Mainland visitors in Hong Kong, I guess they usually travel on the MTR with their suitcase after shopping at one spot and then going to another. I believe such pattern does not only happen in Hong Kong. They will do the same on the subway in London or Paris.

Do local residents have a feeling of dislike? They may, but even so, what have they done? We have to make an evaluation. They may probably find that the tourists have caused some inconvenience. Nonetheless, these tourists have brought so many business and job opportunities to shops in Paris and London, and so on. The income of the grassroots, which usually comprise basic salary and commission, will increase as a result. For this reason, they may not have such strong feelings.

11962 LEGISLATIVE COUNCIL ─ 22 May 2014

On the other hand, Mr Albert CHAN has brought up the problem of rising shop rents in Sheung Shui and Fan Ling which he thinks property developers should be blamed. But this is not the fact. Major developers do own shopping centres, yet street shops in Sheung Shui and Fan Ling that have appreciated in value due to speculation are mostly owned by individual investors. These investors are in fact ordinary Hong Kong citizens who are bold enough to invest in the hope that the value of the properties will appreciate. The situation is not attributed to property developers who acquire all the shops on a street in Sheung Shui and convert them into goldsmith shops. It is attributed to the fact that many Hong Kong investors who own the shops want to increase rent. But these investors may also suffer great losses anytime. Recently we have noticed that many shops in Causeway Bay have been left vacant for half a year because the investors ask for a very high rent due to the high purchase price. As interest rates are low, they can still survive. But if they do not have rental income, they cannot even repay the interest. As a result, rentals as well as shop value may plunge substantially. We can easily observe the situation of shop premises. Chairman, I need not make a declaration of interests because I do not own any shop premises, not even one. To those who engage in the retail industry, it is very easy to assess whether a shop is valuable. A shop where business is doing well will be valuable; on the contrary, a shop where business is doing badly will definitely be of little value. In other words, if the number of tourists drops, business turnover will drop and so will the rentals. As there is a time lag, the rental will not decrease immediately, but may happen after a few months. Indeed, this is happening now.

Just now Mr Gary FAN has brought up the problem of multiple-entry permit and proposed to cancel the Individual Visit Scheme (IVS). Being the former Chairman of the Tourism Board, I am more familiar with the policy. I would like to explain further, because the Government may not deploy any official to respond or he may not be in the position to make a response. The IVS has been implemented in 49 cities since 2008, and the arrangement of multiple-entry permit is only implemented in Shenzhen. Multiple-entry permit may be granted to the 2 million-odd residents in Shenzhen which allows them to have multiple entries to Hong Kong within a year. Until now only some 1 million residents have applied the permit. I concur with Mr Gary FAN's view on the problem of parallel traders. While we allow Shenzhen tourists to come to Hong Kong, it does not mean that they can have multiple entries within a day and conduct parallel trading. Therefore, we do not consider it necessary to cancel the multiple-entry permit. Rather, an additional condition can be imposed under which tourists may have multiple entries within a year without having to apply LEGISLATIVE COUNCIL ─ 22 May 2014 11963 for a new permit for every visit, but they are not allowed to have more than one visit within one day. From the perspective of tourism, it is unreasonable for a real tourist to come in the morning, return in the afternoon, then come back again in the evening. If tourists stay in Hong Kong for one day, there are a lot of tourist attractions that they can visit. Therefore, I think imposing such additional condition is a feasible option. According to the figures recently obtained by the Tourism Board from the Immigration Department, among the 50 million-odd inbound tourists, around 40 million … excuse me, around 37 million are Mainland visitors, of which as many as 10 million people do not stay overnight. This is the situation of one entry per day as mentioned just now. If a change is made, the number of tourists in nominal term will at least decrease by several million to 10 million.

Mr Gary FAN has brought up another fact: Japan has a population of 100 million, but why are there only 10 million tourists per year? This is reasonable because Japan needs not rely on foreign visitors given its large number of local tourists. In New York, the number of tourists is some 100 million per year, not all of them are overseas tourists, local Americans are also included. Let us take a look at Beijing. The number of visitors going to the Great Wall and the Summer Palace exceeds 100 million per year, and most of the visitors are local people instead of overseas tourists. As they do not need to go through the immigration, the number on record will be different. Of course, being a city with a total population of only 7 million, Hong Kong depends very much on Mainland visitors for its tourism industry. The number of local tourists is seldom reported and the Government has not kept the relevant information. Can we consider this concept: China is very big … excuse me, Chairman, Beijing is a part of China and so is Hong Kong … the tens of millions of visitors coming to Hong Kong have become foreign visitors only because they come on a permit. In Beijing, there are as many as 100 million tourists, among them, foreign visitors, this is, people travelling on American or European passport, account for several million to 10 million. The number of local Chinese tourists from other provinces travelling to Beijing exceeds 100 million per year, which is even larger than the number of tourists to Hong Kong. The proportions for Shanghai and Guangzhou are similar. From this concept, as Hong Kong is a city in China, should Mainland visitors among the tens of millions of foreign tourists be treated as foreign visitors? If so, such a comparison is not fair.

Chairman, that is all I would like to respond.

11964 LEGISLATIVE COUNCIL ─ 22 May 2014

MR CHAN CHI-CHUEN (in Cantonese): Chairman, yesterday you made a decision to set a time limit for the debate so as to cut off the filibuster, at first I find such decision evil, but today I find something good about it in that it has encouraged more Members to speak, making our debate more meaningful.

I consider the debate just now very meaningful and if Secretary Gregory SO has listened to our speeches, they will certainly be helpful to the SAR Government in reviewing the tourism policy in future. Since this debate is so meaningful, I hope more Members will hear it and I request a headcount.

CHAIRMAN (in Cantonese): Will the Clerk please ring the bell to summon Members back to the Chamber.

(After the summoning bell had been rung, a number of Members returned to the Chamber)

CHAIRMAN (in Cantonese): Mr CHAN Chi-chuen, please speak.

MR CHAN CHI-CHUEN (in Cantonese): Chairman, I would like to thank Mr James TIEN again for his two speeches. Hence, I will leave the finale of the Civil Aviation Department scandal aside for the time being and proceed to speak in support of some amendments concerning the tourism industry. I will support Amendment Nos 884 and 885 proposed by Mr LEUNG Kwok-hung and Mr Albert CHAN respectively to deduct the estimated expenditure for the Commerce and Economic Development Bureau (Commerce, Industry and Tourism Branch) on subventing the Hong Kong Tourism Board (HKTB) for the whole year; and Amendment No 887 to deduct the estimated expenditure for the Tourism Commission under the Commerce and Economic Development Bureau (Commerce, Industry and Tourism Branch) on the operation of the tourism programmes for the whole year.

I would like to tell everyone, especially Mr James TIEN, that we support these proposals not because we take the tourism industry lightly or we are antagonistic towards the industry; on the contrary, we want to cherish the industry. Since we do not directly benefit from this industry and are not industry players, we can think outside the scope of "the more, the better". LEGISLATIVE COUNCIL ─ 22 May 2014 11965

People who engage in the trades of receiving guests, such as the service, catering or retail trades, should not adopt the mentality of "the more, the better" or hold the attitude of "whoever comes will be welcome". Otherwise they will work themselves to death. That is similar to killing the chicken to get the egg. Only a few guests will come back.

As a matter of fact, the idea of sustainable tourism is being advocated all over the world. The concept of sustainability should be taken into account in all kinds of development. I wonder if Secretary Gregory SO has ever studied the subject of sustainable tourism. Do not say that I have made no preparation for the filibuster, I am well-prepared. I have read the report on "European Tourism Indicators System" published by the European Union in February 2013 which expounds on the concept of sustainable tourism. It points out that when formulating the tourism policy, one cannot look at the figures and the number of tourists alone. In the Introduction of the report, it is stated that in developing sustainable tourism, one must identify the capacity and limits of the tourism-related resources and should balance the economic, environmental, social and cultural interests, so as to ensure the prospects and long-term development of the tourism industry. I believe everyone understands these principles. Regarding the tourism policy of Hong Kong, apart from the idea of "the more, the better", the authorities have not formulated any policy on tourism or economic development. If there is no direction, or if the direction is wrong or outdated, the authorities should stop and think. Hence, if we deduct their expenditure and force them to suspend their work for a year to consider afresh the problems, it may be a good thing. The authorities have spent money on placing advertisements constantly to promote Hong Kong and attract tourists. However, if the tourists cannot get the service after they come to Hong Kong, they may detest the place. They learn that Hong Kong is the Pearl of the Orient, a gourmet paradise and a shoppers' paradise, and if their expectation cannot be met, for example, the tourist spots are so packed with people that they cannot see any view, or the scenic spots have been damaged; or restaurants of this "gourmet paradise" offer inferior good as there are too many customers to serve, and the quality of food offered by some so-called star-class restaurants is not as good as claimed, the tourists will not return to Hong Kong again after their first visit. This will have adverse impact on the sustainability of our tourism industry.

There are a number of points in the about report which I think Secretary Gregory SO should make reference to, including management of tourist attractions. I do not know how much effort the authorities have made in 11966 LEGISLATIVE COUNCIL ─ 22 May 2014 managing the tourist attractions and whether the attractions are truly attractive as described in guide book or whether such attractions have changed. Have the natural scenic spots been damaged and littered with rubbish and excrement? Certainly, the report also talks about cost-effectiveness. I believe the business sector is most familiar with this. But other than that, there are also the social and cultural impacts. One very important point is whether tourist arrivals will cause dissatisfaction among local residents, that is, they resent tourist arrivals. Let us not talk about our visitor carrying capacity for the moment, if tourist arrivals have aroused local residents' resentment ― I will not comment on whether local residents' acts are right or whether they have a sense of tolerance ― the objective fact is that people are increasingly furious and aggrieved, and the authorities have to address the problems. If the problems cannot be addressed, the authorities should stop and think, and they should not invite more tourists to come. If the MTR train compartments become increasingly overcrowded, incidents of fighting or even killing may happen. I often talk about Secretary Gregory SO. He draws a high salary, and his advice is that people should wait longer to get on the MTR trains. When I make an overall comment on Secretary Gregory SO later, I will definitely seek to reduce his emoluments. At least he should advise tourists that if they wish to cross the harbour but are unable to get on the train at the Admiralty Station, they can go to the Central Station as it is the terminus; and if they want to go to Chai Wan from the Admiralty Station but cannot get on the train at Admiralty, they can go to the Sheung Wan Station, which is the terminus and the train will turn back from there. The Secretary should at least provide some guidance to the tourists, as in the case that after the incident of people urinating and defecating in public in Hong Kong, the media in the Mainland has published a "toilet location map" to tell tourists where to find public toilets in the vicinity of tourist attractions. This is a positive way to deal with the problem, not just telling people to be "tolerant".

As a matter of fact, Taiwan has studied the sustainable development of tourism and sustainable sight-seeing activities for 10 or 20 years and has published many articles … of course I will not spend time to read them out, but some ideas are worthy of our consideration. Apart from the social, cultural and economic level, it is most important for the authorities to gauge the negative impact on society, including the increasingly serious problem of overcrowding in public transport and the impact on the emotions of residents and tourists. For example, our proposal to levy an arrival land tax on visitors is not to set against the tourism industry, but the tourism industry said that we confront them and intend to "drive visitors away". I remember Mr LAM Kin-ngok once queried why we would come up with such an idea. He considered that we should "never LEGISLATIVE COUNCIL ─ 22 May 2014 11967 turn anyone away". As in the case of operating a factory, when there were more orders, the operator should expand the factory, purchase more machines and hire more workers, and one should never "drive the customers away" in doing business. However, the acquisition of factories and machines, as well as the employment of workers cannot be done overnight. The situation of the tourism industry is even worse.

Hong Kong is a tiny place. When you are aware of this crisis, can you churn out another Hong Kong? The rationale is simple enough. Besides, we have not considered the negative impact of the tourism industry on society, that is, the costs. In Taiwan's studies on sustainable tourism, there are some concepts that Hong Kong people are not so familiar with, such as "low impact tourism" and "responsible tourism", and certainly it also includes "green tourism". They will consider the stability, receptivity and permissibility. For example, permissibility refers to the degree that local residents or the management of tourist spots can accept or tolerate the interference or changes brought to the overall environment by tourism development or activities.

When measuring these factors, we must have a common point that we all accept, for example, our demand on the quality of life. If our quality of life is compromised as a result of an increasing number of tourists and a higher cost-effectiveness, to what extent can we tolerate such damage? As the number of tourists increases, the tourist spots will inevitably be damaged which will certainly affect their attractiveness. How do we make the assessment? With more Mainland tourists, or those we call "poor quality tourists", coming to Hong Kong, some high quality tourists or tourists from Europe or America tourists will also feel the impact. I thank Mr James TIEN for telling us just now that not all resources of the HKTB are spent on attracting Mainland tourists, as some Mainland tourists choose to visit some newly developed or more remote destinations. The other target groups of our promotion are tourists from Asia, Europe and America. However, if even Hong Kong residents find it bearable having their feet run over by wheeled suitcases, or feeling reluctant to queue up for shopping in a brand name shop because of the noise and the many people waiting in line, how will European and American tourists react when they come to Hong Kong? Will they be frightened on their first arrival and will never return to Hong Kong? They have to think about this issue as they are the one who formulate the policy. When we criticize certain policies or deduct the resources for certain measures, we want to take the opportunity to force the Government to think clearly, or at least the Government should let us know that it 11968 LEGISLATIVE COUNCIL ─ 22 May 2014 has given due consideration, and it has not just cooked up some figures, such as claiming that the MTR has surplus passenger capacity. These are cold figures which do not involve the social and cultural factors or the social impact that I have just mentioned. In my view, all actions should stop for the moment. Even if there is business opportunity, if I cannot cope with it, it is better not to place any more advertisements. If I can no longer cope with the existing customers, why should I spend money for advertisement and attract more customers. Even if more customers are attracted, I cannot cope with them, or I cannot maintain the quality of service. It is better to stop, take a break, and maintain a good health first.

Let me quote some basic statistics: the total funding allocated to the HKTB is estimated to be $655.7 million, a substantial increase of 15% over last year. The increased expenditure is mainly used for promotion programmes, which is estimated to be $330.6 million, and over a half of the funding will be spent on market promotion, with the focus on attracting overnight visitors. The number of visitors recorded by the HKTB last year was 54.3 million, an increase of 11.7% over 2012. Many people in Hong Kong know that at present, 75% of tourists, or about 40 million, are from the Mainland, an increase of 16.7% over 2012. The HKTB also projects that the number of visitor arrivals in 2014 will have an overall increase of 8.6%, or almost 59 million, and Mainland visitor arrivals will increase 10.8% to 45 million.

Of course, as an organization to promote tourism, the HKTB aims at attracting tourists to come to Hong Kong, and the increased number of tourists is an indicator of its performance, meaning that its performance is satisfactory and the funding allocated to it is well spent. This is a very simple mathematic formula, but now we have to point out that this formula is wrong in the sense that other than the diminishing marginal utility, the social, cultural and environmental costs have not been taken into consideration. We often ask whether there are too many tourists in Hong Kong and whether the funding for promotion should be deducted. However, when we say there are "too many" tourists, it gives people the impression that we are being conceited before getting rich. In the past, we had to rely on tourists, but now we say that we do not need them anymore. Just because we have to rely on tourists, we are more afraid of tarnishing our good reputation and our situation will then be miserable. If we compare Hong Kong to a company, once our attraction to tourists has diminished, it is difficult to reestablish the industry and make it thrive again.

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In the Assessment Report on Hong Kong's Capacity to Receive Tourists published by the Government, the visitor arrivals is projected to be over 70 million in 2017 and will reach 100 million in 2023. The people of Hong Kong are alarmed by these figures. The so-called China-Hong Kong conflicts or ethnic conflicts are the results of such figures. Hong Kong people have the feeling that they are "bombarded" by troops of Mainlanders. Has the Government made any effort in upgrading the quality of tourists? For example, our proposed arrival land tax on visitors will drive parallel traders away. I will not regard parallel traders as "low quality tourists", but they cannot be regarded as high quality tourists. We have also proposed to limit the number of Mainland tourists, and I know that other political parties are also considering this measure. However, so far, the Government is still reluctant to give a positive response. We propose to reduce the expenditure on tourism promotion, which means the expenditure on promoting Hong Kong to the Mainland tourists will also be reduced. We think we should try to do so, we really should take a pause, stop placing advertisements and stop engaging in any promotion activities. I believe the number of Mainland tourists will not plummet instantly. The Government can make use of this year to study afresh the overall tourism policy and the positioning of the market, and see if a restructuring is needed by receiving some high quality guests or providing some high quality tourism services. We also have to asses if we can attain sustainable development. This is the message that I wish to get across to the Government through this amendment.

MR ALBERT CHAN (in Cantonese): Chairman, my comment on Secretary Gregory SO just now has really created a big stir. After I spoke, I have received some feedbacks from members of the public through the Facebook. "Master TIEN" is present now and I hope he will listen carefully. I think these feedbacks can represent how people think and I am rather impressed.

A member of the public who claims to come from the grassroots is now watching the debate of the Budget. He said, "I operate a small business and I have to bear the high rents; I bear the fact that wheeled suitcase has 'rolled over' my feet every day; I bear the fact that I cannot get on the MTR train; even with an increase in train frequency, there is always someone, including pregnant women, who get caught between train doors, we have to bear with it. In the shop next to me, each week there are two to three cases involving Individual Visit Scheme (IVS) visitors who steal mobile phones, urinate or defecate in public, jump the queue, or scold the salesperson for not being able to speak Putonghua. In fact, 11970 LEGISLATIVE COUNCIL ─ 22 May 2014

Hong Kong people can speak Putonghua, but they just don't feel like to talk to IVS visitors. When IVS visitors pay for things they buy, they act like giving money to beggars. Hong Kong people can only submit to this humiliation. As our dignity and prospects are in your hands, please try your best. I understand that staging a filibuster requires a lot of effort and I hope you will try to get more rest." I will skip the part that follows. But the last sentence is touching: "Hong Kong is our home; our culture is the fruit of the hard work of the previous generations, but we are now being trampled by IVS tourists. We who were born in the 1980s are now being disturbed by IVS visitors."

I already have no hope in the "Secretary Name Card" who acts primarily out of political considerations. But I hope that Members in this Chamber, as well people with power in different sectors in Hong Kong, especially government officials and civil servants, and those with some conscience, compassion, feelings and ability, can understand the views of this member of the public. Chairman, I do not know him personally; I have just received his message and I am impressed.

Chairman, next I would like to talk about a very controversial measure in the Budget which I have been opposing for years, that is, rates concession. This is related to Amendment No 1021 which aims to reduce head 162 by $770,000. The amount reduced is equivalent to the annual estimated expenditure for the Rating and Valuation Department (RVD) to re-print the pamphlets to be attached to the rates demand notes to explain the new rates concession arrangement. The amount involved is $770,000 which is rather small. But why do I propose to reduce it? Though we have proposed other reductions in respect of the whole Budget, this reduction can best represent our stance against the rates concession arrangement.

For years, I have been criticizing the rates concession arrangement for "fattening the top and thinning the bottom". This is a policy under which the benefits are transferred to the powerful and wealthy. It seems that the concession is fair as every residential unit is entitled to a concession of rates for two quarters (four quarters in previous years). All flat owners will have their rates waived subject to a ceiling. But the problem is, the more properties one owns, the more concessions he will get. Years ago, I raised a question in the Legislative Council about the amount involved in the top ten cases which got the most concession. I was shocked when I learned about the figures. Two years ago when rates concession was first introduced, the company (a large landlord) LEGISLATIVE COUNCIL ─ 22 May 2014 11971 which got the most concession had an amount of some $90 million waived; the amount waived was some $60 million last year and some $30 million this year. In other words, one single company has already been granted rates concession of almost $200 million over the past three years.

The rates concession arrangement has been implemented since 2007. According to the research conducted by Research Office of the Legislative Council, with the package of one-off relief measures introduced from 2007 to 2013, private properties owners have gained a total of $63.1 billion through the rates concession while the amount received by the low income group was only $8.5 billion. Though the relief measures for the two groups are different, in comparison, the amount of rates waived is six times the amount received by the low income group through various concessions and subsidies. Certainly some middle class people own one to two properties and they may get some sweeteners as a result. But the amount is minimal when compared with the concession granted to those wealthy people and large real estate developers. In terms of resource allocation, a difference exists between the total amounts of $63.1 billion and $8.5 billion.

In addition, when we look at the amount gained by the biggest beneficiary group as well as their background, we can see that the arrangement is obviously a transfer of benefits to consortia. We often point out that these public policies seem fair and just, but when they are implemented in Hong Kong, they do not work. The economists in Hong Kong are mostly believers in liberalism who always emphasize on the free market. If they conduct a detailed study, they would realize that the taxation policy under the free market, which appears to be fair and just, is actually tilted and biased towards certain classes.

The research conducted by the Research Office of the Legislative Council is neutral, which only makes a statistics on the figures over the years and a brief analysis with tables. The bias towards certain classes is my own interpretation and conclusion. However, when we look at the figures, it is obvious that people with more properties, power and financial capacity can get more benefits from the Budget when compared with ordinary people. This is a legitimate transfer of benefits through public policies and public finance management.

Earlier, when I had a chat with some officers of law-enforcement agencies, I pointed out that as far as I know, some legitimate transfer of benefits in the past were blatant. For example, some retired civil servants set up a consultant 11972 LEGISLATIVE COUNCIL ─ 22 May 2014 company after the sanitization period and signed a three-year consultancy contract with a company on the provision of certain services. However, that company unilaterally terminated the contract after three months and made a compensation of the three-year consultancy fee in accordance with the contract. It is legitimate for such consortia to compensate the company set up by retired civil servants in accordance with the contract. This cannot be traced as these consortia sign many consultancy contracts every year. As long as everything is listed in the yearly report, how can they be held liable? The amount of compensation for private consultancy contracts is also legitimate and not traceable. There is no evidence to show any illegitimate acts. But in essence, the arrangement is exactly the offer of deferred benefits from a consortium to retired senior government officials.

That is why Donald TSANG could reap benefits at sea, on land and in the air. Accompanied by the boss of consortia, real estate developers and wealthy people, he enjoyed the yacht ride, went to Japan and other places for shopping and drank red wine. Later, he transferred benefits to big consortia through his policies. If Members in this Chamber do not step up monitoring through public policies to curb the collusion between business and the Government and the transfer of benefits, senior government officials will do whatever they wish.

The Chairman has already cut off the filibuster. But for two consecutive years, I have in fact repeatedly advised and warned the Financial Secretary that he must discontinue the tax rebates and rates waiver; otherwise the People Power will definitely try every means to obstruct the passage of the Budget, and will take the same action next year. I have to warn the Government not to think that it can do whatever it wishes so long as the Chairman is here to cut off the filibuster. While there are various means to stop me, such means will only trigger our creativity. Two years ago, nobody would have imagined that the Council could be paralysed by staging a filibuster. Who knows what tricks we will use next year? By then, some members of the public may have occupied the Legislative Council to obstruct the passage of the Budget, just like what happened in Taiwan.

On the rates concession arrangement, I have proposed two years ago that if concession is to be made, the Government should try its best to avoid a blatant transfer of benefits. If the Government intends to help the middle class, it should impose a more reasonable condition that each owner or company may only get rates waiver for a maximum of two properties. It is really unreasonable LEGISLATIVE COUNCIL ─ 22 May 2014 11973 for a company to get rates waiver of some $90 million. However, the Government refuses to adopt this practice and continues to transfer benefits blatantly. Hopefully more academics will made independent comments and analyses so that the Government will try to restrain its rampant behaviour. Such ingratiating attitude towards real estate hegemony and such blatant transfer of benefits are shameful. If the Government is allowed to continue acting like that, it is also a shame of the Council.

Chairman, next I would like to talk about Amendment No 884 which aims to reduce head 152 by $655 million. The amount reduced is equivalent to the annual estimated expenditure for the Commerce and Economic Development Bureau (Commerce, Industry and Tourism Branch) on the subvention of the Hong Kong Tourism Board (HKTB). Many Members have already talked about the performance of the HKTB and the harms brought about by the IVS, and therefore I will not repeat. As what I have suggested to the Commissioner for Tourism over the past years, the Government should not develop tourism solely for foreign visitors, but also for Hong Kong people. This is basically the biggest problem of the HKTB. I often comment that Hong Kong people are not provided with any tourist attractions. The Government should develop more tourist spots so that Hong Kong people will be given more options.

Just now I mentioned that I once suggested the Government to develop an ecological, historical and cultural tourism circle in Mui Wo so that people may stay there one or two days to review the history. They may review how Emperor Bing in the Song Dynasty fled to Hong Kong, take a look at the Silver Mine cave, or enjoy themselves in the beauty of butterflies and insects. Lantau Island is a treasure of nature with countless insects and plants that are beyond our imagination. A number of rare insect species in the world, especially beetles, are only found on Lantau Island. Recently some rare species of firefly are discovered there. To add more diversity and delight to the life of Hong Kong people, the Government has to develop more scenic spots to stimulate local economy. The conservation of local culture, history and ecology can help Hong Kong people enhance their understanding of the local characteristics, thus strengthening their sense of belonging to the local community.

I have pointed out many times that if one has seen the buffalo in Pui O, he will be surprised by the beautiful and lovely ecology in Hong Kong. There are in fact a lot of such scenic spots in Hong Kong but the Government often condones the illegal construction of houses by landowners, thus damaging the natural ecology. In fact, the indigenous residents should treasure our history. 11974 LEGISLATIVE COUNCIL ─ 22 May 2014

While they often advocate the protection of villages and clans, they just allow the tradition to extinguish. For example, the unauthorized erection of six-storey village houses has disrupted the characteristics of villages. To truly protect the villages and clans, we should safeguard the local history and local characteristics, instead of destroying everything in return for money.

As I do not support the development strategies and the focus of work, I support the amendment to deduct the expenditure for the HKTB. I do have other reasons and I will talk about them later when I have time. In particular, I will express my strong views on the problem of an increasing number of tourists and I will further comment on the problems concerning the cruise terminal.

CHAIRMAN (in Cantonese): Mr CHAN, your comments on the tourism policy are really meaningful. But as pointed out by Mr James TIEN, Members should seek other opportunities to have in-depth discussions on the tourism policy of Hong Kong. Will Members please try to speak on the amendments covered under this joint debate.

MR JAMES TIEN (in Cantonese): Chairman, I am sorry, just now I hear you say that we should not talk about the deduction of the estimated expenditure for the Hong Kong Tourism Board (HKTB), however, as I have in fact prepared one to two points to respond to the comments made by several Members just now, particularly in respect of sustainable tourism and an excessive number of tourists, and so on, I would like to make a short speech with your permission.

Chairman, the term "sustainable tourism" does not have a definition. I learnt about this point when I was the Chairman of the HKTB. I do not know about this because I do not have any tourism-related business, I have not operated travel agencies and hotels and have not invested in airlines.

The meaning of "sustainable tourism" varies from place to place. Let us take Hawaii as an example. There has been no significant change with this place since I went there on my way to the United States to pursue my studies in 1963. There are a beach, a forest and two big islands, forming the "sustainable tourism". "Sustainable tourism" in Hawaii does not mean people buying clothes of well-known brands and expensive jewelry in Hawaii, but buying local products.

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Speaking of sustainable tourism, I think of the Great Wall in Beijing. To ensure sustainability of the Great Wall, people's access should definitely be restricted. If free access is allowed without appropriate protection, the Great Wall will be damaged sooner or later. Let us look at another example, the Egyptian pyramids. There are various restrictions, if the number of people visiting these antiquities and monuments are not restricted, sustainability can never be achieved.

In Hong Kong, we do not have many monuments when compared with the overseas places I have just mentioned. The HKTB finds that programmes such as visits to the Northeast New Territories and the Outlying Islands, cycling tours, and so on, are not really effective as they can only attract very few people. Also, many people have difficulties in going to the heritage sites in Hong Kong, such as the hexagonal rock columns near Tai Long Sai Wan which have been recognized by world-class heritage protection organization. Most visitors will just take a boat to see the rock columns. If people go by land transport to Tai Long Sai Wan to see the hexagonal rock columns, the green groups will have strong views.

Of course, the Government may promote the visit to the hexagonal rock columns near Tai Long Sai Wan. However, if visitors have to travel a long way, say go to the restricted area by taxi or by bus, walk to the East Dam in Sai Kung and then walk uphill to reach the hexagonal rock columns, they would rather go shopping instead of visiting the site. Therefore, from the perspective of tourism promotion, this proposal may not work. There are reasons leading to the success of overseas countries in this respect.

Chairman, some Members query whether there are too many visitors coming to Hong Kong. Fortunately, I am no longer the Chairman of the HKTB when this problem arises, roughly since this year. When I was the Chairman of HKTB, how did overseas countries deal with this problem? New York, London and Paris also have a lot of tourists. Now, we consider that the number of tourists has saturated and we can no longer cope with them, how then do other places handle the problem? I have never heard that Paris will drive tourists away because there are too many visitors. If too many people visit Paris, they cannot reserve hotel rooms. As a result, the hotel room rate in Paris will escalate. At present, even if you pay as much as 500 Euros (that is HK$5,000), you still cannot get a room in a relatively high-end hotel. For example, the Georges Saint Hotel charges 1,000 Euros (that is HK$10,000) per night. Visitors actually cannot afford to stay in the hotel for several nights. In addition, 11976 LEGISLATIVE COUNCIL ─ 22 May 2014 you have to pay 30 to 40 Euros to take a taxi from the suburb to the city centre of Paris, but the distance is actually shorter than going from the Chek Lap Kok Airport to the urban area in Hong Kong. Moreover, restaurants in Paris are more expensive than those in Hong Kong.

Therefore, with increasing expenses in all these areas, visitors …

(There were some noises)

CHAIRMAN (in Cantonese): Mr TIEN, please hold on. What kind of noise is this?

MR JAMES TIEN (in Cantonese): Chairman, no problem. In order not to waste time, I can continue.

CHAIRMAN (in Cantonese): Mr TIEN, please continue.

MR JAMES TIEN (in Cantonese): Okay. Overseas countries need not explicitly state their intention to "select clients". While well off visitors will visit Paris, those who cannot afford the hotel room rate, transportation and meal expenses will certainly not go to Paris. Paris has never restricted the number of visitors to 50 million a year. Has London imposed this restriction? No, it has not. What about New York? It has not. How do local residents look at the problem? Have members of these communities driven tourists away? I have not seen such a situation.

In my view, whether there are too many tourists and whether we should set a limit … If Hong Kong does not want so many visitors, the simplest way will be to stop hotel development. There are views in the community that we should have additional supporting facilities and hotels (such as shopping malls near the boundary areas), but these measures will only further push up the number of visitors. If members of the public generally think that we need not increase the number of tourists, we should stop building shopping centres. The situation at the boundary areas is a separate issue, because visitors will leave immediately after shopping and they will not go to the urban areas.

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Chairman, I remember that we had discussed this issue when I was the Chairman of the HKTB. In 2003, the SARS broke out. When the Individual Visit Scheme was implemented ― Mrs Selina CHOW was the Chairman of the HKTB at that time ― the community hoped that tourists would not come to Hong Kong just for shopping and then left. They hoped that tourists could visit other places in Hong Kong for spending. If the proposed shopping malls at the boundary area are constructed, the other places in Hong Kong will not be benefited because visitors will only go shopping at these malls and will not go to any other places in Hong Kong. Shops and restaurants in other places of Hong Kong cannot be benefited. Is this what we want?

If we stop constructing hotels or shopping centres because we do not want a further increase in the number of tourists, Hong Kong will certainly reach its receiving capacity. If we set a limit to the number of visitors to Hong Kong, I do not think this is appropriate. Given the above reasons, let me return to the subject. In my view, at present the HKTB should not just sit back and do nothing. Although there are views in the community that there are too many tourists, should we ask the HKTB to sit back and do nothing? If the HKTB does not promote tourism, what task should it undertake? In fact, we need not argue whether the funding of more than $600 million should be allocated because the only responsibility of the HKTB is to promote tourism of Hong Kong to overseas countries.

In view of the huge number of tourists, there is another saying in the community that the HKTB should be dissolved. Since the main task of the HKTB is to promote tourism and boost the number of visitors to Hong Kong, given that the society does not want so many visitors, the HKTB thus needs not exist. Regarding this argument, I have different views. I think the HKTB should work for quality rather than quantity when promoting tourism of Hong Kong. It should focus on attracting quality tourists to visit Hong Kong. The supporting facilities in Hong Kong will then adjust accordingly. With rising hotel room rates and meal expenses, tourists with less financial means will certainly not come to Hong Kong. Regarding the questions of whether the number of tourists is excessive and whether we should set a limit to it, I have different views.

Given the above reasons, I do not support the amendment proposed by several Members on reducing the estimated operation expenditure of the HKTB under the relevant head of expenditure.

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CHAIRMAN (in Cantonese): Does any other Member wish to speak?

MR LEUNG KWOK-HUNG (in Cantonese): In response to your appeal, I am not going to talk about tourism.

Secretary Prof K C CHAN is now present and cupping his chin. I am about to criticize him. Of course I seek to deduct the estimated expenditure on his emoluments, which is under "Head 147 ― Government Secretariat: Financial Services and the Treasury Bureau (The Treasury Branch)". Why do I seek to do so? In fact, both the Financial Secretary and the Secretary have their own duties. The Secretary should assist the Financial Secretary in handling the work in three major aspects, one of which is to regulate the financial market of Hong Kong. Chairman, we issued a report after the Lehman Brothers (LB) Incident, pointing out that there were a lot of investment pitfalls in respect of financial investment, and regulation was warranted. I am not going to talk about the report in detail here.

We have proposed the "twin-peak approach" because subjecting one industry to two regulatory authorities did not work. Under the "twin-peak approach", the two regulators should focus on their own regulatory functions and must not mix up such functions. In other words, during the regulatory process, the two regulators cannot transfer some of their regulatory functions to the other party for execution or handling. For example, regarding the derivative products sold by banks, the Hong Kong Monetary Authority (HKMA) is responsible for conducting investigations; but after investigation, it cannot take any further action. It has to report the case to the Securities and Futures Commission (SFC). Without the instruction of the SFC, the HKMA cannot take any action. Hence, when two parties are involved in the same job, both of them cannot do it well.

The SFC proposed many reform measures in its report submitted after the LB Incident, one of which is called the "twin-peak approach". It is "the regulatory approach that has attracted more attention recently". The report was submitted to the Government in December 2008 for consideration soon after the LB Incident. It was pointed out that the proposed system was characterized by "a separation of regulatory functions between two regulators: one that performs the safety and soundness supervision and one that focuses on conduct-of-business". It was recommended that "the government considers whether the current regulatory structure is best suited to facilitate Hong Kong's LEGISLATIVE COUNCIL ─ 22 May 2014 11979 further development as an international financial centre". In the previous term of the Legislative Council, the Subcommittee had spent a very long period of time on the investigation. However, has the Government done anything after listening to our recommendations? The Government has set up the Financial Dispute Resolution Centre, but it is not effective as only 40 cases have been received since its establishment. In other words, it wastes resources.

Why do I propose to deduct the estimated expenditure for the Secretary's emoluments? First of all, he is well known for his belated awareness. He said that he had no idea about the LB Incident. He was only aware of the situation after the occurrence of the incident. This shows that he failed to discharge his duty to assist the Financial Secretary in monitoring and ensuring the stability of the financial institutions in Hong Kong in a timely manner. The Financial Stability Committee under his chairmanship is responsible for discussing the latest development regarding the financial market and regulatory issues, and monitoring the overall operation of the financial system in Hong Kong. However, it is a pity that since he took office in 2007, his awareness in respect of the LB Incident was belated.

Of course, this is understandable because he only assumed office in 2007. Being a scholar who just joined the political circle, he dared not speak out even if he wanted to, and it was not surprising that he was not aware of the situation. We can forget his fault in that incident, but the problem is, what has he done after the incident and what reform has he made? Basically he has done nothing. We hope that he can implement the "twin-peak approach" in order to address the difficulties we are facing, but he has not done anything.

Secondly, he is responsible for monitoring the insurance industry. Last week … Mr CHAN Kin-por is the representative of the insurance industry. Secretary, Mr CHAN Kin-por is in fact not a member of the insurance sector. He is not engaged in the insurance business. He is selected by some "dead people" ― the body corporates ― and becomes the representative of the sector. After the LB Incident, derivative products have been sold as an insurance product. This is a very serious problem. I have pointed out time and again that the Independent Insurance Authority is another organization under the purview of the Secretary, but how come products that are prohibited to be sold by banks can be sold by the insurance sector? The reason is that the insurance sector is actually an area where different products have free access to it. We have meeting records. I hope my conjecture is wrong, but the problem will someday 11980 LEGISLATIVE COUNCIL ─ 22 May 2014 recur in the insurance sector. Today, in late May 2014, I hope my conjecture is wrong, but financial crisis will occur once every few years.

In addition, I think the Secretary has not done any work. The Financial Services Development Council (FSDC) is a case in point. I am not sure if he agrees, but the FSDC is apparently a product of LEUNG Chun-ying's rascal practice ― I do not mean to insult illegitimate child ― it is a "son of a bitch". The expenditure of the FSDC is not huge but it is on the increase. In response to my question, the Controlling Officers concerned advised that the expenditure of the FSDC in 2013-2014 (that is last year) was $2.6 million, and its estimated expenditure in 2014-2015 is $6.5 million, which represents an increase of more than 100%.

What is the work of the FSDC? According to the reply given by the Controlling Officer, "The main objective of the FSDC is to consult the industry and formulate proposals to promote the further development of Hong Kong's financial services industry and map out the strategic direction for development … there is no overlapping of roles and functions among the FSDC, the Government and the financial services regulators and organizations". This is worth noting.

Then what exactly is the work of the FSDC? Let me explain further. Secretary, the FSDC is actually a "territory", because under the monopoly of the "Monetary Czar", nobody can join in. Now, let me use some real data to analyse the work of the FSDC. According to the Chairman of the FSDC, its reports cannot be earthshaking. Since it is not earthshaking, and the tasks mentioned are not well understood by us, I must of course hold the Secretary responsible as he is responsible for monitoring the FSDC. The FSDC had submitted a report, but the industry considered the report uninspiring. Mrs Laura M CHA said, "Since most of the recommendations proposed in the report are based on the views given by the trade, they are not something new, so it cannot be earthshaking".

Then why did the Government set up the FSDC? In fact, the FSDC is set up with a similar nature as the HKMA. It will someday overtake the HKMA and become its rival or an organization to check and balance against the HKMA. Let me talk about the background of the FSDC. There are three persons in the FSDC …

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CHAIRMAN (in Cantonese): Mr LEUNG, what is the relevance of what you are saying to the amendment?

MR LEUNG KWOK-HUNG (in Cantonese): The two are related. The Chairman of the FSDC said that there is nothing special with the work of the FSDC. They are not doing some earthshaking work; they just collect opinions from the trade. If this is the case, why should we allocate $6.5 million to the FSDC? Better give me the money instead!

Another problem is that the FSDC has real power. Let me give an example. The FSDC had previously proposed a suggestion which even frightened property developers. We can see how cunning LEUNG Chun-ying is. He wanted an organization appointed by him to raise views and implement policies. Let me quote a press report, "The FSDC, established under the promotion of Chief Executive LEUNG Chun-ying, has recently recommended to the Government to relax the investment regulation over the Real Estate Investment Trusts (REITs), thereby allowing REITs companies to use over 10% of their total assets to acquire land, engage in rental housing development. Also, the SFC started yesterday a public consultation on some of the suggestions made by the FSDC. Mr CHIU Kwok-hung, Justin, the Chairman of Fortune REIT and the Executive Director of Cheung Kong (Holdings) Limited, expressed different views yesterday …"

This is actually a proposal turning a property rental company into a property developer, but this is not going to work because different regulations will apply. If The Link Real Estate Investment Trust becomes a property developer, it will be subject to the regulations related to property development. This involves the starting up of another business, but we have to foot the bill, and … Chairman, you have just interrupted me. Why should I be bullied by you today? Let me read out the information of the FSDC members. I am not sure who made the recommendation. "Apart from the three supporters of LEUNG, the membership of the FSDC includes Mr LEE Kwan Ho, Vincent Marshall, Independent Non-executive Director of the Hong Kong Exchanges and Clearing Limited; Mr Laurence LI Lu-jen, member of the 30SGroup"…

CHAIRMAN (in Cantonese): Mr LEUNG, the information you are reading is irrelevant to the amendments.

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MR LEUNG KWOK-HUNG (in Cantonese): Why are they irrelevant? I am now censuring the FSDC for wasting our money, and the Secretary is turning a blind eye to this. Should something happen due to his indifference, who should be held responsible? Chairman, please be aware that the problems are too numerous to recount. I have on hand a whole set of information. I only just read out the part on the FSDC. There is too much information on derivative products, and members of the public may not understand even if I read them out. I also have difficulties in understanding …

CHAIRMAN (in Cantonese): Mr LEUNG, what is the relevance of the identities of the FSDC members to your request for deducting the estimated expenditure?

MR LEUNG KWOK-HUNG (in Cantonese): We cannot allocate an extra $4 million on top of the $2.5 million for establishing a platform, whereby this group of people can manipulate powers for personal ends and do something that we cannot monitor. Chairman, if you do not stop me and let me read out the information, you will understand. "… and Ms Jeanne LEE, Chairman of the Hong Kong Securities Professionals Association. A number of members belong to the princeling party or are related to China-affiliated organizations, they including President of China International Capital Corporation Limited Mr Levin ZHU who is the eldest son of the former Premier of State Council Mr ZHU Rongji; Deputy Chief Executive Officer of BOCI Mr TSE Yung-hoi; Chief Executive Officer of China Everbright Limited Mr CHEN Shuang, the former Chairman of China Merchants Bank Mr QIN Xiao, President of China Life Insurance … Mr Anton LIU Tingan, and so on". These people have successfully enhanced their positions by stepping on the FSDC, an unauthorized structure which will possibly suppress the HKMA. The original intent of setting up the FSDC was to give it a certain amount of public funds for management, such as the "Future Fund".

Chairman, I make this speech not because I do not want to allocate some $6 million, but I consider it unreasonable to offer a platform for some people to undertake some tasks that cannot even be regulated by the Secretary. If the Secretary is not satisfied, he can respond and explain the functions of the FSDC. If the FSDC is only responsible for collecting views from the trade, better let me take up the work! The FSDC is indeed a platform with real power which allows people belong to the princeling party can get a share of the pie in Hong Kong.

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CHAIRMAN (in Cantonese): Does any other Member wish to speak?

MR LEUNG KWOK-HUNG (in Cantonese): Chairman, I am getting out of breath because of your interruption. Please do a headcount first.

CHAIRMAN (in Cantonese): Will the Clerk please ring the bell to summon Members back to the Chamber.

(After the summoning bell had been rung, a number of Members returned to the Chamber)

CHAIRMAN (in Cantonese): Mr CHAN Chi-chuen, please speak.

MR CHAN CHI-CHUEN (in Cantonese): Chairman, first of all, I will briefly say a few more words on why I support Amendment No 884 proposed by Mr Albert CHAN ― to reduce the annual estimated expenditure on the subvention of the Hong Kong Tourism Board (HKTB).

Just now when we discussed whether a cap should be set on the number of Mainland visitors, Mr James TIEN said that no such cap is set in London and Paris. But do we know that Taiwan plans to set a ceiling on the number of Mainland visitors after reviewing its tourism supporting facilities and local receiving capacity? Funny enough, when overseas examples are invoked, very often only those that fit the purpose are cited, irrespective of the background. For instance, this morning LEUNG Chun-ying said that Singapore also imported labour. In fact Singapore also imports population and its population is mostly imported. The number amounts to 1.5 million, 1.2 million … right? However, when the subject of democracy is mentioned, they say that we should consider the situation of Hong Kong and the country, and should not casually cite examples of Europe and America.

The same applies to the problem caused by tourists. If there is a delay of some 10 minutes in the subway or train service in London and Paris, people will not become furious. In London, renovation work may result in the closure of the subway station for half a month or one month. Do we think we can do so in Hong Kong? Can we close the Causeway Bay Station and ask people to walk 11984 LEGISLATIVE COUNCIL ─ 22 May 2014 from Wan Chai or Tin Hau to Causeway Bay? Closure of one station exit will cause outcries and fights. Closure of a section of the escalator will be disastrous. Therefore, different places have different situations and conditions. When we discuss whether a ceiling should be set on the number of visitors, some people argue that as overseas countries have not set any quota, why should Hong Kong do so? Just take a look at the attitude of Hong Kong people towards the MTR; people wish to seize every minute and second, and they cannot tolerate missing a train or having to wait for another train. How can Hong Kong be the same as overseas countries?

The People Power's proposal of introducing an arrival tax on visitors is in fact the most moderate adjustment of the number of tourists. The proposal is not so resolute when compared with the measure of setting a cap or a quota. When facing with the disaster caused by the influx of Mainland visitors, the Government still refuses to adjust the proportion between Mainland and foreign tourists. At one time, it even intended to relax the restrictions on the Individual Visit Scheme (IVS); luckily the initiative was subsequently called off. Once the restriction is released, it will be impossible to tighten up again. Now LEUNG Chun-ying boasts that he called off the multiple-entry permit for provinces other than Shenzhen because of his far-sighted vision. In fact, in view of the recent conflicts between IVS visitors and Hong Kong people, other political parties, including pro-establishment parties, have also queried whether the multiple-entry permit, one-entry permit or the proposal of "12-entry in one year" should be withdrawn. They have proposed various means to force the Government to face up to the overcrowding problem in Hong Kong caused by IVS visitors.

However, the SAR Government has remained slow and unresponsive. For example, Secretary Gregory SO seems to be unaware of the problem and pretends to be deaf and dumb. The Government did not admit its fault until ZHANG Dejiang, Chairman of the National People's Congress took the initiative to ask the Hong Kong and Macao Affairs Office of the State Council to review Hong Kong's capacity in receiving tourists. After that, the Government has completely changed its attitude and admitted that the IVS has, to a certain extent, disturbed the livelihood of Hong Kong people. It stated that better understanding of public discontent caused by the exceeding number of tourists was required, and it would explore how to adjust and control the growth of tourists and their structure. Therefore, the whole SAR Government, from LEUNG Chun-ying at the top to Secretary Gregory SO who is in charge of tourism affairs …

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Therefore, we can hardly blame the HKTB. Just now Mr TIEN said that the HKTB is tasked to promote and advertise Hong Kong in different places of the world (including the Mainland and overseas countries). It has to tell the world how good Hong Kong is and welcome as many people as possible to visit Hong Kong. The HKTB has to meet the target. I agree to reduce the expenditure for the HKTB, so that it needs not place any advertisement this year. We can first observe and wait one year to see if the Government will introduce more comprehensive policies. We will then decide the way forward. I do not believe that placing no advertisement for a year will cause a slump in our tourism industry, especially in respect of Mainland tourists. There will be a natural adjustment. If the number of visitors drops gradually, we call it a soft landing. This may be a good thing, not necessarily something bad.

I often say that the structure of tourists is monotonous and too dependent on one single country. At the moment it depends on the Mainland China. In case there is any economic recession in the Mainland, 70% of our tourists will disappear all of a sudden, thus triggering a wave of company closures and the collapse of the tourism industry. On the contrary, by formulating a policy to adjust and control the number of Mainland tourists, and coupled with extra funding to the HKTB to force it to go to foreign countries… I understand that the HKTB has already done so, such as promoting Hong Kong in Russia and developing new markets. This will be more effective in enhancing the sustainability of the whole tourism industry of Hong Kong.

Let me get back to … I realize that I was only half way done on the amendment I mentioned at the very beginning, that is, Amendment No 79 on head 28 about reducing the annual estimated expenditure for the Civil Aviation Department (CAD). In the first half of my speech, I mentioned about the palace-like headquarters of the CAD, and I also suggested to reduce … yesterday I mentioned the Architectural Services Department and appealed for Members' support. In passing, today I have to point out that Amendment Nos 235 to 246 proposed by Mr LEUNG Kwok-hung are related to the Government Property Agency (GPA). As far as the case of the CAD is concerned, I think we should reduce the expenditure for the GPA as well, even if we only deduct a small amount.

What is the task of the GPA? Its mission is to meet the Government's needs for accommodation through optimal use of and necessary adjustments to 11986 LEGISLATIVE COUNCIL ─ 22 May 2014 the current stock; and to provide management services for government properties through the most cost-effective means available. If schools want to build one more staircase, widen the passageway or expand the staff rooms, they cannot do so because they have to comply with the regulation and restriction imposed by the GPA, which has stipulated all the standards and specifications, so that the provisions cannot be overprovided. However, how come the CAD headquarters can become a palace with a dance room equipped with mirrors on three sides and can even be used for ballet dance? I mention this point in passing and I am not going to talk about the GPA anymore.

Last time, I mentioned the three scandals involved in one tender exercise. Firstly, the CAD made a wrong purchase as the new Air Traffic Control system looks good but cannot be used; secondly, someone is alleged of transferring benefits, he signed the new contract on behalf of the CAD and subsequently transferred to another company with better terms of employment, and thirdly, the CAD has concealed the truth and condoned its staff by denying that Peter LEUNG Pui-kwong had taken part in assessing the tender. Those are the points I mentioned in the last round.

(THE CHAIRMAN'S DEPUTY, MR ANDREW LEUNG, took the Chair)

Next, I would like to talk about another dereliction of duty on the part of the CAD, that is, the security loopholes of the radar stations. Earlier, the media disclosed the security loopholes and maintenance problems of the two radar stations of the CAD located at Mount Parker, Quarry Bay. It turns out that the wire mesh encircling the stations are seriously rusted, resulted in a number of big holes. The stations are thus left unguarded as anyone can arbitrarily enter into the restricted areas. Radar stations are responsible for keeping track of the location, altitude and flight path of aircrafts entering and leaving Hong Kong's Flight Information Region for the purpose of air traffic control. The radar stations are enclosed by wire fences to guard against trespassers but they are left unmanned. The wire mesh attached to the main gate is seriously rusted, and the wires have become brittle and fallen to the ground like cloth scraps, thus creating big holes through which anyone can easily enter the radar stations and affect their operation.

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The annual estimated expenditure for the CAD exceeds $800 million. I cite the above example to illustrate that while its radar stations are not properly maintained, the headquarters complex is luxuriously built and renovated. As the CAD is attending to the superficial and neglecting the essentials, its expenditure should be reduced.

Next, the issue on the third runway. Currently 59.9 million passengers use the Hong Kong International Airport (HKIA) and some 4.12 million tonnes of air cargo pass through Hong Kong. The HKIA is connected to about 180 destinations, including around 44 in the Mainland. Over 100 airlines operate in the airport, providing over 1 000 flights each day. Earlier, the Government has proposed to build a third runway as the HKIA will reach its maximum capacity. We oppose the construction of the third runway. There are views that the problem can already be addressed by reducing runway occupancy time. In response, the CAD argues that runway occupancy time for a flight is 50-odd seconds at the moment. Even if the time is reduced to 50 seconds, it is estimated that the number of flight movements per hour may only increase by one to two. Therefore, the proposal will only have minimal effect.

Under the dual runway system, the HKIA is originally designed to handle more than 80 flight movements per hour. But in practice, it can only handle 68 movements per hour. In the view of the CAD, the number of movements can be substantially increased to 102 per hour only if a third runway is built. However, it is pointed out by experts that there is an altitude constraint in the airspace within the Pearl River Delta region known as the "air wall", which caps the altitude of aircrafts at a certain level. As a result, outbound aircrafts to the Mainland have to make a detour and ascend to the appropriate altitude before re-entering the Pearl River Delta region. If such problem is not addressed, the addition of a third runway to increase flight movements will not be effective.

Certainly there is another concern on noise. Earlier, some organizations monitored the noise level in areas that are mostly affected by aircraft noise ― Tung Chung, Ma Wan, Kwai Ching. Among them, Park Island has recorded the highest flight movements of 955, making a noise level beyond 70 decibels. On Conduit Road at the Mid-Levels which are near the flight paths, such as Fairmont Gardens, Jardine's Lookout and Mount Butler Road, residents are also exposed to excessive noise. The CAD advised that in order to reduce aircraft noise and minimize the impact of aircraft noise on the community near flight paths, a series 11988 LEGISLATIVE COUNCIL ─ 22 May 2014 of noise mitigating measures were introduced in earlier years. These include: avoid aircraft overflying more densely populated areas in the early hours; as far as possible flights departing between 11 pm and 7 am are arranged to use the southbound route, whereas flights arriving Hong Kong between midnight and 7 am are arranged to land from the southwest; and all aircrafts which have a higher noise level are banned from landing and taking-off at the HKIA. Notwithstanding these, during those hours, aircraft noise still disturbs a lot of residents who find it hard to fall sleep.

Therefore, aircraft noise has been causing nuisance to the residents living near the flight paths. The construction of a third runway to increase flight movements will aggravate the problem. In addition, some green groups criticize that reclamation works will destroy the ecology in the waters south of the Brother Island, thus posing a direct hazard to the Chinese White Dolphins, a national first-class protected species. When we discussed issues such as artificial islands at the meetings of the Panel on Development, we also noticed that the Government did not seem to care much. The Government should be held responsible for the extinction of the Chinese White Dolphin, which is the mascot of the handover of Hong Kong. The Chinese White Dolphins used to be found in the waters near north Lantau Island. But with increasing reclamation works which have changed the marine ecology, the number of these dolphins has reduced by half in recent years. It is estimated that the building of a third runway will need to reclaim an area of 650 hectares right in the natural habitat of Chinese White Dolphins. This may bring the dolphins a step closer to death.

Some time ago, the International Civil Aviation Organization has pledged to curb the rising carbon emission level of civil aviation starting from 2020. To this end, it has agreed to set up the global carbon trading market in which airports and airlines have to pay for each tonne of carbon emission for every development they make in the future.

The addition of a runway will increase the greenhouse gas emitted by aircrafts and in turn carbon emissions, thus aggravating our climatic problem. This is inconsistent with the concept of sustainability and may incur considerable economic costs. Just like the tourism industry which I mentioned just now, if we only focus on making money without paying regard to sustainability, the implementation of the policy will not be feasible.

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Therefore, I propose to reduce the annual estimated expenditure for the CAD to show our disapproval of this "independent kingdom" for abusing power for personal gains, transferring deferred benefits, intentionally withholding facts, building a third runway to destroy the environment, focusing only on development without paying regard to the impact on the nearby ecology. These are not acceptable to the public. With respect to the CAD, I have put forward a total of five amendments, that is, Amendment Nos 79 to 83. I hope colleagues will give their support.

MR ALBERT CHAN (in Cantonese): Deputy Chairman, there are only five persons in the Chamber including you, and I am very tempted to request a headcount. But in order to deliver my speech, I have to control my impulse.

Deputy Chairman, just now we have said a lot about the Hong Kong Tourism Board (HKTB) and the Tourism Commission (TC), especially the "Secretary Name Card". Mr CHAN Chi-chuen has highlighted, in particular, the problem of aircraft noise. I have mentioned this point when I spoke earlier. I just want to say, regarding the re-routing mentioned by Mr CHAN Chi-chuen, it was not a voluntary act initiated by the Civil Aviation Department (CAD). Rather, the CAD was forced to use the present routing owing to the strong resentment of residents living in Tsuen Wan, Kwai Chung, the outlying islands and Sha Tin. Some residents in Sha Tin are familiar with civil aviation management, and they may be pilots themselves. However, as I have said, the re-routing has not reduced the overall noise level, instead, the noise level has doubled.

Also, Mr CHAN Chi-chuen mentioned the levy of carbon tax. Yet, this will not help improve air quality because even if we buy back the takeoff and landing rights, the health of Tung Chung residents or those living along the flight paths will certainly be adversely affected. Therefore, the imposition of carbon tax will not help improve or resolve the air pollution problem caused by aircrafts. I have already provided some data to show how the increased aircraft movement has aggravated the air pollution problem in Tung Chung. Although this does not fall under the portfolio of Secretary Prof K C CHAN, I wish he would understand that economic development only enables businessmen to get rich. Most airline bosses do not live in Tung Chung, those who suffer are the tens of thousands of Hong Kong people. Though huge profits can be made, one can never buy back health.

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Deputy Chairman, I will continue to speak on the expenditure under "Head 152 ― Government Secretariat: Commerce and Economic Development Bureau (Commerce, Industry and Tourism Branch)". The relevant amendment proposes to deduct $655,729,000, which is equivalent to the annual estimated expenditure for HKTB's subvention of the Commerce and Economic Development Bureau (Commerce, Industry and Tourism Branch). Deputy Chairman, the reason for proposing this amendment is that in promoting tourism, even if we cannot make our tourism initiatives become world famous, they should not bring disrepute to Hong Kong. Take for example the concert organized to boost local economy after the outbreak of SARS, though the Rolling Stones was invited to perform, the event brought disrepute to Hong Kong. This is attributable to administration blunders, or "specialists led by laymen" as we often say. As government officials lack a sense of crisis in many respects, they have completely failed to keep tab on public views and sentiments, and allow property developers to do whatever they want, they have brought disgrace to Hong Kong.

In 2011, the website CNNGo conducted a survey titled "World's worst tourist traps". Can Members guess which Hong Kong tourist spot has brought disrepute to Hong Kong? It is the Avenue of Stars. Among the world's 12 worst tourist traps, the Avenue of Stars ranked the second. This "Pearl of the Orient" is really awesome to have the Avenue of Stars be named a tourist trap. People who have been there would not want to go there again. One of the reasons is that the place is too commercialized. Those who have been there would know. Being responsible for the design and arrangements, the Government should ensure that the facility meet the basic requirements and would not be unacceptable to people. However, as Members may be well aware, the Avenue of Stars is located within the premises of the consortium which is a staunch supporter of LEUNG Chun-ying. Therefore, although government officials are aware that the place has become too commercialized, they dare not utter a word.

This is the inevitable evil arising from collusion between the Government and the business sector, and small-circle election. Having supported "689" to become the Chief Executive, some people demanded rewards. Although this survey was conducted by the CNNGo before "689" was elected the Chief Executive, he was the convener of the Executive Council at that time and had important status and power. It is also possible that those consortia had closer relations with other senior government officials than with "689", because as we LEGISLATIVE COUNCIL ─ 22 May 2014 11991 all know, a senior official had been appointed by a consortium to look after its Mainland properties upon retirement. When dealing with Hong Kong properties, the retired official would certainly help the consortium by cashing in on his established ties and knowledge. To monitor or prevent corruption arising from such complicated relations, the formulation of guidelines or internal regulations alone is not effective. Recently, there are many corruption cases, and the persons involved include the Chief Executive, former Chief Secretary for Administration, former Commissioner of the Independent Commission Against Corruption, as well as some retired senior government officials. The result is more alarming than the survey conducted by the CNNGo.

The abovementioned survey pointed out that the Avenue of Stars was too commercialized, and the overall environment was uncomfortable. As Members may be aware, the place is jam-packed with Mainland tour groups, and tour guides use loudhailers to brief the tourists. As the place is small and with no cover, people feel uncomfortable. While it is comfortable and delightful to stroll along the waterfront of the Darling Harbour in Sydney, the promenade of Tsim Sha Tsui, especially the part from the Avenue of Stars to Tsim Sha Tsui East, has failed to give people a sense of comfort and delight. The concrete avenue makes people feel suppressed and the noise nuisance is disturbing. The wooden promenade of the Darling Harbour, on the other hand, is close to the harbour and spacious, such that open cafes can be set up. It gives people an impression that the overall environment and the harbour have integrated to become one.

When Legislative Council Members went overseas to conduct duty visit, they will draw reference from the design of other places. Let me talk about Darling Harbour again. Its design seeks to integrate people with the harbour, allowing visitors to listen to the whisper of the waves by minimizing the distance between them. Visitors may also feel the vitality of the harbour by becoming part of it. Light breezes and the taste of seawater together feature the beauty of nature. Contrarily, Hong Kong's Avenue of Stars only gives tourists an impression of filthy commercialization, which is disgusting. I have a feeling that the erection of Bruce LEE's statue on a concrete promenade is, after all, a means to make money for the commercial organizations by cashing in on Bruce LEE's reputation. This is indeed an insult to him. The authoritative statue of SUN Yat-sen erected in the middle of the Sun Yat Sen Garden has nonetheless aroused great respect of tourists. The greatest shortcoming of the Avenue of Stars is that apart from being too commercialized, it has even debased Bruce 11992 LEGISLATIVE COUNCIL ─ 22 May 2014

LEE, a world renowned figure whom Hong Kong people are proud of, into a commercial product. This is too disheartening. Worse still, the HKTB and the Commerce and Economic Development Bureau has tolerated, condoned and encouraged this situation. We must therefore stand against this. But since this amendment proposed to deduct the relevant expenditure, I think many Bruce LEE's fans would strongly oppose it.

I am not going to elaborate on the numerous sins of this Policy Bureau, I will just give a simple example. Tourists, for example, have become parallel goods smugglers, and I think residents of the North District would have a lot to say about this. The number of tourists has been on the increase and the "multiple-entry permits" have become permits for parallel goods smugglers. Furthermore, publicity expenses have mostly been spent on overseas marketing. But unfortunately … In my opinion, publicity plans should not be blamed for the failure in publicity. This is because if consumers consider a product unacceptable, they will not accept the product no matter how it is packaged, beautified or exaggerated. In the past, especially before 1997, tourists liked coming to Hong Kong because it was one of the last British colonies in Asia, having unique history, culture and scenic spots. However, after Hong Kong became one of the Chinese cities, its culture, background and glamour as the "Pearl of the Orient" have vanished. Worse still, it has even become "Mainlandized" and this "Pearl of the Orient" no longer shines. This is precisely the adverse effect brought about by the "Mainlandization" under the control of the Hong Kong Communist regime.

As Hong Kong's status as a metropolis has degenerated, it is now a waste of money to launch overseas publicity. What should we promote? Should, we promote "689"? Should we ask the TIMES magazine to use him as the cover with the caption "Can he be trusted?"? The cover of the TIMES magazine is priceless and cannot be used as advertisements. What is more, the entire world has seen what "689" has done, it is therefore a waste of money to promote him.

Looking back at the previous year, the number of tourists from Europe, the United States, Australia and New Zealand has dropped by 2.2%, whereas that of Taiwan, Japan, Korea and South East Asia has slightly increased by 2.2%. While one group dropped by 2.2%, another rose by 2.2%. The greatest surge was definitely observed in tourists from China, reaching as high as 20%. There LEGISLATIVE COUNCIL ─ 22 May 2014 11993 is downright no need to launch publicity campaign. The "anti-locust" campaign is magnificent, Mr James TIEN also said that it has been successful in reducing the number of Mainland tourists. Therefore, we must highly commend the group of young people who organized this "anti-locust" campaign. They have made use of local forces to prevent Hong Kong from being turned red so rapidly. It would be difficult to stop Mainland tourist from coming in a broad-brush manner, but we can at least minimize the number.

Another issue is the cruise terminal. One major task of the HKTB in 2014-2015 is to promote Hong Kong as a Cruise Hub, but the terminal has turned out to be a world scandal soon after it was commissioned, with passengers queuing hours for transportation. The rigid bureaucratic system has hindered the implementation of many services. If we fail to perform, it is better for us to hide our weakness (The buzzer sounded) … Thus, the relevant expenditure should be deducted.

DEPUTY CHAIRMAN (in Cantonese): Mr CHAN, your speaking time is up. Does any other Member wish to speak?

MR LEUNG KWOK-HUNG (in Cantonese): Deputy Chairman, I request a headcount.

DEPUTY CHAIRMAN (in Cantonese): I cannot hear you.

MR LEUNG KWOK-HUNG (in Cantonese): I request a headcount.

DEPUTY CHAIRMAN (in Cantonese): Will the Clerk please ring the bell to summon Members back to the Chamber?

(While the summoning bell was ringing)

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DEPUTY CHAIRMAN (in Cantonese): Mr LEUNG Kwok-hung, please remove the placard; I cannot see if you are present.

(After the summoning bell had been rung, a number of Members returned to the Chamber)

DEPUTY CHAIRMAN (in Cantonese): Mr LEUNG Kwok-hung, you may speak now.

MR LEUNG KWOK-HUNG (in Cantonese): Deputy Chairman, I will continue with my last speech and talk about the amendment relating to Government Secretariat: Financial Services and the Treasury Bureau.

In fact, Secretary Prof K C CHAN has a very important responsibility. As I have just mentioned, after the outbreak of the Lehman Brothers (LB) incident, his duty was to assist the Financial Secretary in protecting the interests of investors, maintaining the status of Hong Kong as a financial centre and managing risks.

As I mentioned last time, after the LB incident and the publication of the Legislative Council's report and the report of the Securities and Futures Commission (SFC), he implemented the so-called "twin-peak approach" to replace the system of subjecting one industry to two regulatory authorities. He has done very little in this regard as I have already said. Nevertheless, there is a problem, that is, financial products are not necessarily sold by banks or by the Stock Exchange; they can be sold by the insurance sector after some packaging.

The Government has proposed the establishment of the Independent Insurance Authority (IIA) and the Office of the Commissioner of Insurance (OCI). First, let me talk about the functions of the IIA, the establishment of which was proposed in 2013 and its functions have significantly changed. In 2012, the Legislative Council had the relevant discussion and the Government conducted a three-month consultation on the legislation. In 2013, the Bill was introduced into the Legislative Council, with a view to establishing the IIA in 2015. The Legislative Council has certainly played a gatekeeper's role and the phrase "the competitiveness of the insurance sector in global market" was finally added to the Bill on the IIA.

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The composition of the IIA has also changed from including on the Governing Board up to two industry representatives to no less than two industry representatives. In other words, insurance practitioners will truly take up an important role in the Governing Board of the IIA and they have a say. The paper also proposed to include the right to suspend a licensee from carrying on a regulated activity for a specified period of time. This gave the IIA the right to order the insurance companies being investigated for dereliction of duty to stop selling products or order individual practitioners to suspend business. However, the above proposal was deleted after the consultation. We note that the problem with the LB incident was insufficient regulation. The insurance sector is currently selling some products that were regulated and could not be sold by banks in the past.

Let me give an example; I would cite the information on the Nova Investment Insurance Plan for potential insurance customers: "Reference funds, which are linked to the investment options available for selection, are the funds listed in the Investment Options Leaflet". These plans are tantamount to the so-called derivative products in the LB incident. This practice is similar to allowing banks to sell derivative products that customers had difficulties to understand under the securities legislation in the past. The IIA should be responsible to regulate this practice, and this is the task that should be taken up by Secretary Prof K C CHAN.

Regarding the Nova Investment Insurance Plan that I have just cited, there is one question: "Is there any guarantee of this product?" and the answer is "This product does not have any guarantee of the repayment of principal. You may not get back the full amount of premium you pay and may suffer investment losses."

This statement is similar to that adopted in the selling of LB or LB related derivative products years ago. In my opinion, after various regulations and studies, if we think these products cannot be sold by banks without being regulated, may I ask one very simple question, how come these products can be sold by the insurance sector? The insurance sector is selling the products which had caused great loses to small investors in 2008 or before 2008. These products are just like the LB bonds that we heard of back then. On this point, I think there is serious dereliction of duty on the part of Secretary Prof K C Chan because he is responsible for the regulation of these products.

11996 LEGISLATIVE COUNCIL ─ 22 May 2014

There is one other problem. Customers take out insurance by monthly payments in the hope that they would receive insurance compensations should mishaps happen, or they would like to get back some money to provide for old age after deduction of transaction fees from the amount they have saved. As we have currently observed, there is a kind of investment-linked life insurance, which means that there is an element of investment in life insurance and the percentage of investment will be decided by the policy holder. Let me read out the information concerning the trend: "According from figures from the OCI, the annual premiums of new investment-linked life insurance policies soared from $2.1 billion in 2001 to $9.7 billion in 2012". The increase is considerable. As I have just mentioned, "the operation of investment-linked life insurance is very complicated, involving dozens of fund choices; however, investors are not directly holding fund units, they only receive the shadow or derivative returns of the funds". In other words, the policy holders will receive the returns of the portfolio but not the funds. Of course, this involves very high risks and very complicated charges. Most people who take out insurance do not know how to do the calculations; for example, the amount of money they have invested, the amount of investment return they can receive in future, the ratio of the contribution made to take out life insurance, and the ratio used for investment. There is a lack of regulation in these aspects.

Furthermore, there is an issue of inconsistent information. I think the Government should adopt the measures taken after the LB incident to specifically require the relevant telephone conversation to be recorded. Moreover, the products can only be sold to customers after he has taken a detailed sales opinion tests, stress tests and risk tolerance tests. However, while the insurance sector does not have these requirements, the SFC and the Hong Kong Monetary Authority do not bother, hence the IIA has become the only regulatory body. There is virtually no regulation at the present moment.

We understand that these products are regulated by the IIA. While these investment-linked life insurance products are defined as insurance products under the law, they are in essence of the same nature as the structured investment products of the LB. The structured investment products can only be sold by SFC licensees but the current investment-linked life insurance products are not regulated by the SFC. The solution is simple. If we allow insurance companies to sell these products, they should either be directly regulated by the IIA or the IIA should be regulated by the SFC. The SFC has the powers to conduct investigation, as well as to rectify the mistakes and impose sanctions in the course of investigations and inspections.

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Deputy Chairman, why should I discuss this issue in detail? It is because I have noticed another risk: under the leadership of Secretary Prof K C CHAN, the IIA fails to regulate insurance companies selling products similar to the LB structured products that had once causes great harms. The structured products are sold in the form of insurance products. Should we have another financial crisis in future, we have to set up another select committee and conduct investigation under the Legislative Council (Powers and Privileges) Ordinance.

Many people may not understand what I have said today, but I hope the Government would understand. My conclusion is very simple; if the insurance sector can seek the consent of customers to allocate a portion of funds in their insurance schemes to buy structured financial products which may have higher returns, incur bigger losses, or even total loss, the IIA must regulate these products; or it must hand over the regulatory responsibility to the SFC, which is originally responsible for the regulation of structured derivatives. If the SFC cannot regulate these products, do not put them up for sale. The authorities should not repackage the investment products, which had caused global investors and small investors in Hong Kong serious losses four or five years ago and arrange to have them sold by the insurance sector.

I think Secretary Prof K C CHAN should have learnt a lesson regarding the LB bonds, and he should also know that the SFC and this Council have repeatedly criticized him for his belated awareness, and pointed out that the "twin-peak approach" should be adopted by banks selling these structured derivative products. The industry should not be subjected to two regulatory authorities. As such, why has he not taken action on regulating the insurance sector? I now understand why Mr CHAN Kin-por stood up and scolded me loudly the other day, it has something to do with interests.

The constituency that Mr CHAN Kin-por represents is now asking the Government to allow the insurance sector to sell these structured products, which are highly risky and lethal, but also highly lucrative. Hence, I think he is not wasting time to reprimand me in this Council; he did so in order to fight for the sector the right to sell these products. Deputy Chairman, I hope you would understand, a part of my speech today is directed against Mr CHAN Kin-por and I also hope that officials in charge of financial affairs now present in this Chamber would hear my opinions.

11998 LEGISLATIVE COUNCIL ─ 22 May 2014

MR CHAN CHI-CHUEN (in Cantonese): Deputy Chairman, I will speak on the reduction of the expenditures for the Communications and Technology Branch of the Commerce and Economic Development Bureau, covered by Amendment Nos 305, 307, 309 and 311. Amendment No 305 reduces the estimated annual operating expenditure for the Communications and Technology Branch of the Commerce and Economic Development Bureau from $135,075,000 to $1,000, which is the toughest amendment. Another amendment is Amendment No 307, which seeks to reduce the estimated annual expenditure for the salaries of staff of the Communications and Technology Branch of the Commerce and Economic Development Bureau by $70,319,000. Amendment Nos 309 and 311 also seek for reductions of smaller amounts.

I will also talk about Amendment No 898 to reduce the annual emoluments of the Secretary for Commerce and Economic Development amounting to $3.38 million, that is, the annual emoluments of Secretary Gregory SO. However, I will only focus on the Communications and Technology Branch in this session.

First, let us take a look at "Head 55 ― Government Secretariat: Commerce and Economic Development Bureau (Communications and Technology Branch)". Its work is divided into two main programmes only. Programme (1) Broadcasting and Creative Industries and Programme (2) Telecommunications. Let us consider the most important part first: Programme (1) Broadcasting and Creative Industries, the aim is to promote the development of broadcasting and creative industries and enhance Hong Kong's position as a broadcasting and creative capital.

For this reason alone, we can already ask this Bureau to cease operation. Hong Kong used to be a creative capital and I remember that LEUNG Chun-ying had, in his first Policy Address, mentioned the creative industries and said that during the blooming days of the television industry in the 1980s, people in Taiwan, the Mainland and Southeast Asia watched Hong Kong television dramas. Sadly, the importance and status of Hong Kong television dramas in Asia and the Chinese community has plummeted.

Under the scope of the Communications and Technology Branch, television certainly has the most extensive impacts on Hong Kong people. The most important events in the past year were definitely the granting of domestic free television programme service licences and the licence renewal applications LEGISLATIVE COUNCIL ─ 22 May 2014 11999 of the free television stations. I believe every people of Hong Kong still has a lasting memory. There are two free television stations in Hong Kong and their licences should be renewed soon. Have the authorities conducted any opinion polls? In fact, the opinion polls of the two television stations are not very credible. Which drama series have received the most complaints: Is it "My Date with a Vampire" which has been broadcast for unlimited times or "Journey to the West" which has been described as the worst slipshod drama? Which television station can fully reflect the characteristics of Hong Kong as a creative capital?

(THE CHAIRMAN resumed the Chair)

While TVB has bought inferior and out-dated Mainland drama series, ATV has repeatedly broadcast its previous programmes. In this connection, the Government is duty-bound to intervene. It cannot say that as this is a free market, the Government cannot intervene, no matter how poor the productions of these two television stations are. Why has TVB rested on its laurels all these years, daring to broadcast such an inferior Mainland drama during prime time? The reason is that it has always been the dominant television station. Two weeks ago before the beginning of the Budget debates, I dined with my friend from ATV. In his view, in broadcasting those drama series, TVB may want to help ATV because ATV is not TVB's competitor but partner. The strongest competitor of TVB is Ricky WONG and TVB fears him more than ATV. Hence, TVB does not really want ATV to cease operation and it does not want a wide disparity in audience shares being 9:1 or 10:0. Hopefully, the ratio can be adjusted to 8:2.

There are two television stations in Hong Kong but both stations have not attached importance to local production. The scope of development of local artists has become increasingly limited. LEUNG Chun-ying attached much importance to the television industry in his first Policy Address, saying how flourishing our television industry was in the past. Despite such words, what kind of show has he staged for us through the Commerce and Economic Development Bureau, Gregory SO and the Communications and Technology Branch? What has impressed us most? It was the fact that the Government did not issue a licence to Hong Kong Television Network (HKTVN) last year. The HKTVN has attached importance to local television production, it has made innovative efforts and invested huge amount of money to produce local television 12000 LEGISLATIVE COUNCIL ─ 22 May 2014 programmes, comparable to the quality of film production and has adopted the modus operandi of foreign television stations. Yet, it failed in the final kick to get a licence. Why are Hong Kong people so angry? It is because Hong Kong people have no choice. Some people think that the public do have a choice and they can choose between TVB and ATV, as well as the digital stations of TVB and ATV. The situation is similar to universal suffrage. When I promoted universal suffrage on the streets, I said that an election with screening was just like a choice between TVB and ATV. If people to watch Ricky WONG's HKTVN, they do not have the choice. Only TVB and ATV are eligible candidates, and TVB, with higher popularity, will always win. TVB can go northward to buy "inexpensive and good" dramas. With the Government's help, Ricky WONG has been screened out. As a result, local production crew and local stars have lower and lower bargaining power, and television stations do not need to make any investment in the software and hardware for drama production.

The Commerce and Economic Development Bureau (Communications and Technology Branch) is an accomplice to building up television hegemony and the dominance of one television station. For this reason, many people support reducing the expenditures for the Bureau and the salaries of Secretary Gregory SO. Many people want to join the television industry. They are not restricted to artists or those who dream of becoming movie stars. Some of my former students attended universities in Taiwan because the television production courses in Taiwan are more advanced than those in Hong Kong. After taking these courses, they intend to return to Hong Kong for development, thinking that they may find a job in Hong Kong because there are a few more free television stations. At last, they told me, 'Slow Beat Sir', Ricky WONG's television station cannot start operation and we cannot find a job after we have completed a degree programme on television production". What happened to one student is really miserable; he asked me to introduce him to join the HKTVN but he was laid off after joining the television station for some time. Later, he rejoined the television station when he heard that it might become a digital television platform; but things did not turn out right.

This is a very heavy blow to some Hong Kong people who intend to engage in creative work and join the television industry. The point at issue is not disallowing a businessman to set up a television station, he is poor in management and he has made some miscalculations. The point at issue is that the Government's act has ruined the dreams of many television industry practitioners or those who want to join the industry. The Government claims LEGISLATIVE COUNCIL ─ 22 May 2014 12001 that it supports creativity and television development but it has implemented very confusing policies. At present, we really do not know what will happen to HKTVN; it may not succeed in its licence application. For those artists who left TVB to join HKTVN, it is a nightmare. If Ricky WONG cannot start operating a television station, those artists may not necessarily have the opportunity to rejoin TVB, and they may also be blacklisted by TVB.

What exactly does the Communications and Technology Branch want to do? Does the Government really support dramas produced by Hong Kong people? Should television stations be allowed to buy dramas from other sources or from the Mainland, causing the shrinkage of the entire television industry of Hong Kong? Our television culture has fallen from the highest position in Asia to the lowest. Hong Kong people now watch Taiwanese, Korean and Mainland dramas but not Hong Kong dramas. Is it true that Hong Kong people who are out of work in Hong Kong can go back to the Mainland to set up factories and run business, as LEUNG Chun-ying has said? Similarly, can Hong Kong artists who are out of work go northward to perform in our powerful country. What policy is this? This will cripple local creativity; does LEUNG Chun-ying have the intention of supporting creative industries? He said that he would set up an Innovation and Technology Bureau but we have serious doubts. Hong Kong people should clearly understand that communications and technology does not fall within the scope of the Innovation and Technology Bureau. LEUNG Chun-ying has played the art of double talk again; he said that he wished to set up an Innovation and Technology Bureau even before he assumed office. It was then known as "Information and Technology Bureau", which covered television and telecommunications. The Innovation and Technology Bureau that is currently being discussed is another issue. We must clearly understand the difference.

LEUNG Chun-ying said that he visited Sweden to learn from their creativity. Considering the free television licence applications in Hong Kong, I think it is appropriate for him to visit Sweden. LEUNG Chun-ying went to a place called Stockholm and at present, the television industry in Hong Kong has "Stockholm syndrome". I may also have this disease; I was very angry when I saw Secretary Gregory SO but I cannot help sympathizing with him now. What is Stockholm syndrome? There are four characteristics: the first one is fear. The consultant told the truth about the television licensing process, yet unexpectedly …

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CHAIRMAN (in Cantonese): Mr CHAN, you have digressed from the question.

MR CHAN CHI-CHUEN (in Cantonese): I request a headcount first so that I would have time to rearrange my speech.

CHAIRMAN (in Cantonese): Will the Clerk please ring the bell to summon Members back to the Chamber.

(After the summoning bell had been rung, a number of Members returned to the Chamber)

CHAIRMAN (in Cantonese): Mr CHAN Chi-chuen, please continue.

MR CHAN CHI-CHUEN (in Cantonese): Chairman, you have just reminded me not to digress from the question. I now continue to speak, and I would talk about the ideas of my whole argument and the aim of the Commerce and Economic Development Bureau (Communications and Technology Branch), that is, to promote the development of broadcasting and creative industries and enhance Hong Kong's position as a broadcasting centre and a creative capital. Please pay attention to this sentence; I want to demonstrate that this Bureau or this Branch has not only failed to promote the development of the broadcasting industry, especially the creative development of the television industry, but it has also moved in the opposite direction to stifle our creative industries. I once worked in a television station; I do not know if the Chairman had watched the programme I was responsible for. It was a game show purchased from abroad, and repackaged with the addition of some local elements, including local production and local creativity. I remember that back in 2012, the industry knew that the Government would grant additional free television licences but the Communications Authority had been procrastinating. I did not run in the election at that time, but I held a signature campaign on the streets, asking the Government to issue the licences as soon as possible. In fact, delay in issuing the licences is a very serious blunder of this Bureau and this Branch. Why did the authorities not help the Chief Executive-in-Council issue television licences without delay? Donald TSANG wanted to issue licences in the later years of his administration; yet, the Government surprisingly did not take any action. After LEGISLATIVE COUNCIL ─ 22 May 2014 12003

LEUNG Chun-ying took office, he continued to procrastinate in issuing television licences. Issuing new licences can terminate the dominance of one television station and create job opportunities, as well as improve the quality of local programmes; when there is competition, there is progress. The television industry does not only provide entertainment, it is also an industry that support the livelihood of many people. In the past, drama series sold overseas contributed a lot to the GDP and created wealth for Hong Kong. Competition is not something terrible and television stations need to compete to bring about improvements. ATV and TVB have been competing for many years; the highest rating of my programme was 18 rating points. That is a fantasy today because the current rating of ATV is only one rating point. Nonetheless, scenes of the past leap up vividly before my eyes, the Commerce and Economic Development Bureau …

CHAIRMAN (in Cantonese): Mr CHAN, you seldom mispronounce the words but the Chinese character "歷" in the Chinese expression "歷歷在目" (meaning leap up vividly before one's eyes) should be pronounced as lik6 but not lik1.

MR CHAN CHI-CHUEN (in Cantonese): Yes, I have messed up the tones, the Chinese character "歷" in "歷歷在目" should be pronounced as lik6 but not lik1. I pay much attention to pronunciation and I thank the Chairman for his advice. The Commerce and Economic Development Bureau (Communications and Technology Branch) has stifled local creativity. I believe Hong Kong people must still remember this scene: around last October, the authorities suddenly cherry-picked two out of the three applicants on the pretext of avoiding excessive competition, disregarding the principle of not setting any limit on the number of licences. HKTVN, though considered by the community as the most likely winner, was ousted. This policy of the SAR Government was very unreasonable; it cooked up a reason, … I do not want to mention Ricky WONG in particular, but he has great sincerity to develop the television industry in Hong Kong. Being a businessman, he is willing to invest in the plant and has employed staff members. His dream of becoming a member of the media industry has been shattered; the dreams of many members of the television industry have also been shattered and the livelihood of many people has been affected.

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CHAIRMAN (in Cantonese): I would like to ask whether government officials will speak in this joint debate.

SECRETARY FOR FINANCIAL SERVICES AND THE TREASURY (in Cantonese): Chairman, regarding the amendments covered in this joint debate, the Government has nothing to add.

CHAIRMAN (in Cantonese): I will allow Members to continue to speak for the remaining time of this joint debate.

MR ALBERT CHAN (in Cantonese): Chairman, I have just commented on the Hong Kong Tourism Board (HKTB) and I would like to point out that we do not agree with the direction of the overall development of the HKTB and its specific enforcement, but its financial management is quite sound and has a surplus every year. The surplus recorded was $8.42 million in 2012 and $6.9 million in 2013, and the cash accumulated in 2013 amounted to over $160 million. On administration and management, it has performed relatively better than some spendthrift organizations which incurred losses year after year. On the whole, as we fail to see any contributions made by the HKTB on promoting the development of Hong Kong, defending local interests and developing local culture and ecology, and so on; I thus propose to reduce its expenditures.

Chairman, next I would like to talk about Amendment No 887, that is, head 152 be reduced by $208,200,000; which is equivalent to the estimated annual expenditure on the operating expenses of the Travel and Tourism Programme under the Commerce and Economic Development Bureau (Commerce, Industry and Tourism Branch). Whenever tourism is discussed, the reaction of most Hong Kong people is negative, because they fail to understand why Hong Kong taxpayers have to pay for these expenses.

Let me talk about some sins of the Tourism Commission (TC). The TC has around 65 staff and its blunders have caused suffering to Hong Kong people. A number of Members have mentioned the Assessment Report on Hong Kong's Capacity to Receive Tourists that the Government, especially "Secretary Name Card" took pride in. It can be said that this report is completely and seriously divorced from the reality. The Government has formulated erroneous policies LEGISLATIVE COUNCIL ─ 22 May 2014 12005 based on erroneous assessments and reports. The Government has repeatedly said that it has conducted assessments and the report showed that Hong Kong has the capacity to receive tourists.

Let us consider the contents of the report, and we will understand the serious mistakes made by the TC in grasping the situation. Under the Travel and Tourism programme in 2013, the TC's main task is to study and assess Hong Kong's capacity to receive tourists. However, if we consider the actual situation, when the authorities released the report in December 2013, it pointed out that in 2017 ― as quoted by many Honourable colleagues ― the number of tourists in Hong Kong could reach 70 million, and it would reach 100 million in 2023. The assessment agency considers the relevant figures appropriate. According to the agency, apart from insufficient hotel rooms to meet the tourists' demands, other facilities such as control border facilities, theme parks and transportation systems can meet the demands of an increasing number of tourists.

Based on this assessment, the "Secretary Name Card" has indicated time and again that the Government has conducted assessments and considered that the development needs can be met. In addition to constructing more hotels, other facilities can cope with the demands. Consequently, the government authorities may, in formulating policies, be involved in the transfer of interests. For instance, the Development Bureau may transfer interests to the developers of East Kowloon. As we all know, a number of factory buildings have applied for conversion, the authorities have not only approved their applications, but also waived the regrant premium if certain policy requirements are met. The interests involved are astonishingly significant. Just because some facilities are insufficient, the Policy Bureau gives the green light to all applications, it even allow applicants "free access" to meet the target, without setting any barriers. Of course, interests can be transferred incessantly. As the assessment indicates that transportation is not a problem, "Secretary Name Card" has repeatedly said that passengers only need to wait for one more train. He has no idea that passengers have to wait for eight more trains. The assessment is seriously wrong.

Another issue that cause dissatisfaction and annoyance of residents in the North District is parallel trading. Visitors should not be parallel traders. According to some recent assessments, most parallel traders are Hong Kong people but not Mainland visitors. However, as there are many types of parallel goods, the sampling survey may focus on a particular certain type of parallel 12006 LEGISLATIVE COUNCIL ─ 22 May 2014 traders. Following the recent tightening of regulation of customs clearance in the Mainland, targeting in particular Mainland residents working as parallel traders, Hong Kong people are now engaged as parallel traders. Even after this change, an indisputable fact is that the problem of parallel traders is still extremely serious.

According to the report, "Since September 2012, the SAR Government has implemented a series of measures to combat parallel trade activities and improve the order at train stations and control points, as well as to protect the daily lives of our community. However, given that combating parallel trade activities and Hong Kong's capacity to receive tourists are two separate issues, the two should not be discussed together." First of all, we can see that people who draft the report live in an ivory tower. As I have just said, though some parallel trade activities have gradually been taken up by Hong Kong people, the situation of Mainland visitors carrying parallel goods is still prevalent. Can we see Mainland tourists pulling suitcase in all places? If they do not use the suitcase to carry goods, why they travel around pulling a suitcase? If we have some common sense, we will know that in Jordan or Mong Kok … When I went shopping at Wing On two days ago, I saw many people pulling suitcase shopping near Yue Hwa Chinese Products Emporium on Nathan Road. When we see Mainland tourists pulling suitcase in various parts of Hong Kong, how can we not suspect that they engage in parallel trade activities?

Of course, there are many kinds of parallel traders and the TC may only be concerned about those who come to Hong Kong to buy Yakult and toilet papers. However, many parallel traders buy various staff at pharmacies and some of them buy expensive products, spending several hundred thousand dollars each time. They may be regarded as another type of parallel traders. Therefore, to a certain extent, visitors pulling suitcase are parallel traders and this is in fact a common sense judgment. Yet, the TC has not examined the issue but just treated the matter lightly. Apparently, it condones these people. Evidently, the TC is aware of the problem, but it does not care, an indication that it is ignorant and incompetent. No matter what reasons we have, we should not continue to use public money to support these people's indifference to this very important social issue.

In addition, regarding economic contribution, an assessment on the Individual Visit Scheme (IVS) showed that it has brought additional values equal to 1.3% of our GDP, and has created more than 110 000 jobs in Hong Kong. LEGISLATIVE COUNCIL ─ 22 May 2014 12007

The IVS has been described as making great contribution to our economy. I do not think anyone will question the results of the assessment but when we assess any scheme, in addition to economic growth, we must also consider the changes in the overall labour market and the impacts on other aspects. I have repeatedly criticized the "invasion" of a large number of IVS visitors or Mainland visitors. To a certain extent, this is a strategy or a step taken to achieve cultural and economic colonization. Besides, the employment of more staff by the hotel industry will definitely put pressure on other industries. The growth of the tourism industry may cause labour shortage problem in other industries. In particular, the high wastage rate and shortage of workers in the construction industry have pushed up the construction costs significantly. As the whole economy involves interaction and mutual influence; we cannot simply boast the contribution of a certain industry but fail to assess its chain effects. Therefore, the practice of the TC is biased, and as a result, the Government cannot have a balanced view.

In the conclusion of the assessment report, it is mentioned that the current receiving capacity of Hong Kong can meet the demand and if the growth of visitor arrivals remains steady in the next few years, Hong Kong will have sufficient capacity to receive more visitors. These are all lies. Perhaps the TC has followed the practice of "689", who rules Hong Kong with lies, and the style of "Secretary Name Card". For this reason, it is overambitious and unrealistic, completely ignoring the actual pressure on the public and the changes in circumstances. In short, as long as it is political correct, political demand would override the actual environment and the rights of Hong Kong people. In view of the existing problems, the impacts of this erroneous assessment can be described as extremely serious.

Some have suggested that our theme parks can cope with increasing tourists, but we know that this saying is utterly wrong. Recently, we have provided additional funding to support the expansion of Disney hotels while the attendance of the Ocean Park has saturated. In fact, even Hong Kong people cannot visit the Ocean Park. More often than not, especially during festivals, it is difficult for Hong Kong people to buy tickets to visit the Ocean Park. I do not want to say too much on this point. Moreover, the North District is hardest hit by smuggling activities. The impacts on local residents, such as the rising rental of retail shops, have proved that the current situation of visitors is definitely not as described by the TC.

12008 LEGISLATIVE COUNCIL ─ 22 May 2014

Another sin of the TC is its poor management of the Mega Events Fund (MEF) and a waste of public money. Chairman, this sin is even more serious. Many years ago, I applied on behalf of an organization in Mui Wo for funding from the MEF. We must be very careful when applying for funding from the MEF; otherwise, it would be a sheer waste of energy and money as we need to spend a lot of time following up on many matters. One of the features of the MEF is that it only provides funding for publicity expenses but not for administrative and activity expenses. If a large-scale activity has very high publicity expenses, it requires very strong administrative support. How can the administration work be well conducted? This relies on the help of many people. Many organizations have thus made wrong deployment of financial resources and they are being accused of corruption.

The MEF provides funding amounting to millions of dollars and a number of activities will be held. In fact, many organizations have weak and careless administrative support, and the co-ordination work is not handled by experienced people with strong administrative power; as a result, numerous problems may arise, and the result may be disastrous. In case of mismanagement and inaccurate accounting, but funding amounting to several hundred thousand dollars or million dollars is still provided, serious problems will arise.

Later if I have the opportunity, I will comment further in detail the mismanagement of the MEF, that is, the management problem of the TC. Yet, some staff of the TC should be highly commended because they have spared great effort in promoting the MEF; I will explain this in detail later.

MR LEUNG KWOK-HUNG (in Cantonese): Today, the Chief Executive, LEUNG Chun-ying, talked drivel in this Chamber, saying that Members of this Council were uncivilized and we had no reason to treat him like that. I am now going to treat him more gently; I will only make comments and will take no action.

Chairman, the establishment of the so-called "Future Fund"; I have made painstaking effort to read this …

CHAIRMAN (in Cantonese): Mr LEUNG, which amendment are you now speaking on?

LEGISLATIVE COUNCIL ─ 22 May 2014 12009

MR LEUNG KWOK-HUNG (in Cantonese): Amendment Nos 813, 814, 815, 817, 819 and 821, they are all relating to long-term … the reductions cover the Government Secretariat and the Financial Services and the Treasury Bureau, including Secretary Prof K C CHAN and the Permanent Secretary.

You have interrupted my speech. The establishment of a "Future Fund" is poles apart from the election manifesto of LEUNG Chun-ying. I have kept a copy of his manifesto, but I believe there is almost no chance of achieving his pledges, because I know he often fails to honour his promises. So, I have kept these dishonoured cheques. He gave me this manifesto on 8 March 2012 and he wrote on it "Mr LEUNG Kwok-hung, please give comments." I am going to give some comments. He has not mentioned the establishment of any fund, and in page 54 of the manifesto on public finance …

CHAIRMAN (in Cantonese): Mr LEUNG, how are the series of amendments you have just mentioned related to what you are saying now?

MR LEUNG KWOK-HUNG (in Cantonese): In the Chief Executive's first Policy Address, he had not mentioned the "Future Fund".

CHAIRMAN (in Cantonese): How is that related to your request for deducting, for example, the estimated annual expenditure for the Office of the Secretary for Financial Services and the Treasury?

MR LEUNG KWOK-HUNG (in Cantonese): It is because they proposed the setting up of a "Future Fund". In fact, Financial Secretary John TSANG also relies on them for implementation. They came up with the idea of a "Future Fund" … Members of the group on long-term economic development strategies made the proposals and the …

CHAIRMAN (in Cantonese): I will continue to listen carefully to your remarks. Do not digress from the question.

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MR LEUNG KWOK-HUNG (in Cantonese): All right. Why do I say that the "Future Fund" has no basis? LEUNG Chun-ying's manifesto only contains two points on public finances. I will quickly quote point 22 which stated that "We will make proper use of the fiscal reserves to invest in four areas: (a) financial investment to seek returns to supplement recurrent expenditure; (b) social investment such as building more homes for the elderly and people with disabilities and improving air quality; (c) economic investment such as building the third runway at the airport and providing seed money for new industries; and (d) setting aside funding to meet future expenditures arising from the ageing population such as medical and healthcare expense and pension payments". This echoes his commitment of "supporting the elderly and providing for their needs". Yet, we cannot find anything about a "Future Fund". As you have just heard, I have just read out the first point "financial investment to seek returns to supplement recurrent expenditure", right?

CHAIRMAN (in Cantonese): Mr LEUNG, what you have just read out still has nothing to do with the amendments mentioned by you.

MR LEUNG KWOK-HUNG (in Cantonese): It is because the money earmarked by Financial Secretary John TSANG for the "Future Fund" is intended to supplement recurrent expenditure, but this has not been mentioned by the Chief Executive. The Chief Executive wants funding for investment to seek returns to supplement recurrent expenditure, such as building hospitals and schools. Although Financial Secretary John TSANG has similarly provided funding for investment, his purpose runs contrary to that of the Chief Executive of supplementing recurrent expenditure. In other words, if the elderly are burdens to Hong Kong and the Government does not have money to implement infrastructure projects, the money can be used to supplement the expenditure. These two persons are basically in dispute: the Chief Executive wants to set aside a sum of money for the elderly and make investment for returns to supplement recurrent expenditure, so as to ensure that our housing and community investments can be maintained. But Financial Secretary John TSANG said that the Government has set aside $220 billion for non-recurrent investments, such as the construction of the Express Rail Link and other projects. They are tearing the Government apart. To be honest, can they tear me, LEUNG Kwok-hung, into two pieces? These two persons are standing over there, accusing me of hurling things at them … In fact, this "Future Fund" …

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CHAIRMAN (in Cantonese): Mr LEUNG, I still cannot figure out how is your request for reducing the estimates related to what you are saying now.

MR LEUNG KWOK-HUNG (in Cantonese): Now I will talk about how the two are related. Chairman, maybe you are too tired today and you do not understand what I am saying. Why is the Financial Secretary not dismissed when his policies run contrary to the Chief Executive's manifesto? The Policy Bureau has also expressed support. I now talk about the Policy Bureau. What are the reasons to set up a "Future Fund" by the Policy Bureau? The idea came from the Working Group on Long-Term Fiscal Planning. The appointed members of this working group are very influential. Even the independent study completed by Prof Nelson CHOW has to give way to the members of the Working Group. Where do these people come from? They should be identified by Elizabeth TSE and approved by Secretary Prof K C CHAN. On the non-official members of the Working Group, Mr Francis LUI is a staunch rightist while Mr Marcellus WONG is Senior Adviser of Pricewaterhouse Coopers. Mr Marcellus WONG once said that the profits tax rate of 16.5% in Hong Kong still has room for reduction. He is such a person. Another member, Mrs Jennifer WONG, is awesome and she has made a number of proposals. In 2013, she proposed that the Government should levy a sales tax and she later considered that the "user pays" principle should be adopted for healthcare services …

CHAIRMAN (in Cantonese): Mr LEUNG, you speech has nothing to do with those amendments, please stop.

MR LEUNG KWOK-HUNG (in Cantonese): How can it be irrelevant? I am censuring him, pointing out that he has neglected his duty for proposing to set up a "Future Fund". If the "Future Fund" …

CHAIRMAN (in Cantonese): Who is “he”?

MR LEUNG KWOK-HUNG (in Cantonese): Chairman, the "Future Fund" is a part of the Budget.

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CHAIRMAN (in Cantonese): Whom exactly are you censuring?

MR LEUNG KWOK-HUNG (in Cantonese): I would like to censure Secretary Prof K C Chan and Permanent Secretary Elizabeth TSE who appointed the members of the Working Group on Long-Term Fiscal Planning. Can I do so? Is it fair and sound for him to appoint these people? He will spend $220 billion on infrastructure projects, and none of the members are from the grassroots, buddy. If he appoints me as a member, I will certainly raise objection. I would definitely ask for $50 billion first, leaving them only $170 billion. Since you do not like me to read out these contents, I would not do so. In short, all these members are the bosses of large consortia or the Asia Pacific managing directors of large consortia. Of course, they would suggest that money should be invested on infrastructure projects for they would have some profits in the investment process. Chairman, this is the same as the arguments about the establishment of the MPF years ago. Only fund managers can eventually benefit. While we have no money for retirement, they need not worry.

Chairman, first, no criterion is adopted for the selection of members and there is likely a transfer of interests. Chairman, there is a common saying that goes, "when people are poor, they can be very good at writing"; to be honest, a "Future Fund" has "no substance and is just a copycat". Indeed, a "Future Fund" was set up in Australia; ours is a copycat. Chairman, a "Future Fund" was set up in Australia in 2006; its approach and objectives were very similar to those proposed by Financial Secretary John TSANG. Let me read out, I have a script …

CHAIRMAN (in Cantonese): Mr LEUNG, you have already mentioned those points.

MR LEUNG KWOK-HUNG (in Cantonese): You have not … you really … let me read out and you can judge if I have mentioned those points. The "Future Fund" in Australia has several features. First, money will be locked up for 14 years, do you know about that? After 14 years, the funds will specifically be used for paying pensions; that is, to pay the salaries of civil servants 14 years later. But our "Future Fund" will be used to build "white elephants" 14 years later. In Australia, the "Future Fund" is used to purchase state assets. We are doing something different; in addition to purchasing the MTR … I do not know if LEGISLATIVE COUNCIL ─ 22 May 2014 12013 the MTR will be purchased in future, perhaps we can purchase other things. The "Future Fund" in Australia goes after high returns, and John TSANG has also indicated that the Government would go after high returns. The "Future Fund" in Australia involves free investment; in other words, purchase can be made in other places. Similarly, the "Future Fund" in Australia will be managed by appointed independent managers. I am not sure if Secretary John TSANG, a keyboard warrior, has found such information on the Internet one day and then asked his subordinates to make a copy.

Chairman, after eight years in operation, the "Future Fund" in Australia is a total failure and has failed to achieve its objectives. The "Future Fund" also sold Telstra, a state-owned enterprise, which was purchased by the Fund after its establishment. In the past, the Government injected funds into Telstra and the sales of these assets was monitored by the Australian Parliament (the Australian Parliament is equivalent to the Legislative Council in Hong Kong). Those are the assets of the people but since the Liberal Party in Australia (not the political party led by Mr James TIEN) implemented the "Future Fund", the Fund involved free investments and Telstra was purchased, which was later sold in the market …

CHAIRMAN (in Cantonese): Mr LEUNG, you should discuss the Government Secretariat of the SAR Government: Financial Services and the Treasury Bureau (the Treasury Branch) but you have just talked about the Liberal Party of Australia; you have digressed from the question.

MR LEUNG KWOK-HUNG (in Cantonese): No, in essence, a "Future Fund" is more or less …

CHAIRMAN (in Cantonese): Mr LEUNG, you have digressed from the question. Please do not digress any more.

MR LEUNG KWOK-HUNG (in Cantonese): Alright, I will not digress from the question.

John TSANG has learnt from the Australians, he earmarks a sum of money, demands for high returns, engages in free investments and appoints independent managers. He is a copycat. I do not know if he is really copying. Why 12014 LEGISLATIVE COUNCIL ─ 22 May 2014 should I give him money? That is the hard-earned money of Hong Kong people. The Chief Executive has pledged to set up a fund for the elderly; on the contrary, he intends to set up a "Future Fund" which is not mentioned in the Chief Executive's manifesto. What kind of government is this?

Chairman, I am going to discuss whether John TSANG and K C CHAN are qualified to make estimates. I have points. My argument that he is making wild guesses and they are unscientific. There are data, right? Let me give an example. Since K C CHAN started assisting John TSANG, both of them have always been working together. Since 2007 …

CHAIRMAN (in Cantonese): Mr LEUNG, it is very easy to prepare the script for you. All that is needed is to find the information, after you have censured the Financial Secretary, just replace the name with "Secretary Prof K C CHAN", and you can start all over again.

MR LEUNG KWOK-HUNG (in Cantonese): But that is the fact. Chairman, the sun rises in the east every day; is it too simple? I think that is not fair; I am trying to present my argument. He is not qualified to make estimates as the "Future Fund" is nothing but estimates. He thinks that a deficit will inevitable arise 15 years later because of an ageing population and the failure to enhance productivity. The elderly would thus become burdens. Is he making wild guesses about what will happen 15 years later? He made wrong estimations before, will he make wrong estimations in future?

That is very simple and I will say no more. Chairman, comparisons are odious. The wrong estimates made by former Financial Secretary Donald TSANG involved $39.5 billion on average; as for Antony LEUNG, the amount involved was $22.2 billion. Henry TANG was awesome and he almost managed to catch up. His wrong estimates involved $63.7 billion on average. If Antony LEUNG is making the estimates, I would certainly trust him a little more because his estimates were not so wrong. Concerning the elderly's future … John TSANG might have woken up in the middle of the night and thinking that there might not be enough money for infrastructure development, he hastily proposed a "Future Fund" in the Budget and sought our approval. We cannot go back on our words once we have granted the approval, all I can do is to filibuster when the funding application is being considered …

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CHAIRMAN (in Cantonese): Mr LEUNG, you have already mentioned these points during the second joint debate when dealing with the amendments to reduce the estimated expenditure for the Office of the Financial Secretary.

MR LEUNG KWOK-HUNG (in Cantonese): What? Have I mentioned … I suppose you are right … you are right but in my view, without the Secretary, we will not have the Financial Secretary. It is because the functions of the Secretary ― I want to read that out, but forget it ― he only has three functions: assisting the Financial Secretary in maintaining financial order in Hong Kong, and duly assisting the Financial Secretary in the formulation of fiscal policies and budgets. Buddy, he is the "right-hand man". I am talking about a person, and there is something wrong with his right hand, I thus propose to deduct the salary of this "right-hand man". Yet, you do not allow me to talk about this "right-hand man". You even ask me why I should deduct his salary as the Financial Secretary is the one who makes mistakes. When I talked about the Financial Secretary earlier, I have expounded on the reasons for deducting his salary. Now I would like to talk about the Policy Bureau, but you do not allow me to talk about the mistakes made by the Secretary.

K C CHAN made wrong estimations … John TSANG is actually not the one who made the estimation, right? When we talk about this … it is just the same in respect of taxation, one has to increase incomes and reduce expenditures. Everybody says that I am defiant and I am saying … a "Future Fund" is set up under the assumption that we have an ageing population and declining productivity. But why can't the Government consider a tax increase? We have such a low tax regime, why can't the Government consider a tax increase if it believes that we would not have enough money for infrastructure development in the future?

Chairman, you would certainly say that I am biased, let me read out an article, written by LAM Hang-chi, published in the newspaper you regularly read. LAM Hang-chi was more or less a staunch rightest in the past and he wrote, "Instead of setting up a 'Future Fund', it would be better to follow the world trend and impose a higher tax rate on the '1% high-income group' to increase revenue." This is his fair argument. Many of us read this newspaper.

He also wrote, "In Hong Kong, we have abolished the estate duty and alcohol tax, and the stamp duty concession will be extended to cover exchange traded funds as proposed by John TSANG in his Budget yesterday. The 12016 LEGISLATIVE COUNCIL ─ 22 May 2014

Government would also take forward the legislative work expeditiously to allow private equity funds to enjoy tax exemption for offshore funds. It has given too many concessions to the wealthy and the business sector, and has been too generous to the rich".

Chairman, I cannot imagine that LAM Hang-chi would tell the truth in his senior age; he must have eaten "honest bean paste buns" which I have not given to LEUNG Chun-ying today. Chairman, how can I not condemn K C CHAN? He is a scholar and had taught in The Hong Kong University of Science and Technology. He had also invited his colleagues to join the working group. John TSANG, on the other hand, lacks the relevant knowledge and has difficulties in performing his duties. In my opinion, since K C CHAN has good financial knowledge and practical experience, he should have given some advice to John TSANG. Even if John TSANG is busy with his official duties and has not read LAM Hang-chi's article, K C CHAN should print him a copy. Hence, I should deduct his salary. Without the support of K C CHAN and Elizabeth TSE, the "Future Fund" would not be set up; if those people were not invited, such an undesirable "Future Fund" would not have existed.

"Slow Beat", do you think his salary should be reduced? That is for certain. Nonetheless, not many Honourable colleagues are listening to me and someone is laughing. Mr NG Leung-sing, you work in a bank; you should say something instead of laugh wickedly.(The buzzer sounded) … Chairman, I request a headcount as I noticed that a quorum is not present.

CHAIRMAN (in Cantonese): Will the Clerk please ring the bell to summon Members back to the Chamber.

(After the summoning bell had been rung, a number of Members returned to the Chamber)

CHAIRMAN (in Cantonese): Mr CHAN Chi-chuen, you may speak now.

MR CHAN CHI-CHUEN (in Cantonese): In this session, I will continue to elaborate on the four amendments proposed by me, namely Amendment Nos 305, 307, 311 and 309. All these amendments aim to deduct the relevant expenditure for the Commerce and Economic Development Bureau (Commerce, Industry and LEGISLATIVE COUNCIL ─ 22 May 2014 12017

Tourism Branch). I will also touch on Amendment No 898 proposed by Mr Albert CHAN to deduct the estimated expenditure for emoluments of the Secretary for Commerce and Economic Development Gregory SO for a full year. In this session, I will continue to illustrate the serious dereliction of duty of this Policy Bureau and division with the issuance or non-issuance of free television (TV) licence, and how it upset Hong Kong people and failed to meet the objectives of the Policy Bureau.

In mid-October 2013, the Government announced the issuance of two free TV licences to the Hong Kong Cable Television Limited (Cable TV) and the PCCW Media Limited (PCCW). Of the three companies that have submitted applications, only the Hong Kong Television Network Limited (HKTVN) was not issued a licence. So far, the Government has not clearly explained to the general public why HKTVN was not issued a licence. I believe Members might recall that some 120 000 people had taken to the streets to support the issuance of a licence to HKTVN. In fact, I have not digressed from the question when I mentioned the Stockholm syndrome in the last session. I meant to say that I might have got the Stockholm syndrome when facing Secretary Gregory SO. At first, the Government insisted not to issue licences and adopt a procrastinating attitude. I had pursued the matter with Secretary Gregory SO at that time, but he replied that it was no longer his business as the issue had been passed to the Chief Executive in Council for deliberation. Although he is the head of a bureau and also an Executive Council Member, he and his bureau or division has no part to play before a decision is made, and cannot do anything at all.

At that time, I trusted Gregory SO because when he was forced to reply the relevant oral question, he said the matter was still being discussed by the Chief Executive in Council. Before the result was announced, we could not hold him responsible, but when Gregory SO interpreted the result, I could not help holding this Director of Bureau responsible. I wonder if Members still recall that the Government had commissioned the Spectrum Value Partners to prepare a consultancy report. In mid-November 2013, its Director Ms Jenny NG pointed out that the Government decided to pick two out of three applicants only after applications were received, and it was not a recommendation made in the consultancy report. The Government spent huge sums of public money to commission the consultancy study, but had not followed the recommendations made in the relevant report. The Government had made such a decision based on its own imaginary data or reasons. This is indeed a waste of taxpayers' money.

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At that time, Mr Ambrose HO of the Communications Authority (CA) also declared that they had nothing to do with the matter. Instead of sending any representative to attend the relevant public hearing, it had submitted a paper of a few pages to state that after reading the report, it still considered that three licences should be issued. This made us think that Ambrose HO was a good guy. But when it came to the mobile TV services in Hong Kong, it is a different story. The Executive Council obstinately clung to its own course and only issued licences to two applicants. This has rendered the consultant commissioned by the CA exist in name only in the course of licensing, completely failing to perform its function. Under the licensing regime, the Commerce and Economic Development Bureau has not only failed to promote the development of broadcasting and creative industries, but has also triggered a crisis of governance, resulting in the dismissal of more than 100 HKTVN staff and causing the applicant the loss of hundreds of millions of dollars of investment. Worse still, this has undermined the confidence of businessmen to invest in Hong Kong, which is unforgivable.

The most sarcastic of all is that the two applicants who have been granted licences by the Government are not very enthusiastic in the provision of free TV services. It just happened that an opportunity had arisen for them to submit proposals so as not to be left behind. The two applicants to which licences were granted are less enthusiastic in providing free TV services than HKTVN. I did not fabricate this fact. When the major shareholder of Cable TV, Peter WOO, was asked publicly if he was very keen in such services, he denied and this was more than clear. According to my observation, the two companies to which free TV licences were granted had slackened their pace when the Government adopted a procrastinating attitude, and had even thought of giving up. However, it turned out that the most enthusiastic applicant was not granted the licence whereas the less enthusiastic ones were selected. So far, there has been no sign of commencement of a TV station.

It is thus evident that there are serious problems with the Commerce and Economic Development Bureau in the course of licensing. When approving applications for free TV licences, the CA only needs to commission consultancy firms in the private sector to carry out the relevant studies and then make recommendations to the Commerce and Economic Development Bureau for approval. The Executive Council merely plays the role of a rubber stamp, and is not vested with the actual right of nomination like the nominating committee. The Executive Council is only required to read and sign the relevant documents. Unexpectedly, "one single man" had changed the whole story.

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All these happened last year. This year, on 14 May, it was reported that after obtaining the free TV licences, the Cable TV and PCCW have adopted a stalling tactic, thereby indefinitely postponing the operation of the free TV stations. It has been seven months since free TV licences were granted to Cable TV and PCCW in October 2013, but these two new free TV licencees criticized the Government of favouring the existing licencees (namely Television Broadcasts Limited (TVB) and Asia Television Limited (ATV)). They accused the Government of not opening up the terrestrial airwaves for them, thereby rendering their licences useless. What does that mean? After the Government staged a "big show" by issuing two free TV licences, the licencees complained that the licences would be useless unless terrestrial airwaves are opened up to introduce competition. If not, they would not make investment but simply re-edit programmes produced by the paid TV broadcaster for broadcast through the free TV channels.

The fact is, however, the Government has required the two licencees to operate one Cantonese channel and an English channel 12 months and 24 months respectively after issuance of the licences. In that case, no new TV stations will come into operation before the issuance of licences. The most frustrating of all is that the two licencees have reacted passively, thereby enabling TVB to continue to dominate and thus indirectly undermining the interests of local viewers. This is another reason why I felt so upset about Secretary Gregory SO, and I am still not convinced with one of the arguments put forward by him.

He pointed out that the reason of not issuing three licences is to avoid vicious competition, stating that cut-throat competition would make viewers suffer more than they gain. Today, I still fail to understand why two or three or even five TV broadcasters compete to make generous investment and produce good programmes would make viewers suffer more than they gain. To the industry, it is also desirable for artists and production staff to have higher salaries due to greater job opportunities. The only point that I can think of and show sympathy for Secretary Gregory SO is that cut-throat competition might lead to the closing down of the TV broadcasters one after the other, such that local viewers would have no TV programmes to watch. This is the only possibility that cut-throat competition would undermine the interests of viewers. Even if it turns out that only TVB is left behind, local viewers will not suffer as this is always the case. Although I have pursued from time to time, the Secretary has failed to give an answer and has been beating around the bush.

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Again, we have now come to the critical moment of renewal of licences of the two free TV broadcasters. I wonder what the report will be like subsequent to the public hearing. No matter what, the licenses of TVB and ATV would be renewed in the end, but perhaps with additional terms. As we can see, in respect of free TV licences, the Commerce and Economic Development Bureau (Commerce, Industry and Tourism Branch) has facilitated the dominance of one TV broadcaster from the issuance of new licences to licence renewal, and this runs counter to its policy objectives. It is therefore justifiable to deduct its expenditure.

The second evil is equally serious and has triggered a judicial review. I am referring to the performance of the Commerce and Economic Development Bureau (Commerce, Industry and Tourism Branch) in promoting mobile TV services in Hong Kong. HKTVN announced that the High Court has approved its application for judicial review over the decision of the CA. According to the decision of the CA, if the HKTVN proposed to provide mobile TV services using the transmission standard Digital Terrestrial Multimedia Broadcasting, it would have no authority to operate businesses unless a licence for domestic TV programme services is obtained under the Telecommunications Ordinance. It is not suffice just to obtain the mobile TV licence because if the number of premises receivable exceeded a certain threshold, it should apply for another TV services licence as well.

CHAIRMAN (in Cantonese): Mr CHAN, you need not go into great details.

MR CHAN CHI-CHUEN (in Cantonese): Okay. HKTVN will issue the originating summon for judicial review to the CA 14 days after 20 May. Chairman, in explaining the case, I would inevitably mention the transmission standard, which is precisely why TV programme services cannot be provided by HKTVN for reception by mobile devices. I will try to be concise …

CHAIRMAN (in Cantonese): What is the relevance of all these to your amendment?

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MR CHAN CHI-CHUEN (in Cantonese): In order to justify the broad-brush deduction of the emoluments of Gregory SO or the expenditure for the Commerce and Economic Development Bureau (Commerce, Industry and Tourism Branch), I have to discuss the first evil concerning the non-issuance of free TV licence to the HKTVN and the second evil concerning the mobile TV licencing saga. As I have just started on the second part, it may take eight to 10 minutes to convince Members of the chaotic practices of the Commerce and Economic Development Bureau (Commerce, Industry and Tourism Branch), which have deprived Hong Kong people of an opportunity to be provided with more free TV programmes and mobile TV services. I will elaborate on this point as quick as I can.

Regarding the dispute over mobile TV licences, our initial impression is that the CA is only an issuing authority and regulator, and is not responsible for the operation of the licencees, so long as they comply with the law and the number of fixed customers does not exceed 5 000. However, this is deceiving. Given that the licences were issued by the Government, thus regardless of whether they were acquired from the Government direct or from the market, the licencees found them useless and they cannot operate. Without giving clear explanations at the outset, this is tantamount to deception. What is most infuriating is that the Deputy Director-General of Communications Danny LAU has likened HKTVN to an itinerant hawker, who attempted to operate private kitchens with its itinerant hawker licence. This gives the public an impression that HKTVN was "seeking to take advantage of the situation" and manipulating the legal loopholes, which is not the case. On the contrary, after HKTVN was granted the itinerant hawker licence, the Government demanded it to guarantee that no food would be brought into any restaurant, otherwise it would be arrested. I guess Members should all understand this analogy. The issue under discussion is mobile TV technology.

At present, programmes produced by the two free TV broadcasters are receivable by certain mobile devises, and as I have said, it is like a restaurant operating as an itinerant hawker at the same time. The CA, however, claimed that the Telecommunications Ordinance only requires that no person should "offer" mobile TV services without obtaining a licence. The word "offer" is again very controversial. According to the CA, even if it is technically feasible to broadcast programmes of free TV broadcaster on mobile communication devices, but given that TV broadcasters and viewers have neither monetary or contractual relations, nor an offer relations, this cannot be regarded as non- compliance. What a lame argument. How can free TV service providers have direct monetary relations with viewers? Although viewers of free TV 12022 LEGISLATIVE COUNCIL ─ 22 May 2014 programmes are not required to sign any contract, does this mean that the two parties have no relations at all? Of course not. TV broadcasters must have viewership to attract advertisers (The buzzer sounded)… The viewership of TVB has taken into account customers of mobile TV.

CHAIRMAN (in Cantonese): Does any other Member wish to speak?

MR ALBERT CHAN (in Cantonese): Chairman, I mentioned the Mega Events Fund (MEF) earlier and I would like to declare interest first. Many years ago, I assisted a Mui Wo organization called the Hung Shing Festival Preparatory Committee Limited to apply for $1.5 million from the MEF. As the Honourable Chairman of the organization, I did not have actual powers and I only offered assistance. This has enabled me to gain a better understanding of the operation of the MEF, and fully appreciate the difficulties involved.

As I have briefly mentioned earlier, funding of the MEF basically covers publicity expenses, but not administration fees and program fees. As we all know, publicity expense of $1.5 million is a large sum of money. As tens of thousands of people are attracted to Mui Wo in one day, a great deal of support, reception and liaison will have to be provided, including liaison with travel agents, as well as catering and transportation arrangements. Many volunteers and administrative support will be required in such preparatory work. Of course, there will not be any problem if financial assistance is available for the provision of heavy administrative support. Otherwise, we have to rely on volunteers. Sponsorship for program fees will have to be sought from other sources. The MEF will only provide partial support, but the financial support provided in respect of publicity has been very generous indeed.

In order to organize events similar to the one that I had assisted, hundreds of volunteers would be required during that couple of weeks to help …

(Mr Paul TSE stood up)

CHAIRMAN (in Cantonese): Mr CHAN, please hold on. Mr Paul TSE, what is your point?

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MR PAUL TSE (in Cantonese): He has mentioned time and again the event organized by him that was supported by the MEF, but what is its relevance to the issue under discussion?

CHAIRMAN (in Cantonese): Mr CHAN, what is the relevance between your speech and the amendment under discussion?

MR ALBERT CHAN (in Cantonese): Chairman, this is absolutely relevant as it involves the funding arrangement of the Tourism Commission (TC). It is related to Amendment No 887 which seeks to deduct the relevant expenditure by $200 million. I must therefore comment on this. Why should I refer to this event? Because there are misunderstandings that the TC has been ineffective in monitoring public money …

CHAIRMAN (in Cantonese): Mr CHAN, we only have 40 minutes left for this joint debate. Noting that this may be the last time you speak in this joint debate, please consider focusing your discussion on the most important and relevant parts.

MR ALBERT CHAN (in Cantonese): Alright. I will use five minutes to finish off this topic and then move on to the next topic.

Chairman, I have to praise the front-line staff of the TC, who have worked tirelessly and earnestly to assist organizations by providing information relating to their applications. They have reminded the applicants from time to time of any omissions or mistakes relating to their applications. In case there is any mistake with the applications, from my hands-on experience ― Chairman, I do not think anyone here has hands-on experience in providing assistance ― the front-line staff have examined the receipts produced by the applicants in a much stringent way than the 18 District Councils. I therefore believe all management problems should be attributable to the apathetic attitude of the organizations concerned and the connivance of their senior management. I just want to say that my experience has prompted me to do justice to the front-line staff.

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Regarding the criticisms against the MEF and certain organizations for their mistakes and the muddled accounts revealed by the Audit Commission, I believe the front-line staff should have reminded the organizations concerned, but no follow-up actions had been taken. After all, the front-line staff are not in a position to reject their applications or refuse to accept their financial disclosure. I hope Mr Paul TSE would understand that I did not mention those experiences to praise myself, but just to highlight the operational problems identified from my hands-on experience. A person will always make mistakes if he remains hands-off and stays in an ivory tower. This is precisely the case of many senior government officials, who have turned a blind eye to people's hardship.

Funding for the MEF has been extended for five years in 2012 for the purpose of strengthening Hong Kong's position as the Events Capital of Asia. But unfortunately, this objective or grand vision has disastrous implications. Instead of becoming the Events Capital of Asia, Hong Kong has become the Ugly Capital or Corrupt Capital after being plagued by accusations surrounding the mega events and the abuse of power by certain organizations for individual gains. Earlier, an organization applied to organize a football event but had enraged and seriously upset the football fans as most of the tickets had fallen into the hands of the powerful and wealthy people. Even if football fans were willing to pay, it was extremely difficult for them to get a ticket of this international football event subsidized by public funds. For international matches previously organized by the Hong Kong Football Association, such as the matches where famous English Premier League teams were invited, fans who were willing to queue up for the tickets could get them in most cases. However, for mega football events supported by the MEF, tickets were often shared among the organizers and particularly the privileged ones. The accusation that Hong Kong has changed from an Events Capital to a Corrupt Capital is therefore justified.

The muddled accounts of the MEF have brought the problems of the Dragon and Lion Festival into light, which I am not going to elaborate. As I have said, ineffective financial control is basically a result of the relevant policy or the connivance of the organizations concerned, the senior management of which have established friendly political relations with the Government. I am therefore very grateful to the Audit Commission for revealing so many problems, including the Hong Kong Music Festival which has received $2.5 million funding support from the MEF. It also has many problems …

(Mr Paul TSE stood up)

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MR PAUL TSE (in Cantonese): I am afraid that Mr Albert CHAN is going to repeat the criticisms made in the Director of Audit's reports paragraph by paragraph. Yet, they have nothing to do with the amendment under discussion.

CHAIRMAN (in Cantonese): Mr CHAN, let me remind you again that you should make good use of your speaking time.

MR ALBERT CHAN (in Cantonese): Chairman, people can choose to neglect the reports issued by the Audit Commission. However, Members approve funding applications from government departments and Policy Bureaux based on facts rather than personal preference. Powerful and wealthy political figures having political interactions with certain people may be shielded. I am using the concrete evidences provided by the Audit Commission to reveal cases of improper handling of funding. Thus, Chairman, it is appropriate and powerful to criticize certain government departments by citing the comments made by the Audit Commission. If anyone does not want to hear, he may simply walk out. Please do not interrupt when the Member is speaking. The muddled accounts …

CHAIRMAN (in Cantonese): Mr CHAN, you have used up half of your speaking time.

MR ALBERT CHAN (in Cantonese): Alright, I will switch to another topic. Chairman, just now I accused Members of allowing the muddled accounts to get through, which is basically a dereliction of duty, especially on the part of Members representing the tourism industry. This is shielding and connivance.

Chairman, the next item that I am going to focus on is Amendment No 810, which proposes to deduct head 147 by $123 million and is concerned with the Treasury Branch. Chairman, I want to highly commend the hard work of the staff from the Treasury Branch. Why would I propose a deduction of the expenditure of the Treasury Branch then? Because I cannot accept the financial estimates prepared by the Financial Secretary and his philosophy of financial management. Although the Treasury Bureau is tasked to help execute the order of the Financial Secretary, it should weaken his strength by all means if it 12026 LEGISLATIVE COUNCIL ─ 22 May 2014 disagrees with him, so that he can no longer implement policies which, in my opinion, has completely neglected the interests of members of the public, especially the grassroots. Therefore, I reiterate that the proposal to deduct the expenditure of the Treasury Branch does not represent my dissatisfaction with its front-line staff, but to express my indignation and resentment of the policy direction of the Financial Secretary. The Future Fund mentioned by Mr LEUNG Kwok-hung just now is one of the important points, but I am not going to repeat.

Concerning the numerous policy blunders of the Financial Secretary, as I have previously said, rates exemption and tax rebates are examples of transfer of interests. Without the help of the Treasury Branch, the relevant policies cannot be implemented. Outsourcing is another problem and has been discussed during the debate on other policy areas, so I am not going to repeat. Basically, I think the outsourcing of government projects, programmes and services is a form of exploitation and many outsourcing policies are implemented by the Treasury Branch. Regarding the wrong estimation made by the Financial Secretary, as it has been discussed time and again, there is no need to repeat.

I want to shed particular light on the Working Group on Long-term Fiscal Planning ("the Working Group"), which can be said to be the root of many policy blunders of the Government. The Working Group is comprised of the rightist economist Prof Francis LUI and the senior management of the "big four" accounting firms and financial organizations. As evident from the composition, all members are representatives of organizations with vested interests. As such, policies formulated by organizations with vested interests and all analysis made would definitely manipulate the Government, and particularly the Financial Secretary. Thus, when most policies are formulated by these people, it is inevitable that they would bias towards the interest of some and lead to transfer of interests. The management of public finance is a matter of distribution and re-distribution of public interests and public resources. Any favouritism towards a certain class will definitely result in exploitation of or unfair treatment against other classes, especially the grassroots.

Do you think those rightist academics or senior management of the accounting firms and financial organizations would care about the interests of members of the public or appreciate the hardships of the elderly people who collect carton paper? No, I do not think so. This is why they proposed tax rebates and rates exemption. Who would benefit from tax rebates? Tax LEGISLATIVE COUNCIL ─ 22 May 2014 12027 rebates would benefit the accountants because this would bring more businesses and profits for the accounting firms, which is indeed a transfer of interests. As the senior management of accounting firms, they would definitely create more financial arrangements (including tax rebates and rates exemption) to generate more work for accountants, thereby bringing more profits for the accounting firms. What is it if not transfer of interests?

The more one gets familiar with the operation of the entire framework, the more ridiculous it would appear to him. Inevitably, members of the public or the grassroots would suffer in the end. People who talk about the number of canned mud carp or luncheon meat that has been wasted have completely neglected the sufferings brought by this biased framework to members of the public. Looking back at the previous estimates, while the Government has recorded significant increases in reserves year after year, members of the public continue to live in pain. Relevant data has been provided time and again and there is no need for me to repeat here.

Amendment No 306 is concerned with the annual estimated expenditure for the Commerce and Economic Development Bureau (Communications and Technology Branch) on salaries under the item "Personal Emoluments". This amendment is also proposed by me, Chairman, to reduce the amount of expenditure from $135 million to $1,000, basically to reflect my dissatisfaction with Programme (1) Broadcasting and Creative Industries. Mr CHAN Chi-chuen has already made detailed explanation and criticisms about the policy blunders in respect of broadcasting, expressing resentment to the fact that Hong Kong's broadcasting policy has basically come to a standstill and even shrink. Companies who have been granted free TV licences earlier have yet to provide any services, whereas the company which is eager to provide services had been rejected and stopped for political reasons.

The Government has undertaken to develop community or local radio service since the 1990s. It has, particularly after the issuance of pay TV licences, undertaken to develop more radio services for the minority, and to rest the management, production and broadcasting of such radio services in the hands of the minority. And yet, the relevant proposals were nipped in the bud. The reason is simple, political consideration overrides. As broadcasting is the most powerful tool that can overthrow the Communist Party, it would certainly exercise control over this propaganda machine.

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It is this political bias that has crushed the Government's undertakings and people's aspirations for broadcasting development. While the non-issuance of licence to the Hong Kong Television Network Limited is a typical example, the experience of the radio station operated by "Tai Pan" is also a hard fact. For these reasons, I propose to delete the expenditure for the Communications and Technology Branch in this regard.

Chairman, with regard to the quorum, I will leave it to "Long Hair".

CHAIRMAN (in Cantonese): Does any other Member wish to speak?

MR PAUL TSE (in Cantonese): Chairman, when Mr Albert CHAN spoke just now, he has criticized at great length the operation of the Mega Events Fund (MEF), and towards the end of his speech, he said a Member representing the tourism industry has shielded and connived the relevant policy and operation of the MEF. May I ask Mr Albert CHAN to clarify who that Member is? According to his description, that Member should be me. I thus have to point out that, in accordance with Rules 41(4) and 41(5) of the Rules of Procedure, this is offensive and is indeed a criticism made to impute improper motives to another Member. In particular, the Public Accounts Committee to which I am a Member is examining the case of the MEF. His allegation is therefore very improper and offensive. Can he please elucidate?

CHAIRMAN (in Cantonese): Mr CHAN, when you mentioned earlier about a Member who has participated in tourism affairs, are you referring to Mr Paul TSE?

MR ALBERT CHAN (in Cantonese): Members may choose to fit themselves into the picture, but I am not interested to respond.

CHAIRMAN (in Cantonese): Mr CHAN, you have just made an allegation and Mr TSE considered that it was made against him. Will you elucidate?

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MR ALBERT CHAN (in Cantonese): Chairman, as I have said, I can do nothing to prevent anyone from fitting themselves into the picture. My analysis and remarks were made against certain historical background and backed up by justifications. Chairman, Members are free to interpret in their own way.

MR PAUL TSE (in Cantonese): This is absolutely not my own interpretation because I am the only one who cast doubt on his remarks, and he immediately made such a response. Thus, I have reasons to believe that he was directing against me on that occasion. However, I can do nothing if someone dares not admit what he has done.

MR ALBERT CHAN (in Cantonese): Chairman, if anyone who likes to admit that he is a lackey, let he be a lackey. I do not think I have to debate with someone who admits that he is a lackey, am I right?

CHAIRMAN (in Cantonese): It is now 10.05 pm and the joint debate will end at 10.30. Let me ask once again, does any other Member wish to speak?

MR LEUNG KWOK-HUNG (in Cantonese): Chairman, just now, you queried why I mentioned Elizabeth TSE and Secretary Prof K C CHAN in my speech. Now, I want to report to you. I would like to point out that according to this document I have with me, one of the aims under "Head 147 ― Government Secretariat: Financial Services and the Treasury Bureau (the Treasury Branch)" is to "improve Hong Kong's competitiveness and living environment by investing in major infrastructure projects". That is the duty of the Treasury Branch, or in other words, the origin of the "Future Fund". Separately, for "Matters Requiring Special Attention in 2014-15", it has been specified that the Treasury Branch will "pursue the recommendations from the Working Group on Long-Term Fiscal Planning, where adopted by the Government". In other words, our money has already been put into its pocket, and the work will proceed. Separately, it has been mentioned that the Treasury Branch will "promote adherence to the 'cost recovery' and 'user pay' principles". In other words, that is the reason for increasing water charge in future.

12030 LEGISLATIVE COUNCIL ─ 22 May 2014

How come we have to pay salaries to those people? Is there something wrong? I have not accused them wrongly. Why is it necessary to deduct their salaries? Just now, I told Members who are the Non-official Members in the Working Group on Long-Term Fiscal Planning (Working Group). As I just said, they are all staunch rightists. Chairman, regarding the official representatives, Elizabeth TSE is the Chairperson, with other Ex-officio Members including Mrs Helen CHAN, Government Economist. In other words, officials from the entire Treasury Branch are sitting on the Working Group. As such, if we have to hold the "Future Fund" accountable, who else but they should take the responsibility? As they have joined the Working Group, they are inviting trouble for themselves knowingly. Hence, it is appropriate for me to propose the deduction of their salaries. Apart from formulating ideas for the Financial Secretary and the Secretary, they also join the Working Group. How can I not deduct their salaries?

I will stop for now. But I am actually very upset and there is no reason why I should let them off the hook. Okay, I will leave it aside. Otherwise, you would say that you find my words irritating. Let me go back to Gregory SO. Now, I am speaking on Amendment Nos 898, 310 and 312 concerning head 55 and "Head 152 ― Government Secretariat: Commerce and Economic Development Bureau (Commerce, Industry and Tourism Branch)" covered in the fifth joint debate. All in all, they are related to Gregory SO and his subordinates about the issuance of domestic free television programme services licences (free TV licences).

Chairman, I think Mr CHAN Chi-chuen is really slow in reading between the lines. As he said, Secretary Gregory SO once pointed out that cut-throat competition would occur if more free TV licences were issued. That is exactly what happens now. Asia Television Limited (ATV) will continue to die slowly by cutting its own throat. Yesterday when I was riding on a taxi, I heard that an ATV programme called "News Bar Talk" has zero rating point. I also heard that some ATV programmes have only five rating points. On the other hand, now TV and Cable TV, which have been granted new free TV licences, make no move. These three companies have already cut their throats. This is indeed a cut-throat battle, with only Television Broadcasting Limited (TVB) left to monopolize the market.

Separately, I have to speak on behalf of the "Alliance of poor people who cannot afford to watch the World Cup matches". By its own estimate, the LEGISLATIVE COUNCIL ─ 22 May 2014 12031

Alliance has at least 1.5 million members who cannot watch the upcoming World Cup matches. That is the problem I have identified. As pointed out by Mr CHAN Chi-chuen just now, TVB is a free TV broadcaster in the first place, and people are free to watch the programmes on their mobile phones. On the other hand, the Government said out that no control would be imposed in this regard because "no offer" has been made. Buddy, it can only take in advertisement revenue because we are watching the programmes. That is the first point. Second, TVB will only broadcast 28 World Cup matches for free public viewing, while the remaining matches can only be viewed on its pay channels. TVB is operating free TV services. After acquiring the World Cup broadcasting right through its advantages of being a free TV broadcaster, it then charges the public for viewing. Buddy, what kind of government policy is that?

Hence, regarding the Mega Events Fund (MEF), Mr TSE needs not be afraid for I will not mention his name. Actually, the MEF should provide funds to buy back the broadcasting right of those football matches which will not be broadcast by TVB so that the public can watch them on the Internet or on a big screen set up in the Tamar Park. Buddy, that would be truly be a mega event for sharing the fun with the public, right?

CHAIRMAN (in Cantonese): Mr LEUNG, please do not stray away from the question.

MR LEUNG KWOK-HUNG (in Cantonese): Why can't I speak on the MEF? Other Members have talked about it.

CHAIRMAN (in Cantonese): Which amendment are you speaking on?

MR LEUNG KWOK-HUNG (in Cantonese): I would like to speak on the amendment concerning the MEF first, can I do so? It is related to the Hong Kong Tourism Board. You are remarkable. You have listened to my speech.

That is what the MEF should do. How can it approve funding to organize lion dances or dragon dances, but knows nothing about the exact uses of the money? They should also give an account to the Finance Committee as well. 12032 LEGISLATIVE COUNCIL ─ 22 May 2014

Buddy, that is so shameful. What kind of MEF is this? Now I must reiterate that I am speaking on behalf of the 1.5 million members of the "Alliance of poor people who cannot afford to watch the World Cup matches". The Hong Kong Government should use the funding allocated to the MEF to buy back TVB's exclusive broadcasting right of those football matches (other than the 28 matches) and broadcast them for public viewing everywhere, so that Hong Kong will truly become the "City of Life" …

CHAIRMAN (in Cantonese): Mr LEUNG, you have strayed away from the question, and you are repeating yourself.

MR LEUNG KWOK-HUNG (in Cantonese): Yes, that is because they say they have 1.5 million members and hence, they should have a greater weighting. Okay, members of the "Alliance of poor people who cannot afford to watch the World Cup matches", I have already expressed my view, but the Chairman told me not to say any more. Now let us return to the main issue.

Honestly, people will feel unhappy if they cannot watch the World Cup matches; Mr LEUNG Che-cheung, don't you agree? Chairman, Mr LEUNG Che-cheung would understand such feeling. Don't you know that he intends to install television sets in the shopping malls, so that poor people can also watch the matches? That is what the MEF should …

CHAIRMAN (in Cantonese): Mr LEUNG, do not stray away from the question.

MR LEUNG KWOK-HUNG (in Cantonese): Alright, I will talk about Gregory SO, the nice guy. Gregory SO is such a nice guy. First, he is so nice that he has taken the blame for his master. Regarding LEUNG Chun-ying's refusal to issue the free TV licence, Chairman, honestly, according to the laws … Mr CHAN Chi-chuen, under our unique licensing system which is unheard of anywhere in the world, only the Chief Executive alone can decide on the issuance of licences. Hence, Secretary Gregory SO actually does not have a final say in the matter.

LEGISLATIVE COUNCIL ─ 22 May 2014 12033

I hold him responsible for this matter because I want to reveal his lies. First, while it was the arbitrary decision of LEUNG Chun-ying alone, he issued a statement with five or six pages, giving many reasons for the decision. But I do not want to repeat them here because if the lies are often repeated, they could become contagious. We should not set a bad example for the children. In the statement, Gregory SO stated publicly that the decision had nothing to do with fearing TVB or politics. In other words, when he put forward his recommendation to the Chief Executive, firstly, it had nothing to do with politics, and secondly, he was not afraid of TVB. Simply put, when Gregory SO was telling these lies, he was telling other lies.

Chairman, I have nothing but sad memories about this matter. As a result of his action, people came to protest in the Legislative Council, and somebody kicked me on the foot, and I could not walk for a long time. Six months have passed before I can stand up again to speak to you. At that time, I insisted on attending the meetings even on a wheelchair because I wanted to investigate the matter by invoking the Legislative Council (Powers and Privileges) Ordinance. But the motion was not passed, and I could do nothing about it.

I would like to go back to the problems of Gregory SO. This is typically a case of "killing somebody with a borrowed knife". As one must die, he does not have much choice. But what is the reason behind his action? Because he must preserve ATV …

CHAIRMAN (in Cantonese): Mr LEUNG, the other two Members have already expressed many views on the proposal to deduct the emoluments of Secretary Gregory SO on account of the free TV licensing incident. Please refrain from repeating the same arguments tediously.

MR LEUNG KWOK-HUNG (in Cantonese): Can I express dissenting views? I am saying that Mr CHAN Chi-chuen is naive because the Chief Executive should bear the responsibility. What I mean is that Gregory SO should not have his salaries deducted. "Slow Beat", do you get it? Okay, he understands.

Next, what he has said was only partly true, and half of his words were lies. He said that it has nothing to do with politics or being afraid of TVB. In fact, he is afraid of the other television broadcaster, namely, ATV. Do you understand? 12034 LEGISLATIVE COUNCIL ─ 22 May 2014

ATV is bound to lose in this cut-throat batter. Chairman, come to think about it. When ATV has attracted so many criticisms and adverse comments, and its programmes have recorded zero rating points, which is record-breaking, what reasons can be given by the Government to save ATV when the time comes for renewing the existing free TV licences after the interim review? It cannot be saved.

At that time, only this fool, Ricky WONG, believed in the Secretary's words and proceeded to acquire land and make preparations. Indeed, the Secretary had worked painstakingly in this matter. Buddy, he really had not lied when he said that it was not because of politics or being afraid of TVB. The real cause was that he was afraid of ATV. It was really extremely difficult to save the "dying" ATV, let alone called it a strong competitor. Hence, he performed the role of a political spinner and eliminated its competitors so that ATV could still remain standing in the absence of other choices. By rejecting one of the three applications, he ensured that Ricky WONG would have no part to play in the same platform when the time came for another round of elimination in future. Hence, Mr CHAN Chi-chuen should not scold the Secretary for he had made painstaking efforts in this matter.

Another reason why Secretary Gregory SO should not have his salaries deducted is that he has remained very calm when answering our questions. Honestly, as we can see, LEUNG Chun-ying's performance is not always consistent, and he was somewhat unintelligible when he spoke today. On the other hand, Gregory SO has remained very calm, no matter the question came from Mr TSANG or Mr CHAN, and he looked the same even when "Long Hair" hurled objects at him. Honestly, he should not be called a "human flesh recorder" but a "human flesh time machine", for he always answers our questions in the same way as if time has stood still. Honestly, I have met many officials before, and Secretary Gregory SO is really very calm and composed as if he is swayed by nothing. He still wears a smile even when his lies are uncovered. Hence, in my view, the second reason is that Mr CHAN Chi-chuen has no knowledge about the rule of thumb of being bureaucrats. In short, a bureaucrat must always remain calm and totally unfazed no matter anything good or bad has happened. Therefore, in case any Member might become an Under Secretary in future, he must look upon Secretary Gregory SO as a model and act in the same way when telling the truth or lies.

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Moreover, there is another example which shows Secretary Gregory SO's calmness, that is, when he said that he had no reason to resign. Isn't that some excellent excuse? In fact, Anthony CHEUNG has also copied his act. It is clear that the act of a good Secretary will soon be followed by another Secretary. Recently, Secretary Prof Anthony CHEUNG has always remained composed in front of the media. Lately, when he attended the meeting of a particular committee on behalf of the Government, he said that he would definitely resign if he was found to be at fault. This is also the line toed by Gregory SO when he fails to answer the questions confronting him. He would say, "Although what you say is true, I can give no reason for it. But there is still no reason for me to resign." Mr CHAN Chi-chuen has to treat his attitude seriously. Actually, it is not simple at all for a Secretary to go to such lengths to defend the Government, especially in front of some uncivilized and impolite Members.

Chairman, there is another point I want to say. With his outstanding performance, calmness and pragmatism, he has almost caught up with another even more outstanding Secretary, namely, Eddie NG, in terms of their popularity rating. With his popularity rating plummeted 24 points, it is a tight race between them. Given that I have not sought to deduct Eddie NG's salaries last time, I would not deduct Gregory SO's salaries. If Mr CHAN Chi-chuen has any dissenting views, he is free to voice them out.

Chairman, in my view, Gregory SO should not have his salaries deducted. If compared with TUNG Chee-hwa and Donald TSANG, he is at least neither stupid nor greedy. Thank you, Chairman.

CHAIRMAN (in Cantonese): There is about 10 minutes left in this joint debate. Does any other Member wish to speak?

(Mr CHAN Chi-chuen raised his hand to indicate a wish to speak)

CHAIRMAN (in Cantonese): Mr CHAN Chi-chuen, this is the last time you speak in this joint debate.

12036 LEGISLATIVE COUNCIL ─ 22 May 2014

MR CHAN CHI-CHUEN (in Cantonese): Chairman, due to time constraint, I will not argue with Mr LEUNG Kwok-hung over whether Gregory SO should be responsible for the controversy concerning the issuance or otherwise of domestic free television programme services licences (free TV licences). But I insist that Gregory SO's salaries should be deducted, at least by half. In that case, it will bring us to Amendment No 902 proposed by Mr Gary FAN. If "one single man" should be held fully responsible for the free TV licensing incident, that "one single man in Council" (that is, the Chief Executive in Council) has confounded right and wrong, such that the decision to grant a licence has been reversed. But regarding the incident on mobile television (TV) services, the Office of the Communications Authority (OFCA) must take the blame for "playing foul" and neglecting its duty. The OFCA is under the purview of the Commerce and Economic Development Bureau.

As I mentioned just now, it has been clearly specified under the terms and conditions of the licensing agreement of the two free TV licencees that they are not allowed to provide mobile TV services, but the OFCA insists that Television Broadcasting Limited (TVB) and Asia Television Limited (ATV) have not contravened their licensing agreements. Given that the two free TV licencees are providing free TV services without the need to make an offer to the audience, and Hong Kong Television Network Limited (HKTVN) will also provide free mobile TV services in future without any intention of making an offer to the audience, why does HKTVN have to apply for another licence for its mobile TV services? Does it mean that the existing licences for mobile TV services issued via bidding are meaningless? Moreover, while the OFCA should only act as the umpire, it has also acted partially towards TVB and ATV. As a matter of fact, the OFCA is primarily biased towards TVB for ATV programmes are hardly watched by any audience, let alone through mobile services. The OFCA has not only sided with TVB to attack HKTVN, but also acted as its defence lawyer. Isn't that foul play and negligence of duty?

Given that the two free TV licencees have no control over the reception of its programme signals through mobile devices such as mobile phones, HKTVN likewise has no control over the reception of signals by viewers at home or the viewing of its programmes via the computer. Regarding the OFCA's suggestion that HKTVN could consider encryption or changing to another transmission standard, Ricky WONG asked what if in future, new television sets would have built-in decoders for HKTVN's transmission standard, so that viewers can watch its programmes right away. In that case, would HKTVN contravene the LEGISLATIVE COUNCIL ─ 22 May 2014 12037 requirement that its mobile TV services should not be available for reception by more than 5 000 premises? What about the use of decoders by viewers even if HKTVN has encrypted its signals? Hence, it is actually an impossible mission. How can the OFCA shift its responsibility to the operators or licencees? In my view, this is blatantly commercial fraud. I am extremely furious about the Administration's practice of granting the relevant licence through tender when the licence is in fact useless due to the abovementioned impossible task.

Do officials of the Commerce and Economic Development Bureau (Communications and Technology Branch) realize that as an executive authority, the OFCA should adhere to its mission and values by maintaining neutrality and impartiality, as well as providing a fair regulatory environment conducive to innovation and business investment? But in the mobile TV services incident, the OFCA has seemingly resorted to citing and interpreting the relevant laws and regulations selectively, such that nothing has been mentioned about the unfavourable provisions while detailed explanation has been given to the favourable ones. It clearly illustrates the OFCA's bureaucratic red-tape and impartiality. But I will leave the matter to the Court's judgment in the judicial review.

More regrettably, the Commerce and Economic Development Bureau is now proposing the establishment of the Innovation and Technology Bureau to take over part of its duties. All along, I maintain that it is merely a bloated structure. Later, I will use my last breath to explain why Gregory SO's salaries should at least be deducted by half. But what I want to say now is that the Government's most urgent task is to review the Telecommunications Ordinance (TO) and the Broadcasting Ordinance (BO). There is no denying that both the TO and BO have failed to keep up with the times as well as technological development. But instead of dealing with the problem squarely, the Government just focuses on inflating its structure with the establishment of the Innovation and Technology Bureau or what we call the "Happy Bureau". Policy matters in respect of communications and telecommunications were originally under the information and technology bureau, but they will now fall under the Innovation and Technology Bureau.

Lastly, I must explain the reasons why Gregory SO's salaries should at least be deducted by half. That is because of the Innovation and Technology Bureau. First of all, after its establishment, the Innovation and Technology Bureau will be in charge of the Innovation and Technology Commission (ITC) and the Office of 12038 LEGISLATIVE COUNCIL ─ 22 May 2014 the Government Chief Information Officer (OGCIO). These two are only small existing departments under the Government's structure. I once asked whether the Government had any information technology (IT) departments before LEUNG Chun-ying and Gregory SO assumed office. The answer is in the affirmative: IT departments have already existed before the establishment of the Innovation and Technology Bureau. Given that the whole process involves splitting up an existing Bureau, establishing a bloated structure, and then recruiting suitable candidates for the offices of Secretary, Under Secretary and Political Assistant, as well as appointing a suitable candidate from the civil Service to be the Permanent Secretary, does it mean that the incumbent Secretary cannot perform his duties properly? I once put this question to Gregory SO. Of course, he could not answer such a question himself. He could not say he had done a good job because in that case, the status quo should remain, obviating the need to establish a new Bureau to take over these duties from his Bureau. If he replied that he could not perform his duties properly, he should be dismissed to make room for a more capable Secretary who might be able to undertake the duties in all three areas.

It makes no sense at all for Gregory SO to establish the new Bureau. The matter should at least be handled by the Financial Secretary, John TSANG. But as we all know, John TSANG is not keen about the proposal of five Secretaries of Departments and 14 Directors of Bureaux or the Information and Technology Bureau (now called the Innovation and Technology Bureau). Hence, he is not in the Chamber now. Gregory SO cannot answer this question for he cannot assess his own performance. Today I had meant to raise this question with LEUNG Chun-ying, but I did not get the opportunity. Although I had pressed the button, I could not have my turn. All in all, Gregory SO should have his salaries deducted by half for failing to provide the rationale for establishing the Innovation and Technology Bureau.

Although I have asked numerous questions and seriously scrutinized the proposed restructuring, I still cannot find any new policy area under the Innovation and Technology Bureau's purview. Is it possible for the Commerce and Economic Development Bureau to have an additional Permanent Secretary, to be called the Permanent Secretary for Commerce and Economic Development (Innovation and Technology), so that Gregory SO can take charge of the third policy area? Another alternative is to recruit a new Director of Bureau outside the Civil Service so that he can take charge of the Communications and Technology Branch split from the Commerce and Economic Development LEGISLATIVE COUNCIL ─ 22 May 2014 12039

Bureau. Why is Gregory SO given the responsibility to sell the proposed Innovation and Technology Bureau? He has not answered this question at all. Perhaps owing to his present ranking, he is not in a position to do so and the question could only be answered by higher officials. People who design this set-up know very well that Gregory SO cannot do so, either because he is incapable or constrained by the establishment or his rank is not high enough. At the end of the day, he cannot do it. In fact, this is a move to curtail his power or reduce his workload. With such deployment, why should he still receive his salaries in full? Hence, Mr Gary FAN proposes Amendment No 902 to deduct an amount of provisions roughly equivalent to the estimated expenditure for the office of Secretary for Commerce and Economic Development for six months, that is, by 50%.

If Members help me pass this amendment, I will consider lobbying Mr Albert CHAN for his agreement not to filibuster when it comes to the proposal to establish the Innovation and Technology Bureau. Fanny LAW, wait and see how your new set-up can work if half of his salaries are deducted. In fact, the plan has been mapped out clearly from the outset. While the new Secretary will take over the uncontroversial matters, tacky issues such as telecommunications, broadcasting, renewal of the two free TV licences and issuance of new TV licences are left to be handled by the incumbent Secretary so that the new Director of Bureau can avoid becoming a negative asset or a Secretary with negative popularity right from the start. In fact, Secretary Gregory SO is pitiful for his powers have been cut, and he must continue to work with the sticky matters while the goodies are bagged by the new Bureau. However, from an establishment point of view, the Secretary's work will definitely be reduced and hence, he should receive an automatic pay cut.

Okay, I must make good use of the remaining speaking time. I would like to speak about "Head 47 ― Government Secretariat: Office of the Government Chief Information Officer", which would come under the Innovation and Technology Bureau in future. It looks as if I am targeting the OGCIO for the seven amendments from Nos 197 to 203 are all proposed by me. I will only focus on two matters. The scope of the Digital 21 Strategy is just too wide to be covered in a few minutes' time. I would like to speak about two matters, namely, providing Government Wi-Fi (GovWiFi) services and strengthening support to bureaux and departments in developing mobile applications for e-Government services. I have also followed up on these matters specifically at the relevant special Finance Committee meeting.

12040 LEGISLATIVE COUNCIL ─ 22 May 2014

Let us take a look at the matters requiring special attention in 2014-2015 as stated by the Government. According to the Government, it will further extend the GovWiFi service to more government premises, including leisure locations such as beaches, major district parks and harbourfront promenades, as well as popular focal points. Moreover, the Government states that the OGCIO has provided GovWiFi services in around 400 existing and 40 new government premises. I would like to point out that in many locations, GovWiFi services are in fact "bogus". In other words, there is no reception. I have already queried whether the relevant figures have been exaggerated. What is meant by "bogus" Wi-Fi services? Let me show Members some evidence tonight.

The Tai Kok Tsui Sports Centre (the Sports Centre) is one of the locations provided with GovWiFi services. But members of the public have pointed out that there is no Wi-Fi signal throughout the entire Sports Centre. According to the Government's reply, there are only two Wi-Fi hotspots in the lift lobby of the Sports Centre. Hence, no Wi-Fi signal can be received in the conference room, the fitness room, the three activity rooms or the children's play room. Hence, it is "bogus" Wi-Fi service. Upon our follow-up enquiry, the Government shows us another plan as proof of Wi-Fi service. But according to the plan, Wi-Fi signals can only be received in the lift lobby and the first aid room, while there is no reception in other parts of the main building, including the play room, the activity rooms, the conference room and the fitness room. As such, the Government can even claim that 1 000 hotspots have been provided. There is only one hotspot in the entire Hong Kong Coliseum, and Wi-Fi signals can only be received outside the main entrance. There is no Wi-Fi reception at all once inside the venue. Is that not an act of cheating the public with exaggerated figures? Chairman, we must be reasonable in whatever we do. You have to be reasonable even when cutting off the filibuster. Do you think that such provision is reasonable at all? Only two hotspots have been provided throughout the vast coverage of the Sports Centre, and Wi-Fi signals cannot be received in other locations except the hallway outside the first aid room and the lift lobby. In that case, we might as well do without GovWiFi services.

Regarding the second issue, I invariably become very angry whenever this matter is brought up, that is, the waste of public money incurred by the OGCIO in co-ordinating the mobile applications (that is, applications for mobile phones and tablet computers) of various government departments. I will only cite the worst examples, without going into the rest. An application developed for the Drainage Services Department at a cost of $206,800 has only been downloaded 356 times. I do not even bother to calculate the cost of each download. Create LEGISLATIVE COUNCIL ─ 22 May 2014 12041

Hong Kong is under the purview of Gregory SO's bureau. An application called "Inspiration Sparks HK" with development and routine maintenance cost at $360,000 has been downloaded 729 times. That is already quite outstanding. The most "outstanding" application goes to the "Red Tide Information Network" developed for the Agriculture, Fisheries and Conservation Department (AFCD) at a cost of $128,000. Do Members know how many times this application has been downloaded? The answer is 10 times. Isn't that ridiculous? What has been done by the OGCIO in respect of promotion? The application would have been downloaded for more than 10 times even by the staff of the AFCD themselves or the officers of the OGCIO for testing purposes, right? This application has the same fate as the constitutional reform proposal put forward by Anson CHAN or some particular scholars on 6 May, which was only supported by a handful of people, including even their own friends and allies. Isn't that a waste of public money?

Separately, the OGCIO has a new scheme with the aim of reaching out to "hidden" elders and teaching them to use tablet computers. But the scheme only involves one hands-on session for the elders. What is supposed to be done by the elders afterwards? Now I present this challenge to the OGCIO. In Sweden, an application for referendum has been developed by the Government. If LEUNG Chun-ying is so keen to follow the example of Sweden or has such a high regard for public opinion, the Government should develop and operate an application for holding a referendum on civic nomination, in order to gauge the public's view as to whether the proposal of civic nomination should be rejected for contravening the Basic Law. Does the Chief Executive dare to allocate these resources to develop an official application to conduct opinion polls for Hong Kong's general public?

CHAIRMAN (in Cantonese): This joint debate has now come to a close.

CLERK (in Cantonese): Heads 53, 63, 70, 90, 95, 156, 173 and 190.

CHAIRMAN (in Cantonese): Committee now proceeds to the sixth joint debate.

(Mr LEUNG Kwok-hung stood up)

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MR LEUNG KWOK-HUNG (in Cantonese): I request a headcount.

CHAIRMAN (in Cantonese): Will the Clerk please ring the bell to summon Members back to the Chamber.

(After the summoning bell had been rung, a number of Members returned to the Chamber)

CHAIRMAN (in Cantonese): Committee now proceeds to the sixth joint debate. The theme of this debate is "Population, Youth, Education, Manpower, Arts and Culture and Sports". The policy areas covered in this debate are, namely, population, youth, education, manpower, arts and culture, as well as sports.

Mr CHAN Chi-chuen, Mr LEUNG Kwok-hung, Mr Albert CHAN, Mr WONG Yuk-man, Dr Helena WONG and Mr WU Chi-wai have respectively given notice to move a total of 228 amendments to deduct various sums from eight heads of expenditure including heads 53, 63, 70, 90, 95, 156, 173 and 190. The contents of their amendments are all relevant to the policy areas covered in this debate.

I will first call upon Mr CHAN Chi-chuen to speak and move Amendment No 247 as set out in Appendix 1E attached to the Script.

MR CHAN CHI-CHUEN (in Cantonese): Chairman, I move Amendment No 247 as set out in Appendix 1E attached to the Script, which sought to resolve that head 53 be reduced by $1,507,102,000 in respect of subhead 000. That is to reduce the annual estimated expenditure for the Home Affairs Bureau to $1,000.

This Council has come to the last part of the joint debate, which involves a total of 228 amendments proposed by six Members. Apart from Mr LEUNG Kwok-hung, Mr Albert CHAN and I, Mr WONG Yuk-man, Dr Helena WONG and Mr WU Chi-wai have also proposed amendments. I have proposed 23 amendments in this joint debate, of which eight are concerned with the Home Affairs Bureau, seven are concerned with the Homes Affairs Department, one is concerned with the Immigration Department, four are concerned with the Labour Department and three are concerned with the Education Bureau. First of all, I would like to speak on the amendments concerning the Home Affairs Bureau.

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There are a total of 58 amendments concerning the Home Affairs Bureau, and I will first speak on Amendment Nos 259 and 260 proposed by me and Mr LEUNG Kwok-hung respectively. The contents are indeed the same. Both sought to resolve that head 53 be reduced by $77.6 million in respect of subhead 000, which is roughly equivalent to the annual estimated expenditure for the Home Affairs Bureau on the Youth Square (the Square).

Regarding the proposed reduction of the estimated expenditure for the Square, I certainly need to say something about its history. The TUNG Chee-hwa Government spent more than $800 million to build the Square in Chai Wan, which is pretty remote ― though I do not consider places accessible by MTR too remote, this is the general feedback from the community ― it is therefore difficult to attract young people from other districts (especially the New Territories) to visit the Square. As a result, it suffered persistent losses and substantial rent discount ranging from 30% to 50% have been provided for tenants. Subsequently, the authorities have even sublet a number of venues to institutions like the Hong Kong Academy for Performing Arts so as to barely increase the utilization rate and make the account less unsightly. Yet, this has not only departed from the original policy intent of establishing the Square to promote youth development, but has also failed to comply with the self-financing principle.

The Square, opened in 2010, covers an area of 40 000 sq m. It is comprised of a main building and a hostel, but the latter has all along recorded a low utilization rate of 34%. Only 50% of the activities organized in the Square are related to young people, and the rest has departed from the objective. Venues will be rented out so long as people want to hire them, disregarding if they are used for organizing health talks for elderly people or press conferences on building management. How can it promote youth development in that case? Given that we will grow old or are living with elderly people, we should better attend these talks. The utilization rates of retail shop and office space are even worse, and only 11% was rented to non-profit-making youth organizations.

The Audit Commission (the Commission) hurled serious criticisms against this situation two years ago, stating that the Square had suffered losses year after year upon commissioning, amounting to $42.9 million and $33.2 million for the first two years. Although the operation is government-funded and the focus is neither cost-effectiveness nor profit ― this is easy to understand, Government and taxpayers' support would not be needed if the profits can be made; and if good profits can be made, many businessmen would be willing to operate 12044 LEGISLATIVE COUNCIL ─ 22 May 2014 business there ― the amount of losses should be contained or the Government should exercise control over its account. The Government originally estimated that the Square would suffer an annual loss of $5 million, but it turned out that it incurred a loss of $44.9 million in the first year, and $33.2 million in the second year, which is seven and five times of the estimated loss. This is mainly because the management fee paid to the contractor, the New World Facilities Management Company Limited (the New World), has significantly increased by 86%, totalling $370 million, while the rental income received was lower than expected.

Furthermore, the Commission also queried the absence of a focal theme and a clear image for the Square, thereby failing to attract youth associations or organizations to organize activities promoting youth development. Worse still, youth organizations considered the hostel and facility hiring charges unaffordable, and the majority of the hostel guests are tourists, it has therefore failed to serve the local users or target users.

Noting the continuous losses of the Square, the Home Affairs Bureau has advised the Legislative Council earlier that some rescue packages would be introduced. It has decided, for example, to offer a greater discount of 70% for the hiring charge of the Y-Platform in the hope of boosting the utilization rate with cheaper rent. This is because the Square has not only failed to achieve full cost recovery, but has also recorded a low utilization rate, which is undesirable.

Last year, the Square also launched a scheme to attract young people and non-profit-making organizations to hire venues at certain time slots for free trial. Nonetheless, the venues are not new. If the three-month free trial is offered for new venues, it may attract many visitors and hirers. However, it is supposed to be some sort of rescue measures to attract young people to come during the time slots for free trial. What is the result then? Only 30 units have hired the venues for free trial within those four months. As a result, the authorities have reluctantly adjusted the Square's target cost-recovery ratio to 50% only, with the rest subsidized by public coffers. It is estimated that an additional annual expenditure of some $30 million would be incurred to sustain the operation of the Square.

With the introduction of the extremely low rent policy, the Home Affairs Bureau and the Square have been able to turn the situation around. Instead of having nine out of 10 shops or offices vacant, now that only five or a couple of shops or offices are vacant. After a Director of Audit report revealed the low utilization rate and heavy losses of the Square, the management company LEGISLATIVE COUNCIL ─ 22 May 2014 12045 concerned has invited organizations, including tutorial schools and non-profit-making organizations, to move in from time to time. So long as they are willing to move in, the Square is ready to give up any policy principle and objective. The policy of promoting youth development now exists only in name, or does not exist at all. In the end, some 30 shops have been rented out.

However, recently, there have been reports ― Members can see that there is no prepared script for my speech ― a tenancy dispute relating to the Square came to light last Saturday. When tenants whose tenancy agreements are about to expire by next month met with the management company earlier, they discovered that the non-profit-making organizations now enjoy an increased concession rate from 50% to 70%, and the priority to renew tenancies for two years. This has aroused the concern of existing tenants, who feared that their shops might be seized at any time. A tenant operating a tutorial school lashed out at the management company for going back on its words, which is very bad. If non-profit-making organizations intend to rent the shops ― which were previously open to rental for the general public ― the concession rate offered to them has increased from 50% to 70%, which is unfair to shop operators who have been lured to open business at the outset (such as the abovementioned tutorial school). This is why they said the management company has gone back on its words by kicking them out. They claimed that two years ago, staff of the management company had made an oral undertaking to give them priority to renew tenancies, vowing that "existing tenants would enjoy the priority right to renew tenancies provided that they paid rent on time and comply with the rules."

The tenant (that is, the person-in-charge of the tutorial school) said if the management company has not lobbied him in this way, he would not have spent tens of thousands of dollars on refurbishment and publicity to establish his small-scale business. He therefore suspected that the management company has cheated the shop tenants. After they moved in to boost the low utilization rate, the management company now intended to kick them out. The tutorial school currently has more than 70 students, and the parents worried the relocation of the tutorial school might affect their children. Therefore, they co-signed a letter requesting the management company to renew the tenancy with the tutorial school. The case is pretty similar to that of the kindergarten in Tin Shui Wai. Of course, tutorial schools can hardly draw any attention and Secretary Eddie NG would not help in any way. They should perhaps seek help from Secretary TSANG Tak-sing.

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The New World, being responsible for management, shielded themselves behind the Government's objective of establishing the Square, vowing that the Square seeks to serve as a focal point for youth-related activities, thus youth groups and non-profit-making organizations should enjoy priority tenancy right. According to the terms of the tenancy agreements, tenants such as tutorial school do not enjoy the priority right of tenancy renewal. Tenancy renewal must go through a public tender process, to be followed by an evaluation of the Management Advisory Committee before approval is granted by the evaluation group.

Up to this point, do Members find the Square very ridiculous? The Home Affairs Bureau subsequently responded, saying that, "The management company but not the Home Affairs Bureau is responsible for the leasing of the Square." Thus, in case there is any problem, Members should not approach Secretary TSANG Tak-sing, but should go and hold the management company, that is, the New World, responsible. It then went on to say that the management company has been requested to "deal with tenancy matters following established procedures", which is again bureaucratic parlance. As I have just said ― the Chairman would accuse me of being repetitive if I repeat ― the original objectives and targets of the Square would be used as an excuse to silent the small operators and tenants who have rented shops in the Square when its utilization rate was extremely low.

The case has precisely highlighted how weird the Square is, which was established to provide development venues for the youths. According to the Administration, the objectives of establishing the Square are (let me read them out): to serve as a focal point for territory-wide youth development activities in Hong Kong (that is, to seek development in Chai Wan); to provide facilities and venues for promoting youth development and training; and to provide the steer and support for non-governmental organizations involved in youth development work.

Obviously, these development targets were tailored-made for the application of funding and I supposed the $800 million required for the establishment of the Square had sought the approval of the Legislative Council, right? (Someone answered in the positive) Of course, it has. These targets, however, have been adjusted when leasing was inactive, and it seems that they can be disregarded so long as the shops are rented out. When leasing turns active, the targets will be used as a defence. It seems to me that the management LEGISLATIVE COUNCIL ─ 22 May 2014 12047 company has no responsibility at all and only needs to express its sympathy. Shielded behind the policy targets, it has even deprived other tenants of any priority rights and asked them to leave. May I ask what kind of Government this is? Should we not reduce (The buzzer sounded) … the expenditure for this Square, Chairman?

Mr CHAN Chi-chuen moved the following motion:

"RESOLVED that head 53 be reduced by $1,507,102,000 in respect of subhead 000."

SUSPENSION OF MEETING

CHAIRMAN (in Cantonese): I now suspend the meeting until 9 am tomorrow.

Suspended accordingly at two minutes past Eleven o'clock.