LEGISLATIVE COUNCIL ─ 9 April 2014 9517
OFFICIAL RECORD OF PROCEEDINGS
Wednesday, 9 April 2014
The Council met at Eleven 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 LEE CHEUK-YAN
THE HONOURABLE JAMES TO KUN-SUN
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 TOMMY CHEUNG YU-YAN, S.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.
9518 LEGISLATIVE COUNCIL ─ 9 April 2014
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.
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 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 ALBERT CHAN WAI-YIP
LEGISLATIVE COUNCIL ─ 9 April 2014 9519
THE HONOURABLE WONG YUK-MAN
THE HONOURABLE CLAUDIA MO
THE HONOURABLE MICHAEL TIEN PUK-SUN, B.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 WU CHI-WAI, M.H.
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
9520 LEGISLATIVE COUNCIL ─ 9 April 2014
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.
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.
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 CYD HO SAU-LAN
THE HONOURABLE LEUNG KWOK-HUNG
THE HONOURABLE JAMES TIEN PEI-CHUN, G.B.S., J.P.
DR THE HONOURABLE FERNANDO CHEUNG CHIU-HUNG
THE HONOURABLE TANG KA-PIU LEGISLATIVE COUNCIL ─ 9 April 2014 9521
PUBLIC OFFICERS ATTENDING:
THE HONOURABLE MRS CARRIE LAM CHENG YUET-NGOR, G.B.S., J.P. THE CHIEF SECRETARY FOR ADMINISTRATION
THE HONOURABLE JOHN TSANG CHUN-WAH, G.B.M., J.P. THE FINANCIAL SECRETARY
PROF THE HONOURABLE ANTHONY CHEUNG BING-LEUNG, G.B.S., J.P. SECRETARY FOR TRANSPORT AND HOUSING
MS FLORENCE HUI HIU-FAI, S.B.S., J.P. SECRETARY FOR HOME AFFAIRS
MR JAMES HENRY LAU JR., J.P. SECRETARY FOR FINANCIAL SERVICES AND THE TREASURY (pm)
THE HONOURABLE LAI TUNG-KWOK, S.B.S., I.D.S.M., J.P. SECRETARY FOR SECURITY
THE HONOURABLE EDDIE NG HAK-KIM, S.B.S., J.P. SECRETARY FOR EDUCATION
THE HONOURABLE PAUL TANG KWOK-WAI, J.P. SECRETARY FOR THE CIVIL SERVICE
DR THE HONOURABLE KO WING-MAN, B.B.S., J.P. SECRETARY FOR FOOD AND HEALTH
THE HONOURABLE PAUL CHAN MO-PO, M.H., J.P. SECRETARY FOR DEVELOPMENT
MR SHIU SIN-POR, S.B.S., J.P. HEAD, CENTRAL POLICY UNIT
9522 LEGISLATIVE COUNCIL ─ 9 April 2014
PROF SOPHIA CHAN SIU-CHEE, J.P. UNDER SECRETARY FOR FOOD AND HEALTH
MR JAMES HENRY LAU JR., J.P. UNDER SECRETARY FOR FINANCIAL SERVICES AND THE TREASURY (am)
CLERKS IN ATTENDANCE:
MR KENNETH CHEN WEI-ON, S.B.S., SECRETARY GENERAL
MRS JUSTINA LAM CHENG BO-LING, DEPUTY SECRETARY GENERAL
MR ANDY LAU KWOK-CHEONG, ASSISTANT SECRETARY GENERAL
MISS ODELIA LEUNG HING-YEE, ASSISTANT SECRETARY GENERAL
LEGISLATIVE COUNCIL ─ 9 April 2014 9523
TABLING OF PAPERS
The following papers were laid on the table under Rule 21(2) of the Rules of Procedure:
Subsidiary Legislation/Instruments L.N. No.
Pesticides Ordinance (Amendment of Schedule 1) Notice 2014 ...... 43/2014
Immigration (Anchorages and Landing Places) (Amendment) Order 2014 ...... 46/2014
Shipping and Port Control Regulations (Amendment of Seventh Schedule) Notice 2014 ...... 47/2014
Other Paper
Report No. 15/13-14 of the House Committee on Consideration of Subsidiary Legislation and Other Instruments
WRITTEN ANSWERS TO QUESTIONS
Cases of Judicial Review
1. MR RONNY TONG (in Chinese): President, will the Government inform this Council, since the establishment of the Hong Kong Special Administrative Region:
(1) of the respective annual numbers of applications for judicial review (JR) (regardless of whether the Government is one of the litigating parties) and, among them, the numbers of cases in which leave was granted by the Court; and the respective percentages of those ruled in favour of or against the plaintiffs in JR cases;
9524 LEGISLATIVE COUNCIL ─ 9 April 2014
(2) of the respective annual numbers of legal aid applications received and approved by the Legal Aid Department (LAD) in respect of JR cases; and
(3) of the respective percentages of JR cases ruled in favour of or against the Government each year?
SECRETARY FOR JUSTICE (in Chinese): President,
(1) Statistics provided by the Judiciary on applications for leave to apply for JR for the period from 1997 to 2013 are set out in Annex 1.
(2) According to the LAD, it has maintained statistics on legal aid applications for JR since 2001. Statistics provided by the LAD on legal aid applications in respect of JR cases and the number of cases with legal aid granted from 2001 to 2013 are set out in Annex 2.
(3) Regarding the JR cases heard in the Court of Final Appeal and the High Court from 1997 to 2013 in which the Government was involved, the respective percentages of outcome in favour of or against the Government each year are set out in Annex 3.
Annex 1
Statistics provided by the Judiciary on Applications for Leave to Apply for JR (1997 to 2013)
Outcome of Number of Applications Leave Applications Year for Leave to Apply for JR filed (as at 24.2.2014) (JR for Right of Abode cases are in brackets) Granted Refused 1997 112 (NA) 1998 105 (NA) 1999 147 (NA) 2000 2 752 (NA) 2001 3 848 (3 732) 2002 204 (102) 2003 131 (6) 2004 150 (4) LEGISLATIVE COUNCIL ─ 9 April 2014 9525
Outcome of Number of Applications Leave Applications Year for Leave to Apply for JR filed (as at 24.2.2014) (JR for Right of Abode cases are in brackets) Granted Refused 2005 155 (6) 2006 132 (0) 2007 143 (0) 2008 147 (0) 67 66 2009 144 (0) 67 72 2010 134 (0) 68 58 2011 103 (0) 51 40 2012 161 (0) 63 80 2013 182 (0) 38 72
Notes:
(1) Statistics on number of JR for right of abode cases were not kept before 2001. Also, statistics on outcome of leave applications were not kept before 2008.
(2) Statistics on outcome of leave applications may vary at different report generation date and time since they are live data. Such statistics only take into account the number of leave applications with leave granted or leave refused as at report generation date. There are also other cases with leave withdrawn or application transferred or pending for outcome for which they are not reflected herein.
Annex 2
Statistics provided by the LAD on legal aid applications in respect of JR cases (2001 to 2013)
Number of legal aid applications Number of cases with legal aid Year in respect of JR granted for JR 2001 147 20 2002 144 17 2003 146 20 2004 125 18 2005 180 24 2006 174 42 2007 234 99 2008 364 190 2009 552 200 9526 LEGISLATIVE COUNCIL ─ 9 April 2014
Number of legal aid applications Number of cases with legal aid Year in respect of JR granted for JR 2010 268 93 2011 229 58 2012 506 92 2013 432 119
Note:
Apart from the above legal aid applications for JR, the LAD also receives applications for legal aid in respect of immigration related matters which may involve JR proceedings. However, the LAD has not maintained separate record on the number of such cases.
Annex 3
Percentages of outcome in favour of or against the Government in respect of JR cases heard in the Court of Final Appeal and the High Court in which the Government was involved (1997 to 2013)
Year In Favour Not in Favour 1997 69% 31% 1998 84% 16% 1999 79% 21% 2000 98% 2% 2001 64% 36% 2002 99.5% 0.5% 2003 86% 14% 2004 82% 18% 2005 78% 22% 2006 83% 17% 2007 80% 20% 2008 73% 27% 2009 72% 28% 2010 82% 18% 2011 71% 29% 2012 78% 22% 2013 68% 32%
LEGISLATIVE COUNCIL ─ 9 April 2014 9527
Ancillary Facilities for Cycling and Promotion of Cycling Tourism
2. MISS CHAN YUEN-HAN (in Chinese): President, it is learnt that quite a number of neighbouring countries and regions are proactively promoting cycling tourism to let visitors experience local street cultures and enjoy the natural landscape by means of low-carbon tourism. Those countries and regions offer visitors affordable bicycle rental services through public-private partnerships and provide suggested routes for cycling tours. They also conduct relevant courses to reduce conflicts between cyclists and other road users. Regarding the ancillary facilities for cycling and promotion of cycling tourism, will the Government inform this Council:
(1) whether it knows the details of "SmartBike", which will soon be launched officially; of the number of times the bicycles were hired and the expenditure on repairs and maintenance during the trial run of such service; the plans put in place by the authorities to promote the service, when they will conduct an interim assessment on the effectiveness of the service, and the timetable for extending the service to other districts;
(2) of the numbers of Hong Kong residents and visitors who were prosecuted for illegal cycling on pedestrian ways or carriageways in the past three years; the first five districts where the highest number of such offences occurred and the relevant figures; whether the authorities have conducted studies on visitors cycling in Hong Kong during their visits and, drawing reference from overseas practices, formulated policies on promoting cycling tourism; if they have, of the details; if not, the reasons for not conducting the relevant studies with a view to promoting low-carbon tourism and providing diversified ways of touring;
(3) how the authorities implemented last year the improvement measures recommended in the report of the Traffic and Transport Consultancy Study on Cycling Networks and Parking Facilities in Existing New Towns in Hong Kong (the Study), including those on the improvement works for cycle track networks, cycle parking 9528 LEGISLATIVE COUNCIL ─ 9 April 2014
facilities, directional road signs, and so on, together with a breakdown by the anticipated year of completion; and
(4) whether it has drawn reference from the experience of overseas countries and regions in promoting safe cycling and introduced courses to enhance cyclists' road safety awareness; if it has, of the details; if not, the reasons for that?
SECRETARY FOR TRANSPORT AND HOUSING (in Chinese): President, my reply to the various parts of Miss CHAN Yuen-han's question is as follows:
(1) "SmartBike" is a cycling programme launched by the West Kowloon Cultural District Authority (WKCDA) to complement the future provision of cycle tracks in the park within the West Kowloon Cultural District (WKCD) for recreational and leisure uses by the public, and to encourage visitors to use bicycle as a sustainable commuting mode within the WKCD in future. It is understood that the WKCDA has appointed the Tung Wah Group of Hospitals BiciLine Cycling Eco-Tourism Social Enterprise (BiciLine) to operate and promote the programme, which will commence starting from mid-April 2014 in phases. In order to strike a balance between the expectation of the community and the operational cost, the basic bicycle rental fee will be fixed at HK$20 per hour. The WKCDA will assess the effectiveness of the service with BiciLine after it is launched for a certain period of time.
A free trial run of the programme with 20 bikes offered on a first-come-first-served basis was arranged on 15 designated days in February 2014. About 1 600 people participated during the said period. The WKCDA does not have information at the moment on the repair and maintenance costs as the programme is still at the trial stage.
The Government will keep in view the development of the relevant public bicycle rental system, and consider the appropriateness of LEGISLATIVE COUNCIL ─ 9 April 2014 9529
extending similar systems to other districts. There is no timetable at the moment.
(2) The number of prosecutions instituted against local residents for illegal cycling on footpaths and non-footpaths from 2011 to 2013, and the top five police districts with the highest number of prosecutions instituted against illegal cycling and the respective figures in 2013, are set out at Annex. No prosecutions have been instituted against visitors for illegal cycling during the same period.
The Government has not conducted any research at the moment on the use of bicycles by overseas visitors during their stay in Hong Kong. Nonetheless, the Government, through the Hong Kong Tourism Board (HKTB), has been promoting green tourism and outdoor activities like hiking and cycling to diversify our tourism offerings, with a view to enhancing Hong Kong's appeal as a premier tourist destination. In the past five years, the HKTB has been promoting green tourism through the "Great Outdoors Hong Kong" marketing platform to provide overseas visitors with guided hiking and cycling tours, encouraging visitors to explore various hiking trails, outlying islands and cycling routes which feature different scenic views and themes.
In addition, the HKTB plans to collaborate with relevant departments and organizations to host the first "Hong Kong Cycling Festival" in October 2014. The tentative starting and finishing points of the race route are in Central. There will be different categories for contestants of different levels to join.
(3) In March 2013, the Transport Department (TD) completed the Study. Based on the preliminary improvement measures recommended by the consultant, a pilot scheme has been implemented in Tai Po to assess the effectiveness of the measures. The majority of improvement works under the pilot scheme have been substantially completed. The TD is assessing the effectiveness of these new improvement measures, and the assessment is expected to be completed in the second half of 2014.
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To further implement the improvement measures recommended in the Study in other new towns, the TD has commissioned a feasibility study under which the existing cycling facilities in nine new towns (that is, Sha Tin/Ma On Shan, Tai Po, Fanling/Sheung Shui, Tin Shui Wai, Yuen Long, Tuen Mun, Tsuen Wan, Tung Chung and Tseung Kwan O) requiring improvement will be thoroughly examined. Suitable improvement proposals and implementation timetables will be formulated for each location.
The TD is consulting relevant district councils and other stakeholders on the feasibility study. Once the improvement proposals are finalized, the TD will devise a work schedule.
(4) The Government has all along attached great importance to cycling safety. The Road Safety Council (RSC) organizes the Safe Cycling Training Programme to educate primary and secondary students about the safety rules of cycling. Under the programme, professionals are invited to introduce the protective gear that should be worn during cycling, as well as how to choose, check and adjust bicycles, and so on. Besides, the RSC publishes the Safe Cycling Training Programme Handbook for distribution to students participating in the programme. The Handbook is also put on the RSC's website for downloading by the public. In 2013, about 1 900 students from 40 primary schools and 1 100 students from 21 secondary schools joined the training programme.
In addition, the TD, the police and the RSC have been enhancing public awareness of cycling safety through publicity and education, such as producing educational videos and Announcements in the Public Interest, providing information about cycling safety on the TD's website and organizing carnivals, distributing leaflets on promoting cycling safety, and so on.
The Government will continue to take reference from the practices and experience in other places regarding cycling safety.
LEGISLATIVE COUNCIL ─ 9 April 2014 9531
Annex
Number of prosecutions instituted against local residents for illegal cycling from 2011 to 2013
Locations where illegal cycling occurred 2011 2012 2013 Footpaths 4 625 5 703 8 098 Non-footpaths 4 029 6 169 5 511 Total 8 654 11 872 13 609
Top five police districts with the highest number of prosecutions instituted against illegal cycling and the respective figures in 2013
Police district Number of prosecutions 1. Yuen Long 3 415 2. Tai Po 2 626 3. Sha Tin 1 486 4. Tuen Mun 1 049 5. Kwun Tong 282
Assistance for Property Owners in Carrying Out Building Maintenance Works
3. MR JAMES TO (in Chinese): President, a group of property owners staged a procession last month requesting the Government to seriously address the problem that some lawbreakers secured contracts for major maintenance projects of some buildings by means of bid-rigging, bribing, and so on. On the other hand, most minority property owners have no knowledge of whether the project fees are reasonable. In this connection, will the Government inform this Council:
(1) as the Appendix to the Building Maintenance Guidebook (the Guidebook) prepared by the Buildings Department (BD) lists the reference costs for 29 types of general maintenance works (which involve re-roofing; refurbishment of external walls, internal walls, internal floors and internal ceilings; spalling repair; plumbing and drainage; electrical works; maintenance of doors and windows, and so on), but such costs were prepared on the basis of information as 9532 LEGISLATIVE COUNCIL ─ 9 April 2014
at 2001, whether the authorities have the latest reference costs; if they do, of the details, with a breakdown in tables of the same format as that of the Appendix to the Guidebook; if not, the reasons for that;
(2) as the Appendix to the Guidebook also contains case analyses which provide reference fee scale for the services provided by building professionals in the market in carrying out building inspections, assessment and supervision of maintenance works, of the time of the information on which the fees were based, and whether the authorities have the latest reference costs; if they do, of the details with examples (such as the reference costs for general consultation and construction fees for carrying out a project involving basic refurbishment of external walls, waterproof roofing and replacement of drain pipes of a single-block residential building with some 20 storeys and 150 flats, as well as the difference between the cost reference for refurbishing external walls with paint and that with mosaic); if not, the reasons for that;
(3) for buildings which are not targets of "Operation Building Bright" but the maintenance works of which will be carried out, of the measures put in place by the authorities to assist owners of such buildings in assessing whether the service fees and project costs quoted by the building professionals and contractors to be engaged are reasonable, and in preventing lawbreakers from securing contracts for major maintenance projects of their buildings by means of bid-rigging and bribing;
(4) as the authorities will introduce the "AP Easy" Building Maintenance Advisory Service Scheme this month, whether the Scheme will provide owners with reference costs or reasonable fee ranges concerning the proposed building maintenance works; and
(5) whether the authorities will consider amending the Building Management Ordinance (Cap. 344) (BMO) and related ordinances to enhance regulation of owners' corporations (OCs) and companies bidding for building maintenance works so as to curb bid-rigging; if they will, of the anticipated time for conducting public consultation and introducing the legislative proposal to this Council?
LEGISLATIVE COUNCIL ─ 9 April 2014 9533
SECRETARY FOR DEVELOPMENT (in Chinese): President, property owners have a responsibility for maintaining their buildings. The Government and its partner organizations, including the Hong Kong Housing Society (HKHS) and the Urban Renewal Authority (URA), have been providing various financial and technical assistance schemes to offer assistance to owners in need for maintaining and repairing their properties. The Home Affairs Department (HAD) also offers assistance from the building management perspective to OCs intending to carry out building maintenance works. Moreover, the Independent Commission Against Corruption (ICAC) and the Hong Kong Police Force (HKPF) work together and adopt a multi-pronged approach, including launching publicity and education programmes, strengthening support for owners and OCs, and carrying out investigation and enforcement actions, to prevent unlawful activities arising from maintenance works.
Having consulted the HAD, ICAC and HKPF, my reply to the five part question is as follows:
(1) and (2)
In 2001, the BD compiled a Building Maintenance Guidebook which served as a general reference for owners on how to resolve maintenance problems. The Appendices to the Guidebook, namely "Cost Reference for General Maintenance Works" and "Sample Cases", were compiled according to the information provided at the time by building professionals and management experts. Since then, the BD has not compiled similar maintenance guidebook.
Being the enforcement agency, the BD will only arrange government contractors to carry out necessary repair works in a small number of non-compliance cases under the principle of ensuring building safety and removing obvious danger. Therefore, the data on maintenance costs so collected are very limited. As the data on maintenance costs only cover the most basic requirements of the repair orders, they are very different from those buildings maintenance works in larger scale. As the costs of building maintenance works are subject to many factors, such as the scale of works, work items and choice of material, it is difficult for the BD to provide the fees of building maintenance for public reference. For this reason, we do 9534 LEGISLATIVE COUNCIL ─ 9 April 2014
not intend to provide such information in future. Nevertheless, relevant professional bodies such as the Hong Kong Institute of Surveyors (HKIS) have analysed the data it collected and published fee levels on professional consultancy service for building inspection and building maintenance works, which can serve as reference for owners in need.
(3) Apart from the Operation Building Bright, building owners in need can obtain assistance through various funding schemes, including the Integrated Building Maintenance Assistance Scheme (IBMAS), the Building Maintenance Grant Scheme for Elderly Owners, the Comprehensive Building Safety Improvement Loan Scheme and the Mandatory Building Inspection Subsidy Scheme, in order to maintain and repair their properties. The HKHS and the URA have also set up a dedicated hotline and will soon launch a one-stop website to facilitate the public in making enquiry about the information on the funding schemes and maintenance works.
The HKHS and the URA provide technical support to help owners carry out maintenance works through the above funding schemes. Regarding individual scheme like IBMAS, the two implementation agencies will not only formulate and issue guidelines on maintenance works, but also engage independent professional consultants to assess the maintenance costs for the buildings under application and give advice to applicants to help them understand if the costs are in line with the market level and make the appropriate decisions. Besides, the two agencies also arrange briefings or attend OCs' meetings to provide technical support on building maintenance works and tender procedures to facilitate the proper conduct of tender procedures.
On the publicity and education front, the ICAC and the HKPF, in collaboration with the HAD, URA and the HKHS, and so on, have been providing OCs and owners with information on corruption and crime prevention as well as guidelines on the tendering of building maintenance works. Pursuant to the BMO, the HAD has issued the Code of Practice on Procurement of Supplies, Goods and Services and the Code of Practice on Building Management and Maintenance LEGISLATIVE COUNCIL ─ 9 April 2014 9535
so that OCs can follow the rules and principles therein in the course of planning and tendering. Moreover, the ICAC also published the new edition of the Building Maintenance Toolkit in mid-December last year, offering more effective anti-corruption advice on building maintenance as well as providing checklists and templates for OCs' and owners' reference. At district level, District Offices and the ICAC frequently organize education and publicity activities to promote integrity building management in 18 districts. The ICAC also visits OCs to elucidate anti-corruption laws and point out the areas that are prone to corruption and bribery. Through the RenoSafe Scheme, the HKPF provides OCs intending to carry out building maintenance works with booklets, listing out possible crimes arising from improper handling of building maintenance works and offering advice on crime prevention. For buildings that have participated in the Scheme, posters or banners will be displayed at conspicuous positions of the building to strengthen publicity and deterrent effect.
On the law-enforcement front, the ICAC and the HKPF have been actively following up on and investigating all complaints and reported cases. Recently, the HKPF has set up a special working group under its Organized Crime and Triad Bureau. Through the newly launched RenoSafe Scheme, the respective District Anti-Triad Squad will maintain direct contact with OCs and owners concerned, and invite them to report to the police information of crime relating to building maintenance works with a view to stepping up its intelligence gathering efforts.
(4) The HAD, in collaboration with the HKIS, the Hong Kong Institution of Engineers and the Hong Kong Institute of Architects will launch an "AP Easy" Building Maintenance Advisory Service Scheme ("AP Easy" Scheme) on a pilot basis for one year. Under the "AP Easy" Scheme, expert teams comprising building maintenance professionals (including surveyors, engineers and architects) will provide in-depth, comprehensive and tailor-made professional advice to OCs intending to carry out building maintenance works but without professional support of building management company. The expert teams will, having regard to the 9536 LEGISLATIVE COUNCIL ─ 9 April 2014
actual circumstances and needs of individual buildings, render professional advice to OCs on engaging consultants/authorized persons, in particular, on matters like drafting tender documents/contracts and analysing the tenders, and so on, to help OCs select suitable consultants/authorized persons for conducting the maintenance works.
The hiring of consultants/authorized persons is the first phase for carrying out building maintenance works. As the scheme does not cover the tendering for the specific maintenance works in the second phase, no information on the relevant maintenance fees can be obtained through this pilot scheme for owners' reference.
(5) The BMO provides a legal framework to facilitate formation of OCs by owners and the carrying out of proper building management work in accordance with the requirements of the BMO.
Regarding the requirements on meetings and resolutions of OCs, it is stipulated in section 5(1) of Schedule 3 to the BMO that the quorum at a meeting of the corporation shall be 10% of the owners. According to section 3(3) of Schedule 3 to the BMO, all matters arising at a meeting of the corporation shall be decided by a majority of the votes of the owners voting either personally or by proxy. Furthermore, it is required under section 20A of the BMO that any supplies, goods or services the value of which exceeds or is likely to exceed the sum of $200,000 or a sum which is equivalent to 20% of the annual budget of the corporation, whichever is the lesser, shall be procured by invitation to tender.
The quorum at a meeting of the corporation and the percentage of votes of owners required for passing resolutions are one of the issues examined by the Review Committee on the Building Management Ordinance (Review Committee). The HAD is considering and following up the Review Committee's recommendations, with a view to consulting stakeholders and the public on the amendment proposals for the BMO later this year.
LEGISLATIVE COUNCIL ─ 9 April 2014 9537
Monitoring Safety of Railway Systems
4. MR ALBERT HO (in Chinese): President, recently, the occurrence of incidents one after another involving the railway systems of the MTR Corporation Limited (MTRCL), coupled with the press reports that some of the newly procured MTR trains may contain materials harmful to the human body, have aroused public concerns about the safety of railway systems. Regarding the monitoring of the safety of railway systems, will the Government inform this Council:
(1) of the details of the follow-up actions taken by the Railways Branch of the Electrical and Mechanical Services Department (EMSD) last year in respect of each railway incident (including whether it accepted the reports submitted by the MTRCL, and whether it conducted further investigations into the contents of these reports, and so on), and set out such information in a table;
(2) apart from inspecting the trains before their formal commissioning and monitoring through the government representatives on the Board of Directors of the MTRCL, whether the Government has, at present, requested the MTRCL to provide, on a regular basis, information on the quality of the newly procured trains (including the technical problems encountered in the tests conducted at the manufacturing sites); if it has not, whether it will consider requesting the MTRCL to provide such information; and
(3) given that the Hong Kong section of the Guangzhou-Shenzhen-Hong Kong Express Rail Link (XRL) is expected to be commissioned in 2015, whether the Government knows the present progress of the procurement of XRL trains (including whether technical or design problems have been identified in the tests on the trains); if it knows, of the details; if not, whether the Government will request the MTRCL to allow the direct participation of or supervision by the EMSD staff in the tests on the trains conducted outside Hong Kong?
SECRETARY FOR TRANSPORT AND HOUSING (in Chinese): President, the operation of a safe, reliable and efficient railway service is paramount to the public transport system in Hong Kong. With respect to train service reliability, 9538 LEGISLATIVE COUNCIL ─ 9 April 2014 the number of incidents of eight minutes or above caused by equipment failure or human factors of the railway network (MTR) operated by the MTRCL was 143 last year, the lowest since the rail merger in December 2007. Despite not showing any downward trend in the safety and reliability of MTR train service in accordance with the overall statistics, the Government considers that, under the service-oriented premise, immediate and in-depth investigation into every train service incident must be carried out by the MTRCL, followed by improvement measures to prevent future recurrence. Being the railway safety regulator, the EMSD will also conduct investigations and follow up with the MTRCL.
As the causes of the recent major service disruption incidents were respectively attributable to the installation of overhead lines and the quality of insulators used, the successive occurrence of these incidents may be a sign of systemic defects of the overhead line system. As such, we believe that an in-depth review by an independent expert is necessary for public reassurance. The Government agrees with the MTRCL's engagement of an overseas independent expert to conduct a comprehensive review on the MTR overhead line system, covering technical specifications, procurement, quality control, installation and repairs/maintenance.
In parallel, the EMSD will actively participate in the MTRCL's tests of the insulators and verify the findings. The EMSD will also engage an independent expert to evaluate the outcome of the MTRCL's expert review. The participation of double independent experts in the review will ensure an in-depth, comprehensive, objective and professional study. Upon the completion of the two expert reports, the Government will, having regard to the findings, decide whether there is a need to expand the scope of the review to cover other areas of the MTR network.
Regarding the news reports on possible asbestos content on MTR trains, it is specifically stated in the MTRCL's procurement contracts that no material containing asbestos can be used in the manufacture of trains. To ease public concerns, the MTRCL has followed the Environmental Protection Department's guidelines on asbestos testing and arranged a Hong Kong laboratory to conduct tests on 22 trains newly purchased from the Changchun Railway Vehicles Co. Ltd. and 10 trains to be operated along the future South Island Line (East). The test results confirmed that the trains are asbestos-free. The MTRCL will continue to strive for good quality control of its trains, to ensure compliance of the contractual requirement of no asbestos content on trains. The factory-based LEGISLATIVE COUNCIL ─ 9 April 2014 9539
MTR personnel will from time to time remind the manufacturers to adhere strictly to such requirement.
My reply to the various parts of Mr Albert HO's question is as follows:
(1) Whenever there are incidents concerning railway safety requiring investigation, the Railways Branch (RB) of the EMSD will carry out inspections to find out the causes, identify appropriate improvement measures to prevent recurrence, and ensure that the MTRCL has duly and fully implemented them.
Under the Mass Transit Railway Regulations (Cap. 556A), the MTRCL shall report to RB all safety-related incidents that take place within the railway premises. The MTRCL submitted 671 investigation reports on railway incidents(1) to RB in 2013, describing details of the incidents, assessment by the MTRCL and follow-up actions taken. RB will review all incident investigation reports and, if necessary, seek additional information from the MTRCL. In case of major railway incidents that may undermine railway safety, RB will make further investigations. In 2013, RB issued to the MTRCL a total of 20 recommendations, mainly on improvements to station equipment, rail tracks, tunnels, trains and power systems. The MTRCL has accepted and followed up on all these recommendations.
The abovementioned railway incidents can be correlated to equipment and human factors of staff members, passenger or public behavioural factors as well as external factors. The breakdown of last year's incidents categorized by their causes is as follows:
Causes of incidents Number of incidents in 2013 Equipment failure 17 Staff behaviour 44 Passenger or public behaviour 578 External factors 32 Total 671
(1) Excluding incidents involving escalators, lifts and other facilities outside the platform and track areas. 9540 LEGISLATIVE COUNCIL ─ 9 April 2014
Among these incidents, over 90% were caused by passenger or public behaviour and other external factors, including passengers requiring transferring to hospitals due to sicknesses, passengers making last-minute entry/exit being caught by the closing train doors, trespassing on railway tracks, and train operation being affected by fallen trees during typhoon. The remaining cases (less than 10%) are attributable to the failure of railway equipment and staff behaviour.
(2) All along, the MTRCL adopts rigorous quality management procedures for testing newly purchased trains to validate their compliance with performance standards. Such tests include the basic quality checks, dimensional checks, functional tests (for example, tests on braking and traction systems, train door operation, communication function, train control function and watertightness, and so on), and running operational tests to confirm that the trains are manufactured according to the design and relevant standards. All new trains will only be put into service after they have passed all the required safety and performance tests and received approval from the EMSD and the Transport Department.
The MTRCL staff are deployed to oversee the key production processes in the factories of system suppliers and manufacturers. Suppliers are required to submit test results to the MTRCL, and the MTRCL will attend and witness functional tests of different systems and components, such as the traction system, train doors, braking system, pantographs and trainborne signalling system, and so on. The MTRCL also appoints international experts as independent safety auditors to verify the designs and testing processes of safety-related equipment and systems, including train doors, traction system, couplers, trainborne signalling system, interface of signalling system, wheels and axles, and so on. This is to ensure that the procedures comply with international safety specifications.
Upon arrival in Hong Kong, new trains are subject to the static and dynamic tests to validate that their operation integrates with the existing infrastructure and railway system.
The various tests as set out above are conducted by the MTRCL on newly purchased trains to identify any irregularities for immediate LEGISLATIVE COUNCIL ─ 9 April 2014 9541
rectification. The EMSD will also pay close attention to participate timely in on-site tests conducted in Hong Kong. Trains are put into service only if their safe operation is confirmed after stringent validation.
(3) The MTRCL has been entrusted by the Government to implement the Hong Kong section of the XRL. Construction of the Hong Kong section of the XRL commenced in January 2010 and is targeted for completion in 2015. Thereafter, testing and trial runs of the railway systems (taking six to nine months in general) will be conducted to ensure safety and reliability of the railway service before the XRL is open.
Railway safety has always been our top priority in taking forward the XRL project. The regulation of various aspects of railway safety in Hong Kong is based on relevant international standards, including EN15227 (the European Union standard on crashworthiness for trains). The MTRCL is required to submit relevant information to the EMSD to prove that when the train is operating in actual conditions, its safety performance can achieve the safety level of international standards. The trains of the Hong Kong section of XRL are manufactured by CSR Qingdao Sifang Co. Ltd. The MTRCL has been supervising closely the design and manufacturing process of the trains and signalling system; and has introduced monitoring measures and independent expert assessments throughout the various processes so as to ensure compliance with international safety standards and Mainland railway safety requirements.
Prior to the opening of the Hong Kong section of the XRL, new trains will have to pass multiple testing, including factory acceptance test, system integration test and on-site test, to ensure that the trains have achieved the required safety level in accordance with international standards. The EMSD will assess the test reports submitted by the MTRCL and take part in the on-site test in Hong Kong before approving the operation of the new trains.
The first XRL train has been assembled and is undergoing testing in the Mainland. Main-frame assembly of the second and third XRL trains commenced in the fourth quarter of 2013.
9542 LEGISLATIVE COUNCIL ─ 9 April 2014
Assistance to Stall Tenants in Public Markets
5. MR LEUNG YIU-CHUNG (in Chinese): President, some stall tenants in the public markets under the Food and Environmental Hygiene Department (FEHD) have relayed to me that some public markets are poorly ventilated and their vacancy rates are on the high side, resulting in low patronage, which makes it difficult for them to do business there. In this connection, will the Government inform this Council:
(1) of the overall vacancy rate of public markets in each of the past five years; whether it has conducted a study on the vacancy situation and the causes for it; if it has, of the outcome of the study and whether it has formulated measures to reduce the vacancy rate; if it has, of the details; if it has not formulated any measure, the reasons for that;
(2) whether it has found that some stalls in public markets are used only for storage rather than sale of goods; if it has, of the details and whether it has studied the impacts of this situation on the patronage of the markets; if it has not studied, of the reasons for that;
(3) given that upon installation of air-conditioning (A/C) systems in public markets, stall tenants will have to share recurrent expenses such as extra electricity charges, repair and maintenance costs of the A/C systems, whether it will study the provision of subsidies to stall tenants to encourage them to agree to the installation of A/C systems so as to improve the patronage of the markets; if it will provide subsidies, of the form of subsidies and the implementation timetable; if it will not provide subsidies, the reasons for that; and
(4) whether it will step up the promotion of public markets to increase its patronage and reduce the rents of stalls to alleviate stall tenants' business difficulties; if it will, of the details; if not, the reasons for that?
SECRETARY FOR FOOD AND HEALTH (in Chinese): President, in December 2013, the Government commissioned a consultant to develop LEGISLATIVE COUNCIL ─ 9 April 2014 9543 proposals for improving the operating environment of public markets to enable them to fulfil their functions befitting their positioning. If the study progresses smoothly, the consultant is expected to submit the preliminary study findings in mid-2014.
My reply to the various parts of the question is as follows:
(1) At present, there are 76 public markets selling mainly fresh provisions and other dry and wet goods, as well as 25 free-standing cooked food markets under the management of the FEHD, providing a total of some 14 440 stalls. The overall vacancy rate of public markets in each of the past five years is set out in Annex.
The occupancy of public markets is influenced by many factors, such as competition from retail outlets selling similar commodities in the vicinity and demographic changes in the district. In order to better utilize stalls that have been left vacant for a long time because of their poor locations, the FEHD has since February 2009 lowered the upset auction prices to 80% and 60% of the open market rental for stalls which have been left vacant for six months and eight months respectively, for the purpose of enhancing their attractiveness. As at February 2014, a total of 2 452 stalls were let out through this arrangement. In addition, starting from July 2009, the FEHD has gradually introduced service trades, light refreshment and bakery stalls with a view to diversifying the services provided in public markets. Under this scheme, a total of 114 stalls have been let out for service trades, light refreshment and bakery stalls so far. Since October 2010, the FEHD has also let out small stalls through short-term tenancy on a trial basis to allow more flexibility for prospective tenants so as to increase the occupancy rate of public markets.
(2) Some tenants in public markets need extra space for storage due to the small size of their stalls. The FEHD will lease long-standing vacant stalls and stalls in poor locations to existing tenants in the same market for storage purposes, as a means to forestall the practice of storing goods in passageways or on the top of the stalls. For stall 9544 LEGISLATIVE COUNCIL ─ 9 April 2014
operators who use their stalls only for storage rather than business purposes as required under the terms of tenancy, the FEHD will take appropriate actions against them for breaches of tenancy agreements. Since 2013, 16 stall operators had their tenancy terminated due to breaches of tenancy terms whilst 15 terminated the tenancy agreements on their own initiative during the course of investigation.
(3) Under the current practice, whilst the Government is responsible for the costs of installing the A/C system and its subsequent large-scale or system maintenance, the electricity charges and daily maintenance costs are borne by stall tenants pro rata to the floor area of their respective stalls. In keeping with the user-pays principle, we consider that this arrangement should remain unchanged.
(4) To boost customer flows in public markets, the FEHD will continue to organize promotional activities, including thematic exhibitions, workshops and festive celebrations, display recipes in various languages, as well as publish booklets and the quarterly "Market Newsletter" to provide updated market information.
There has been no adjustment to the rentals of public market stalls since 1998. The rental freeze period has been extended several times to 31 December 2015. We consider that there is no room for further reduction in rentals.
Annex
Vacancy Rate as at 31 December 2009 2010 2011 2012 2013 Overall Vacancy Rate 18.0% 16.9% 12.4% 10.5% 9.6%
Note:
In calculating the overall vacancy rates shown in the table above, vacant stalls withheld from letting out due to impending consolidation or improvement works in markets and cook food markets were included.
LEGISLATIVE COUNCIL ─ 9 April 2014 9545
Progress of Granting Domestic Free Television Programme Service Licences
6. MR MA FUNG-KWOK (in Chinese): President, on 15 October last year, the Chief Executive in Council decided that the applications for a domestic free television programme service licence (licence) from the Fantastic Television Limited and Hong Kong Television Entertainment Company Limited (licence applicants) be granted approval-in-principle. It has been more than five months since the authorities made that decision, but the progress of granting the licences has not yet been announced. Some members of the public have relayed to me that the public hope that the new licensees can start broadcasting expeditiously to offer more television programmes for their choices, and to boost the development of the local television industry. In this connection, will the Government inform this Council:
(1) of the respective progress of the outstanding work relating to the two aforesaid licence applications; whether it knows when the Communications Authority (CA) will start discussing with the two licence applicants the details of the licences;
(2) when the CA is expected to submit to the Chief Executive in Council its recommendation on whether or not licences should be formally granted to the two licence applicants, and when the latter is expected to make the relevant decisions; of the earliest time the authorities expect the two licence applicants to start broadcasting after the issuance of the licences; and
(3) whether the authorities will specify in the licences that the licensees are required to produce or procure a specified quantity of locally produced programmes, so as to boost the development of local television production?
SECRETARY FOR COMMERCE AND ECONOMIC DEVELOPMENT (in Chinese): President, on 15 October 2013, the Government announced that the Chief Executive in Council had decided to grant approval-in-principle to the applications for domestic free television programme service (free TV) licences from Fantastic Television Limited (Fantastic TV) and HK Television Entertainment Company Limited (HKTVE), subject to the Chief Executive in 9546 LEGISLATIVE COUNCIL ─ 9 April 2014
Council's further review and final determination under the Broadcasting Ordinance (Cap. 562) at the Second Stage.
My reply to the three-part question is as follows:
(1) and (2)
The CA has immediately proceeded with the follow-up work after the announcement of the decision. Specifically, the CA has required Fantastic TV and HKTVE to submit further information on a number of issues as follows:
(i) an updated free TV licence application reflecting changes agreed since the first submission;
(ii) further information, including statutory declarations, undertakings and legal opinions, for the purpose of verifying the corporate status of Fantastic TV and HKTVE after the proposed corporate restructuring;
(iii) confirmation that the proposed free TV services will not be "bundled" with any transmission or television programme service which is available only on a subscription basis;
(iv) undertaking that the existing users or viewers of the domestic pay television programme service provided by an affiliate of the Fantastic TV and HKTVE will be entitled to view their respective proposed free TV service regardless of whether the viewers continue to subscribe for the domestic pay television programme service of that affiliate; and
(v) confirmation that the Fantastic TV and HKTVE will not act as mere "content providers" supplying programme materials to any of its affiliates who is a domestic pay television programme service licensee.
The CA is reviewing the further information submitted by the Fantastic TV and HKTVE, and their applications. Meanwhile, the CA has just issued the draft licences to the two applicants, following LEGISLATIVE COUNCIL ─ 9 April 2014 9547
which the CA will discuss with them the proposed licence conditions therein.
Subject to submission of all the relevant information by the two applicants and the progress of their corporate restructuring, the CA will complete the assessment as soon as possible and submit to the Chief Executive in Council recommendations on whether a free TV licence should be formally granted to each of the two applicants and the associated licence conditions. Upon receipt of such recommendations from the CA, the Chief Executive in Council will make the final determination as soon as possible with a view to bringing more quality programme choices to the public soon.
According to the proposals put forward by the Fantastic TV and HKTVE in their applications, the two applicants would commence the integrated Cantonese and English channels within 12 months and 24 months respectively from the grant of licences.
(3) We believe that the CA will take into account the views of the public and stakeholders during its discussion with the two applicants on the proposed licence conditions and consider whether requirements should be imposed in relation to locally produced programmes. In coming to a decision, the Chief Executive in Council will also take into account the CA's recommendations and public views.
Protection of Aviation Safety
7. MR CHAN KIN-POR (in Chinese): President, it has been reported that a civilian passenger aircraft went missing over the waters near Vietnam on the 8th of last month, and subsequent investigation uncovered that some passengers might have boarded the plane on passports which had been reported missing. As pointed out by the International Criminal Police Organization, the relevant information on those passports has long been listed in the Stolen and Lost Travel Documents database (passport database). Although the database contains information on more than 40 million stolen and lost passports issued by a number of countries, the law-enforcement departments of only a small number of countries have systematically made use of the database for passport checking. Regarding protection of aviation safety, will the Government inform this Council:
9548 LEGISLATIVE COUNCIL ─ 9 April 2014
(1) of the number of cases in the past three years in which residents of Hong Kong reported their Hong Kong Special Administrative Region (HKSAR) passports missing, and the distribution of the locations at which the passports were lost or stolen; the number of cases in which people entering or departing Hong Kong with fake passports or other people's passports were intercepted by the authorities during the same period, the nationalities of the people concerned, and whether the authorities are aware of the illegal activities they intended to engage in at the destinations;
(2) whether the authorities proactively and systematically searched and perused the information in the passport database in the past three years; if they did not, of the reasons for that; whether the authorities have established a separate database for HKSAR passports which have been reported missing; if they have, of the details; if not, the reasons for that; and
(3) whether it has, in response to the aforesaid incident, reviewed the procedures for conducting passport and security checks on air passengers; if it has, of the details, including whether it will implement improvement measures to ensure the safety of aircraft departing Hong Kong?
SECRETARY FOR SECURITY (in Chinese): President, the reply is as follows:
(1) Over the past three years, the number of HKSAR passports reported lost and the locations where they were lost is set out as follows:
Number of HKSAR Lost in Lost outside Year passports reported lost Hong Kong Hong Kong 2011 8 439 6 906 1 533 2012 9 437 7 745 1 692 2013 10 676 8 829 1 847 Total 28 552 23 480 5 072
LEGISLATIVE COUNCIL ─ 9 April 2014 9549
Over the same period, the number of forged travel documents detected at the Hong Kong International Airport (HKIA) by the Immigration Department (ImmD), including using forged documents, lost documents and documents relating to other persons is set out as follows:
Year Number of forged travel documents detected at the HKIA 2011 444 2012 335 2013 402 Total 1 181
The ImmD does not maintain other breakdown statistics mentioned in the question.
As we understand it, the main purpose of people using forged travel documents is to conceal their true identities or previous adverse records, so as to enable them to engage in illegal activities such as employment, travel or residence through entering or transitting through Hong Kong to overseas countries or regions.
(2) Through an established mechanism, the ImmD maintains close liaison with overseas, Mainland and local law-enforcement agencies and actively exchanges information concerning problematic travel documents with them. Under existing arrangements, details of stolen, invalidated or lost travel documents reported by the competent issuing authority (including HKSAR passports) will be placed in the watchlist. Any person attempting to use problematic travel documents to enter or depart Hong Kong commits an offence and is liable upon conviction to a maximum penalty of 14 years' imprisonment.
Immigration officers at the control points are trained in examination of travel documents and they will continue to maintain vigilance in conducting arrival and departure clearance to stop anyone from using problematic travel documents to enter or depart Hong Kong. In case a suspect travel document is encountered, immigration officers will conduct further examination on the passenger concerned and 9550 LEGISLATIVE COUNCIL ─ 9 April 2014
seek further verification from the issuing or appropriate authority when necessary. Moreover, the ImmD's Anti-illegal Migration Agency stops and inspects suspicious arriving and departing air passengers and examines their travel documents with a view to preventing forged travel documents from being used in illegal migration activities in Hong Kong.
(3) Aviation security measures of the HKIA are specified in the Hong Kong Aviation Security Programme (HKASP). The specified aviation security measures and requirements meet the relevant recommended standards of the International Civil Aviation Organization (ICAO). According to the HKASP, the identity document as well as the hold and cabin baggage of flight passengers using HKIA shall be checked. Such procedures include that aircraft operators should verify details of the identity document and the air ticket to ensure that they tally; they should conduct aircraft operators' baggage acceptance check at the counter to ensure that the baggage is accepted from the said passenger. The Aviation Security Company is responsible for conducting passenger security checks and x-ray screening of hold and cabin baggage. Moreover, before passenger boarding, aircraft operators should verify again details of the passenger's identity document and the boarding pass. Aircraft operators should also ensure that all passengers tendering baggage are on board.
The Government will continue to closely monitor the aviation security enhancement measures stipulated and announced by the ICAO and other relevant authorities. The Civil Aviation Department will, on a need basis, require the aviation industry, such as the Airport Authority, aircraft operators and others to implement enhancement measures on a timely basis.
Prosecutions Involving Cross-boundary Mainland Vehicles
8. MR GARY FAN (in Chinese): President, currently, certain Mainland vehicles belonging to the Mainland government, departments directly under the Mainland authorities or some enterprise units are only required to obtain International Circulation Permits (ICPs) for running on the roads of Hong Kong, LEGISLATIVE COUNCIL ─ 9 April 2014 9551 and are not required to be registered and licensed in Hong Kong. The local vehicle registration marks of these vehicles are prefixed by "FU" or "FV". It has been reported that when these vehicles are illegally parked in Hong Kong, there is insufficient information on the vehicles for the authorities to institute prosecutions because these cross-boundary Mainland vehicles are not required to display vehicle licences (commonly known as "vehicle licence discs") on the front windscreens. Regarding monitoring the compliance with the traffic legislation of Hong Kong by the aforesaid cross-boundary Mainland vehicles, will the Government inform this Council:
(1) in the past five years, of the number of cross-boundary Mainland vehicles with vehicle registration marks prefixed by "FU" or "FV", the number of fixed penalty notices issued by the authorities to owners or drivers of these vehicles for contravention of the traffic legislation of Hong Kong, as well as the number of fixed penalty notices in respect of which the penalties were still not fully settled after the expiry of the statutory deadlines; and
(2) how the police institute prosecutions against the persons mentioned in part (1) who did not fully settle the penalties by the deadlines, and of the number of cases in the past five years in which prosecutions could not be instituted?
SECRETARY FOR TRANSPORT AND HOUSING (in Chinese): President, all Mainland cross-boundary vehicles are regulated under a quota system jointly administered by the governments of the Hong Kong Special Administrative Region and the Guangdong Province. For non-commercial vehicles of Mainland governments, departments directly under the Mainland authorities or enterprise units with approved quotas for travelling to Hong Kong, quota holders are required to apply for ICPs from the Transport Department (TD) in accordance with the Road Traffic (Registration and Licensing of Vehicles) Regulations (Cap. 374E) (the Regulations) before they drive the relevant vehicles to Hong Kong. The validity of ICPs shall not exceed 12 months.
Upon issuance of ICPs, the TD will at the same time assign vehicle registration marks with prefix "FU" or "FV" to the respective vehicles. Under the Regulations, it is an offence if ICP holders fail to display on the concerned vehicles the assigned vehicle registration marks and the valid ICPs on the 9552 LEGISLATIVE COUNCIL ─ 9 April 2014 left-hand side of the vehicles' windscreen in such a manner that it is clearly visible from the front of the vehicles.
My replies to the questions raised by Mr Gary FAN are as follows:
(1) In the past five years the number of non-commercial vehicles of Mainland governments, departments directly under the Mainland authorities or enterprise units issued with ICPs is as follows:
Year Number of Vehicles 2009 around 1 500 2010 around 1 700 2011 around 1 900 2012 around 2 100 2013 around 2 300
According to the police's prosecution records, the relevant figures relating to the fixed penalty notices issued to the aforementioned vehicles in the past five years are as follows:
Number of fixed Number of overdue Year penalty notices issued fixed penalty notices 2009 25 5 2010 34 5 2011 29 9 2012 60 15 2013 42 14
As at end 2013, except for one case, all of the above overdue penalties have been settled.
(2) If an ICP holder fails to pay the fixed penalty by the statutory deadline, the police will apply for a notice of court order from the Magistrates' Court to order the defaulter to pay the original fixed penalty, additional penalty and costs. At the same time, the TD will consider putting on hold the processing of all licence applications relating to the vehicle concerned until the outstanding penalty is settled.
LEGISLATIVE COUNCIL ─ 9 April 2014 9553
The ICPs and vehicle registration marks of the vehicles concerned have already provided sufficient information for the police to institute prosecution in case such vehicles have contravened the traffic regulations in Hong Kong. In the past five years, there was no case under which the police could not institute prosecution action against those persons mentioned in part (1).
Leisure Link Facility Booking Services
9. DR HELENA WONG (in Chinese): President, to align with booking procedures made online, Leisure Link counter booking has ceased to accept identity documents other than a Hong Kong Identity Card since 1 February this year. Non-Hong Kong residents have to apply, in person with valid travel documents bearing photographs, for Leisure Link Temporary Patron (LLTP) registration at the Leisure Link Telephone Services Centre of the Leisure and Cultural Services Department (LCSD) before they can make bookings for land-based facilities (except on-the-spot bookings). The validity period of an LLTP registration is six months or the applicant's limit of stay, whichever is less. In this connection, will the Government inform this Council:
(1) in respect of each type of Leisure Link facilities under the management of LCSD, of the (i) average hire charge per session, (ii) average cost per session, (iii) average usage rate per week, and (iv) average number of idle hours per week (set out in the table below) at present;
Leisure Link Facilities (i) (ii) (iii) (iv) Activity room American pool table Archery range Billiard table Carom table Cricket practice net Artificial turf pitch Basketball court Badminton court Baseball court Batting cage 9554 LEGISLATIVE COUNCIL ─ 9 April 2014
Leisure Link Facilities (i) (ii) (iii) (iv) Bowling green Climbing wall Dance room Fitness room Golf driving bay Golf practice green Natural turf pitch Netball court Rope course Squash court Table tennis table Tennis court Tennis court (indoor) Tennis practice court Volleyball court Table tennis table and serving machine
(2) of the respective numbers of Hong Kong residents and non-Hong Kong residents registered as Leisure Link patrons (LLPs) at present; the respective numbers of person-times of these two types of users using Leisure Link facilities last year;
(3) whether there is currently any difference between the charges paid by Hong Kong residents and non-Hong Kong residents for using Leisure Link facilities; if there is not, of the reasons for that, and whether the LCSD will set different cost recovery rates for, and accordingly apply different hire charges to, these two types of users; if it will, of the details; if not, the reasons for that;
(4) whether the LCSD will charge non-Hong Kong residents fees for LLTP registration, so as to partially recover the costs; if it will, of the fees; if not, the reasons for that; and
(5) whether the LCSD will introduce measures to accord priority to local residents in booking and using Leisure Link facilities; if it will, of the details; if not, the reasons for that?
LEGISLATIVE COUNCIL ─ 9 April 2014 9555
SECRETARY FOR HOME AFFAIRS (in Chinese): President, since its establishment in 2000, the LCSD has allowed non-Hong Kong residents visiting or working in Hong Kong to hire its leisure facilities for the purpose of promoting "Sport for All". However, the LCSD has found that some members of the public have made two or more online registrations as LLPs by using their travel documents in addition to their Hong Kong identity cards, in order to make bookings in excess of the quota for individual users, thereby affecting other peoples' opportunities to book leisure facilities. To prevent members of the public from using different identities to book leisure venues, with effect from 20 August 2012, only Hong Kong identity cards are accepted for online LLP registration. Visitors or people granted temporary stay in Hong Kong but who do not have Hong Kong identity cards can make online venue bookings after registering at the Leisure Link Telephone Services Centre in person as LLTPs by presenting valid photo-bearing travel documents. This arrangement was extended to include counter bookings by non-Hong Kong residents from 1 February 2014 onwards.
My reply to the various parts of the question is as follows:
(1) The total operating costs and cost recovery rates of the major facilities of the LCSD in 2012-2013 are set out below:
2012-2013 Facilities Total operating cost Cost recovery ($ million) rate 1. Sports centre facilities (including badminton courts, basketball courts, volleyball courts, activity 635.6 32.7% rooms/dance rooms, fitness rooms and table tennis tables) 2. Sports grounds (including natural and artificial turf 384.2 9.7% football pitches) 3. Squash courts 122.4 21.8% 4. Tennis courts 125.6 29.3%
9556 LEGISLATIVE COUNCIL ─ 9 April 2014
Other than the above cost data, the LCSD does not have a breakdown of the data by facility or data on the average cost per session. The hire charges per session, average usage rates and average numbers of idle hours per week of the leisure facilities are set out at the Annex.
(2) At present, about 760 000 local residents are registered LLPs. A total of 95 non-Hong Kong residents have applied for registration as LLTPs since August 2012, and 18 of the registrations are still valid as at 19 February 2014. During the 18 months since the introduction of the new measure in August 2012, a total of 565 sessions at leisure facilities were booked by non-Hong Kong residents, whilst about 8.1 million sessions were booked by Hong Kong residents.
(3) to (4)
The LCSD has the same charging policy for both Hong Kong residents and non-Hong Kong residents using its facilities, which is in line with its policy objective of promoting "Sport for All". Since 20 August 2012, only a small number of non-Hong Kong residents have registered as LLTPs, and only about half of them have made bookings for leisure facilities. In view of the above, the LCSD does not have any plan to develop a separate and different charging arrangement for non-Hong Kong residents or to impose a charge on non-Hong Kong residents applying for LLTP registrations.
(5) The number of sessions of leisure facilities hired by non-Hong Kong residents accounts for a very small percentage of the total number of sessions available for booking. The usage rates of various facilities set out at the Annex also indicate that most of the facilities still have spare capacity for public use. There is no evidence that the existing arrangement of allowing non-Hong Kong residents to hire leisure facilities has affected local residents' opportunities to use these facilities, to the extent that any change is needed to the present arrangement. We will monitor the use of leisure facilities and make special arrangements if necessary as circumstances require.
LEGISLATIVE COUNCIL ─ 9 April 2014 9557
Annex
The Hire Charges Per Session, Average Usage Rates and Average Numbers of Idle Hours Per Week of Leisure Facilities
*Hire charge per #Average ^Average Type of leisure facilities session (normal rate usage rate number of idle for peak hours) per week hours per week Activity room/dance room 65% 28 (with air-conditioning) Less than 100 sq m $38 100 sq m or above $57 Archery Range $300 33% 43 (per 90 minutes and without floodlighting) American Pool Table $30 50% 54 Billiard Table $42 Carom Table $30 Cricket practice net $10 11% 81 (per 30 minutes) Artificial turf pitch 74% 22 (per 90 minutes and without floodlighting) Standard artificial turf $168 football pitch Mini-artificial turf football $84 pitch Natural turf pitch 100% Not Applicable (per 90 minutes and without floodlighting) Standard natural turf $168 football pitch Mini-natural turf football $84 pitch Baseball pitch $168 @ @ (per 90 minutes and without floodlighting) Batting cage $20 30% 78 (without floodlighting) Bowling green $40 36% 55 Basketball court $148 81% 20 (with air-conditioning) Netball court (with air-conditioning) Volleyball court (with air-conditioning) Badminton court $59 (with air-conditioning) 9558 LEGISLATIVE COUNCIL ─ 9 April 2014
*Hire charge per #Average ^Average Type of leisure facilities session (normal rate usage rate number of idle for peak hours) per week hours per week Indoor tennis court $148 69% 27 (with air-conditioning) Climbing wall $47 34% 71 (per wall or per room) Fitness room (per person) $14 71 648 Ω 1.5 β Squash court $27 58% 38 (per 30 minutes) Golf driving bay (outdoor) $12 34% 50 Golf practice green $12 47% 25 Rope course $218 7% 44 (per 90 minutes) Table tennis table $14 56% 42 (with air-conditioning) Table tennis serving $16 machine Tennis court $42 61% 36 (without floodlighting) Tennis practice court $10 55% 42 (per 30 minutes and without floodlighting)
Notes:
* Unless otherwise specified, each session lasts for one hour.
# Except for fitness rooms, the average usage rate per week is calculated by dividing the total number of booked hours per week in 2013 by the total number of hours available for booking per week in 2013.
^ Except for fitness rooms, the average number of idle hours per week is calculated by dividing the total number of unbooked hours in 2013 by 52 weeks, and then by the number of facilities.
@ As the natural turf pitch of Sai Tso Wan Recreation Ground in Kwun Tong can be used for both baseball and football activities, no usage data on baseball activities can be provided.
Ω The quota for a fitness room is set on the basis of the room area and the quantity of fitness equipment provided. To avoid obtaining a usage rate of 100% when there is only one person using the room, the usage of fitness room is indicated by its number of person-times.
β The average number of idle hours for each fitness room for the week from 17 to 23 March 2014.
LEGISLATIVE COUNCIL ─ 9 April 2014 9559
Operation of Cyberport
10. MR CHRISTOPHER CHUNG (in Chinese): President, in 2000, the Government entered, through three private and wholly-owned companies set up under the Financial Secretary Incorporated (FSI), into co-operation with a private developer in developing the Cyberport Project, which comprises a Cyberport Portion and an ancillary Residential Portion. It has been a decade since the Cyberport Portion, managed by the Hong Kong Cyberport Management Company Limited (HKCMCL), was completed and commissioned in 2004. Regarding the operation of Cyberport, will the Government inform this Council:
(1) of the respective numbers of existing Cyberport tenants engaged in (i) the information and communications technology (ICT) industry, and (ii) industries unrelated or indirectly related to that industry, and set out in Table 1 and Table 2 a breakdown by the type and nature of industry respectively;
Table 1 Type of industry Number of tenants Development, manufacture or design of computer hardware Development or design of computer software (other than games) Development or design of communications technology hardware Development or design of mobile applications (other than games) Development and design of game programs (computer or mobile phone) Total:
Table 2 Nature of industry Number of tenants
Total:
9560 LEGISLATIVE COUNCIL ─ 9 April 2014
(2) of the respective vacancy rates of the Cyberport's offices and retail space in its arcade in the past three years;
(3) of the number of internationally renowned multinational ICT companies attracted to the Cyberport, and the state-of-the-art technologies brought in for research and development in the Cyberport, by HKCMCL in the past five years, as well as the details of such technologies;
(4) given that the vision of HKCMCL is to establish the Cyberport as "a leading ICT hub in the Asia-Pacific region", whether the authorities have assessed if this vision has been achieved;
(5) given that some members of the public have pointed out that the Cyberport and the Hong Kong Science Park are both projects developed by the Government with the common objectives of promoting innovation and technological development in Hong Kong, incubating local technology start-ups and nurturing technology talents, and that quite a number of tenants in the Science Park are also engaged in businesses concerning computer software and hardware and communications technology, whether the authorities have assessed if there is currently any overlap in scope of work, if there is a division of work between the Cyberport and the Science Park, and if resources have been wasted due to duplication of work; if there is a division of work, of the details; and
(6) given that, according to a document submitted by the Commerce and Economic Development Bureau to a panel of this Council in March this year, the operating revenue of the FSI (excluding the project income from the residential development) was $407 million in 2012-2013, of the sources of this revenue; given that the authorities have stated in the document that the Cyberport Project is now entering the final stage and the Government is working closely with the project developer to wrap up the Project, of the relevant details; whether the completion of the Project will affect the future operation and development directions of the Cyberport?
LEGISLATIVE COUNCIL ─ 9 April 2014 9561
SECRETARY FOR COMMERCE AND ECONOMIC DEVELOPMENT (in Chinese): President, my reply to the six part question is as follows:
(1) According to the Cyberport's leasing policy, its offices are only leased to the ICT companies or companies that are related to the ICT industry, such as those providing professional services on legal matters or intellectual property. Breakdown of Cyberport office tenants by nature of work as at 28 February 2014 is set out at the Annex.
(2) The vacancy rates of Cyberport offices and arcade as at 31 March of the past three years are set out below:
31 March 31 March 31 March Year 2012 2013 2014 Offices' vacancy rate 14% 14% 9% Arcade's vacancy rate 8% 5% 3%
(3) Over the years, the Cyberport has attracted a number of well-established ICT companies from around the world, including Microsoft, IBM, Cisco Systems, and so on. At the same time, some well-established local ICT companies, including Pacific Century Cyber Works, Communication Services Limited, CITIC 21CN, and so on, have also set up at the Cyberport. In the past five years, 52 multinational ICT companies have established business at the Cyberport. These companies have introduced many state-of-the-art technologies to Hong Kong, including new smartphone operating systems and real-time 3D weather graphics system, taking Hong Kong's ICT development to the next level.
(4) The Cyberport's vision is to establish itself as a leading ICT hub in the Asia-Pacific region through the creation of a cluster of ICT companies and professionals. To achieve this vision, the Cyberport endeavours to nurture ICT talents, create business opportunities for the industry and drive widespread ICT adoption. Over the years, the Cyberport has been working towards fulfilling these objectives and its efforts are coming to fruition. Its achievements are generally recognized by the industry.
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Throughout the years, the Cyberport has attracted many local and overseas ICT companies to establish their business there. As at 28 February 2014, 35% of the Cyberport's tenants are non-local, and some of them are large-scale multinational ICT companies. Moreover, the Cyberport actively nurtures ICT talents through its incubation programme, which provides various kinds of support to help startups develop products and strengthen business operations, thereby enhancing their competitiveness in the commercial market. As at the end of February 2014, a total of 219 startups have joined the Cyberport's incubation programme, many of which have become successful business undertakings and won investors' recognition. The investment funding they have attracted exceeds $100 million in total. Furthermore, they have won a total of 133 awards in various renowned local and international competitions. Many of them have also succeeded in gaining foothold in overseas markets.
In addition, the Cyberport is proactive in leveraging on state-of-the-art technologies and cutting-edge technological tools to help the industry grasp market opportunities and provide an environment conducive to the development of the local technology industry. For example, Cyberport launched the Cyberport Community Cloud in 2013 to offer convenient, user-friendly and self-provisioning cloud services for its tenants and subscribers, so as to facilitate them to deploy scalable resources having regard to their actual demands, with a view to enhancing cost-effectiveness as well as expediting the research and development of applications and new products. In 2013, the Cyberport also expanded the Digital Cinema Exchange (DCX) network and service (for example, 2D-3D real-time conversion) to bring the latest technology of digital cinema to the local film industry, generating opportunities for cinema operators and enhancing the viewing experience of audiences. As at the end of February 2014, 136 digital screens, representing 70% of 193 digital screens in Hong Kong, have been connected to the DCX network with over 80 live events delivered. On driving ICT adoption, Cyberport has organized many major events with a view to facilitating exchanges with talents from around the world, promoting LEGISLATIVE COUNCIL ─ 9 April 2014 9563
Hong Kong as a knowledge-based digital economy, and stimulating youngsters' interest in the ICT industry.
These achievements show that the Cyberport is actively fulfilling its function as ICT flagship of Hong Kong, and has made significant contributions towards promoting the development of the local technology industry. The Cyberport has dedicated $100 million in the past three years to its public mission programmes. In the next three years, the Cyberport will enhance its public mission work and double the expenditure on public mission activities to $200 million.
(5) While the positioning and objectives of the Cyberport and the Science Park are clear and well-defined, they also co-operate with each other closely. The Cyberport focuses on creating a cluster of ICT companies in Hong Kong, particularly those engaging in technology application including mobile applications, digital entertainment and cloud computing applications, and so on. On the other hand, the Science Park mainly attracts technology-intensive companies for conducting research and development so as to promote the development and adoption of technology in the local industrial sector. The Science Park's tenants cover various technological areas, including biotechnology, precision engineering, green technology, electronics, information technology and telecommunications, and so on. The Cyberport and the Science Park maintain close communication and liaison with a view to achieving synergy and complementing each other's strengths in various areas, thus generating more development opportunities for the industry.
(6) In 2012-2013, the operating revenue (excluding the project income from the residential development) of the Cyberport Companies was $407 million, chiefly from rentals and management fees of the offices and arcade, profits from hotel operation, and income from providing IT facilities and services, and so on.
In 2000, the Government entered into the Cyberport Project Agreement with the developer. Under the Project Agreement, the 9564 LEGISLATIVE COUNCIL ─ 9 April 2014
developer was responsible for the design, development, construction and marketing of the Cyberport Project. The Project comprises the Cyberport Portion (that is, four office buildings, one hotel and one arcade) and the Residential Portion. The Cyberport Portion was completed and returned to the Government in 2004, while the Residential Portion was completed in 2008. All residential units were sold in 2013. As the developer had largely fulfilled all obligations under the Project Agreement, the Government has initiated discussion with the developer on project completion pursuant to the Project Agreement. Since the developer has no involvement in the operation of the Cyberport Portion, completion of the Project will not affect the Cyberport's operation and development.
Annex
Breakdown of Cyberport Office Tenants by Nature of Work (As at 28 February 2014)
Nature of Work Number of tenants Tenants in the ICT industry Development, manufacture or design of computer 4 hardware Development or design of computer software (other than 55 games) Development or design of communications technology 6 hardware Development or design of mobile applications (other than 17 games) Development and design of game programs (computer or 1 mobile phone) Digital entertainment and multimedia services 24 E-commerce 27 IT service department in large-scale enterprises or 10 organizations, and companies or organizations that adopt IT heavily in their business operations On-site incubatees under Cyberport Incubation Programme 29 LEGISLATIVE COUNCIL ─ 9 April 2014 9565
Nature of Work Number of tenants Tenants whose business is related to the ICT industry Companies or organizations that provide support 19 (for example, professional services, consultant services, financial and investment services, and so on) for the ICT industry Organizations engaged in knowledge-based businesses 2 Total: 194
Compensation for Factory Operators of Former Wah Kai Industrial Centre
11. MR ALBERT CHAN (in Chinese): President, in 1999, the Government resumed the land of Wah Kai Industrial Centre under the relevant provisions of the Railways Ordinance (Cap. 519). I have learnt that a number of former factory operators of the industrial building have not yet reached any compensation agreement with the Government. In this connection, will the Government inform this Council:
(1) of (i) the number of claims made by the aforesaid factory operators, as well as the numbers of cases for which compensation (ii) has been paid and (iii) has not been paid by the authorities, and set out a breakdown by type of compensation in Table 1;
Table 1 Type of compensation (i) (ii) (iii) Property compensation Removal allowance Extinguishment allowance
(2) in respect of the number of cases for which compensation has been paid, of a breakdown by type of compensation (that is, (i) property compensation, (ii) removal allowance and (iii) extinguishment allowance) as well as the grouping to which the amount of compensation belongs (set out such information in Table 2); and
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Table 2 Amount of compensation (i) (ii) (iii) (ten-thousand dollars) Less than 50 50 to 99 100 to 199 200 to 299 300 or above
(3) given that some factory operators have alleged that they co-owned the public toilets in Wah Kai Industrial Centre, whether the authorities will compensate the owners concerned for the resumption of such ownerships; if so, of the details; if not, the reasons for that?
SECRETARY FOR DEVELOPMENT (in Chinese): President, I reply to the various parts of the question as follows:
(1) The Government resumed Wah Kai Industrial Centre in 1999 under the provisions of the Railways Ordinance (Cap. 519). As at 25 March 2014, the Lands Department (LandsD) has processed 954 compensation cases, of which 577 are land interest compensation cases, and 377 are business loss compensation cases. Agreement has been reached and the full amount of compensation collected for 838 cases, which includes 513 land interest cases and 325 business loss cases. Notwithstanding this, 112 out of the 116 cases which have yet to reach an agreement as to the amount of compensation have had the provisional payment collected, while the claimants of the four remaining cases have not yet responded to the compensation offer.
(2) With regard to compensation in relation to Wah Kai Industrial Centre, an amount of about $767,530,000 for compensation and related payment has been paid as at 25 March 2014.
As regards the breakdown and grouping of cases by type and amount of compensation requested by the question, the Government does not compile the statistics of the vast number of cases in terms of the level of compensation. Also, a considerable portion of the affected parties collect their eligible compensation in installments rather than LEGISLATIVE COUNCIL ─ 9 April 2014 9567
in one go, while some cases would also involve provisional payment. As such, the Government is unable to categorize all compensation cases according to the forms prescribed in the question.
Moreover, compensation claims for business loss cases are generally assessed on the basis of relocation of business and extinguishment of business. For the cases whereby agreement has been reached, a large portion of claimants have already accepted the Government's compensation offer, calculated based on established mechanism and with ex gratia allowance elements included, before they submitted or established their basis of claim.
As for business loss cases with agreement not yet reached, the Government is still pending claimants' submission of claims and the relevant information and justifications supporting their claims.
For the above reasons, the Government is unable to distinguish the basis of compensation for the abovementioned cases and categorize these compensation cases according to the form prescribed in the question.
(3) According to the Deed of Mutual Covenant of Wah Kai Industrial Centre, public toilet facilities form part of the common area and are not assigned undivided shares. As a result, the Government cannot offer stand-alone compensation to the abovementioned areas. Notwithstanding this, the common use value of the common area has been reflected in the land interest compensation of all units.
Building a Mega Business and Shopping Centre near Boundary
12. MR CHAN HAK-KAN (in Chinese): President, it is learnt that over 30 million Mainland visitors entered Hong Kong by land transport in 2013. There are comments that although such visitors can help boost the economic development of Hong Kong, they have also caused some problems, such as shop rentals soaring continuously which have led to the closure of some small and unique shops, overcrowding of vehicle/train compartments of public transport and the streets, rising commodity prices, as well as shortage of certain daily necessities. On the other hand, residents in the New Territories North have to travel to other districts to work due to insufficient job opportunities in their 9568 LEGISLATIVE COUNCIL ─ 9 April 2014 district. Thus, building a mega business and shopping centre in an area close to the boundary can not only divert the excessive number of visitors from the urban areas, but also create job opportunities for residents in areas near the boundary in the New Territories North. In this connection, will the Government inform this Council:
(1) whether the upcoming "Preliminary Feasibility Study on Developing the New Territories North" (the Study) will include studying the feasibility of building the aforesaid business and shopping centre; if so, of the details; if not, whether it will include this subject in the Study;
(2) whether it will consider identifying a suitable site in an area close to the boundary for building the aforesaid business and shopping centre, and applying to the Town Planning Board for zoning the site for "Other Specified Uses" annotated "Business" to facilitate private enterprises to develop such facilities on that site; and
(3) whether it has plans, in collaboration with the MTR Corporation Limited, to explore the feasibility of constructing a new station along the Lok Ma Chau Spur Line and building the aforesaid business and shopping centre above that station?
SECRETARY FOR COMMERCE AND ECONOMIC DEVELOPMENT (in Chinese): President, tourism is an important pillar industry of Hong Kong's economy. Continued expansion in visitor arrivals certainly brings challenges to Hong Kong, while it also promotes economic growth and stimulates employment. In 2013, visitors contributed consumption of more than $340 billion, and stimulated the growth of many tourism-related industries, including the retail, catering and transportation trades which also provided many job opportunities with relatively low skill requirement.
The Government realizes that continued expansion of visitor arrivals in recent years and excessive concentration of visitors will bring pressure and challenges to the society and general public. Therefore, the Government will strive to balance the impact of tourism on the local economy and residents' livelihood, and will work to enhance Hong Kong's tourist receiving capacity in various aspects. The measures include strengthening the promotion of different districts' characteristics to provide more choices to visitors on one hand and to LEGISLATIVE COUNCIL ─ 9 April 2014 9569 alleviate congestion in traditional popular tourist areas on the other; as well as encouraging visitors to visit and consume in tourist attractions of different districts, with a view to expanding the overall economic benefits of the tourism industry.
The New Territories North is strategically located near the Mainland in close proximity to a number of land boundary crossings. From the tourism perspective, developing business and shopping centre(s) in these areas could redirect visitors to these areas which help alleviate pressure in the traditional popular tourist areas. It could also create more job opportunities for residents of the New Territories.
Having consulted the Development Bureau and the Transport and Housing Bureau, my reply to Mr CHAN's question is as follows:
(1) and (2)
The Planning Department and the Civil Engineering and Development Department jointly commissioned a consultant in January 2014 to conduct the Study. The Study will examine the feasibility of economic development and job creation near the three boundary control points at Lok Ma Chau, Man Kam To and Liantang/Heung Yuen Wai in the New Territories North and identify potential areas for such development; formulate broad land uses and development scale of these areas; and ascertain their preliminary technical feasibility and major supporting infrastructures required. Public engagement activities will be carried out during the course of the Study, and the Study will take into account the proposal for developing business and shopping centre(s) should there be any. The Development Bureau anticipates that the Study will complete in around mid 2015.
At present, should any person or organization have a concrete proposal for developing a business and shopping centre at suitable location in the New Territories North, he/she can make an application for or proceed with such development in accordance with the prevailing planning and land administration procedures. The Tourism Commission will be glad to co-ordinate with the government departments concerned to provide the relevant information and assistance to the project proponent if necessary.
9570 LEGISLATIVE COUNCIL ─ 9 April 2014
(3) The Government has earlier commissioned a consultant to conduct a study for the Review and Update of the Railway Development Strategy 2000, with a view to updating the long-term railway development blueprint for Hong Kong to cater for the latest development needs of the society. Two stages of public engagement exercise have been conducted to explore the conceptual proposals of 10 railway schemes (including adding a Kwu Tung Station on the Lok Ma Chau Spur Line). The Transport and Housing Bureau is finalizing the blueprint for railway development beyond 2020 having regard to three major aspects, namely transport demand, cost-effectiveness and development needs of the New Development Areas, and will announce the way forward for the new railway proposals later in 2014. When individual projects proceed to the detailed planning stage, the Government will further study the technical details (including the co-ordination with the proposed facilities in the New Development Areas) and consult the public on the projects.
Fees and Charges of MPF Schemes
13. MR TANG KA-PIU (in Chinese): President, regarding the fees and charges of the Mandatory Provident Fund (MPF) schemes, will the Government inform this Council:
(1) whether it knows the (i) amounts of contributions (with a breakdown according to mandatory and voluntary contributions made by employers and employees), (ii) accrued benefits withdrawn (with a breakdown according to mandatory and voluntary contributions made by employers and employees), (iii) net accrued benefits (with a breakdown according to mandatory and voluntary contributions made by employers and employees), (iv) fund expense ratios (FERs) and (v) fund expenses, in each year since the implementation of the MPF Scheme;
(2) given that, as revealed by the Report on a study of administrative costs in the Hong Kong MPF system (Cost Study) published in 2012, the three major components of MPF fund expense are investment management fees, administration costs and other costs (including trustee profits, sponsor fees, member rebates and other expenses), LEGISLATIVE COUNCIL ─ 9 April 2014 9571
whether it knows the current monthly expenses of those three components and their respective percentages in the fund expenses concerned in respect of the 41 MPF schemes under the 19 approved trustees; the details of the follow-up actions taken by the authorities on the reform recommendations made in the Report, and the initiatives to be taken next year to lower the fees and charges of the MPF schemes;
(3) whether it knows the total amount of commissions collected by registered MPF intermediaries last year and its percentage in the MPF administration costs;
(4) of the measures in place to prevent approved trustees from regarding expenses irrelevant to their MPF business as administration costs of MPF schemes; whether there is a mechanism to monitor if approved trustees have misappropriated MPF contributions or administration charges collected for developing other businesses; if there is, of the details of the monitoring mechanism and penalties; if not, the reasons for that;
(5) whether it knows the current asset values and FERs of the MPF funds managed respectively by the 19 approved trustees; whether it has monitored if approved trustees handle the MPF administration work by themselves or have entrusted the work to subsidiary companies or outsourced it to other companies; if so, of the details and set out the names of the subsidiary companies or outsourced companies concerned;
(6) whether it knows, since the implementation of the "MPF Employee Choice Arrangement (ECA)", the extent of decrease in MPF fund expenses, and the number of cases in which employees transferred the accrued benefits derived from their own contributions in their accounts to other MPF trustees and schemes selected by them; the number, age and salary range of these employees;
(7) whether it knows the current number of MPF contributors who leave investment decisions to the sole discretion of their approved trustees, their monthly contributions and the total asset values of the MPF funds concerned; and
9572 LEGISLATIVE COUNCIL ─ 9 April 2014
(8) as the Financial Secretary mentioned in the 2013-2014 Budget that the Mandatory Provident Fund Schemes Authority (MPFA) was preparing proposals regarding the implementation of a cap on MPF fees that would be introduced in case of market failure, whether it has assessed if the current level of MPF fees reflects market failure; if the assessment outcome is in the affirmative, when the authorities intend to introduce the cap on MPF fees?
SECRETARY FOR FINANCIAL SERVICES AND THE TREASURY (in Chinese): President,
(1) According to the statistics provided by the MPFA, the relevant information on the contributions received, benefits paid and accrued benefits are set out at Annex 1 and the information on fund expenses are set out at Annex 2.
(2) The Cost Study published in 2012 shows the result of the independent consultant's analysis of the then average FER of 1.74% that investment management accounts for 0.59%, administration cost 0.75%, and scheme sponsor charge, trustee profit, member rebates and other expenses as a whole 0.4%. The consultant worked out the breakdown of the FER by analysing the aggregate data collected from MPF trustees around the time of the Cost Study. Data about individual trustees' cost structures are not available to the MPFA.
Based on the findings of the Cost Study, the MPFA has been following up on a number of short-, medium- and long-term measures with a view to reducing the fees of MPF schemes. The progress of these measures is encouraging. Details are as follows:
(i) Offering Low-fee Funds: the MPFA has been urging MPF trustees to make available different types of low-fee funds in each MPF scheme for members to choose from. At present, 40 schemes have at least one low-fee fund (that is, fund with management fees ≦ 1.0% o equities and/or bonds available to scheme members, while the remaining one scheme is preparing to launch this kind of low-fee fund later this year. As at the end of March 2014, the number of low-fee funds available in the market was 155, accounting for about one third of all MPF funds. The MPFA LEGISLATIVE COUNCIL ─ 9 April 2014 9573
has included a "Low Fee Fund List", a "Fee Comparative Platform" (including information on FER and investment returns) and a "Trustee Service Comparative Platform" on its website to facilitate scheme members in fund selection, and to increase market force.
(ii) Consolidating MPF Schemes/Funds: In response to the appeal of the MPFA, MPF trustees have been exploring the feasibility of consolidating their MPF schemes/funds. Since November 2012, four funds which were smaller in scale have been terminated and two smaller schemes have been merged with more sizable schemes by the trustees concerned.
(iii) Consolidating Personal Accounts: In the third and fourth quarters of 2013, the MPFA conducted a campaign to encourage scheme members to consolidate their MPF personal accounts. To better facilitate the consolidation of accounts, the MPFA introduced a simple application form in September 2013, allowing scheme members to consolidate multiple personal accounts under different schemes in one go. From 16 September 2013 to 15 March 2014, MPF trustees received 33 400 applications from scheme members for consolidation of personal accounts.
(iv) Promoting Automation and Streamlining of Administration Processes: The MPFA expects to launch an MPF Payment Settlement System in mid-2014 which enables MPF trustees to transfer scheme members' accrued benefits between each other electronically to reduce the time required for transfer of accrued benefits. In addition, we plan to introduce an Amendment Bill into the Legislative Council in July this year. The Amendment Bill will propose, among other things, simplifying certain statutory procedures and requirements with which MPF trustees have to comply, with a view to further reducing their operational and compliance costs, thus increasing their scope of fee reduction.
At the same time, we are following up with the MPFA on some fundamental reforms with a view to achieving more substantial reduction in MPF fees. The details are set out in part (8) of this reply.
9574 LEGISLATIVE COUNCIL ─ 9 April 2014
(3) Commissions to intermediaries are not charged to MPF funds, but are generally payable by scheme sponsors or promoters. The MPFA does not have the relevant figures.
(4) All MPF trustees are subject to stringent requirements set out in the Mandatory Provident Fund Schemes Ordinance (MPFSO). It is a statutory requirement that all MPF schemes keep accurate accounting records and submit the audited financial report to the MPFA. Any approved trustee who does not keep proper accounting records, shall be guilty of an offense and shall be liable on conviction to a fine. MPF assets are subject to trust arrangement, and must be separated from the assets of trustees. Any deduction from MPF funds must be made in compliance with the requirements stipulated in the MPFSO. The MPFA has set up a professional team to supervise the compliance of trustees.
(5) As at 28 February 2014, the total amount of assets under management of MPF schemes was about $517.4 billion. Data on the overall FER are set out at Annex 2. The FER and net asset value of individual MPF funds can be found at the "Fee Comparative Platform" on the website of the MPFA
Out of the 15 approved trustees operating MPF schemes, six perform scheme administration themselves, six appoint their group companies as scheme administrators, and the remaining three appoint a third party to perform the duty. Whether scheme administration is done by the trustee concerned or a third party, any fee charged to an MPF fund for the service is included in the FER. The other four approved trustees do not operate any MPF scheme.
(6) From the launch of ECA in November 2012 up to 28 February 2014, about 120 000 ECA transfer requests have been received by MPF trustees. Since the information submitted by trustees to the MPFA under the MPFSO does not include data on individual scheme members, we do not have the requested details.
On MPF fees, from the launch of the ECA up to January 2014, the management fees of 171 funds (or 35% of MPF funds) have been reduced, with the largest reduction of 118 basis points (that is, LEGISLATIVE COUNCIL ─ 9 April 2014 9575
1.18%). The FER also fell from 1.74% at the preceding month of the launch of the ECA (that is, October 2012) to 1.69% in March 2014. Given the FER is calculated ex post on the basis of financial statements of last financial year, the FER has not fully reflected the effect of reduction in management fees.
(7) The current MPF system is designed such that if a scheme member does not make an investment choice, the MPF trustee concerned will invest the relevant contributions in the default fund of an individual scheme. Since the information submitted by trustees to the MPFA under the MPFSO does not include data on individual scheme members, we do not have the requested details. A recent MPFA survey suggests that around 24% of scheme members have not made an investment choice.
(8) Over the past few years, the MPFA has launched various measures to drive down MPF fees, promote market competition and enhance the transparency of MPF schemes. Such measures, including introducing the FER and Low Fee Fund List, implementing the ECA and encouraging personal account consolidation, have achieved good results. The FER dropped from 2.1% in 2007 to 1.69% in March 2014, representing a reduction of some 20%.
Together with the MPFA, we are following up on some fundamental reform measures with a view to causing more substantial reduction in MPF fees. They include:
(i) Enhancing the default arrangements under the MPF system: the current thinking is that each MPF scheme will have to make available a default/core fund that complies with specified requirements. Investment of the fund will be regulated, such as a mandatory requirement to make long-term diversified investment in order to balance investment risk and return; and the fund will be subject to fee control. We expect the fund to be a low-fee option with investment consistent with the concept of retirement protection, for scheme members who have not made a choice of fund. In addition, the fund can be a benchmark for the market, thereby increasing competition. We and the MPFA plan to consult the public on the relevant proposal later this year.
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(ii) Full Portability: the MPFA is studying various options to implement Full Portability of MPF benefits to further increase scheme members' autonomy in choosing MPF funds and promoting market competition. The MPFA aims to submit a proposal to the Government by the end of 2015.
Annex 1
Statistics on contributions received, benefits paid and accrued benefits under the MPF Schemes(1)
($ million) Contributions received(2) Benefits paid(2) Net Asset Financial Special Special Value Year Mandatory Voluntary Total(3) Mandatory Voluntary Total(3) Voluntary Voluntary (31 March) 2000-2001 ------15,694 2001-2002 ------42,125 2002-2003 ------59,305 2003-2004 21,648 2,116 - 23,764 1,452 1,237 - 2,690 97,041 2004-2005 22,554 2,368 - 24,922 1,839 1,489 - 3,329 124,316 2005-2006 24,219 2,702 - 26,922 2,587 1,754 - 4,341 164,613 2006-2007 25,919 3,141 - 29,060 3,484 2,004 - 5,488 211,199 2007-2008 28,088 3,714 612 32,414 4,263 2,122 193 6,579 248,247 2008-2009(4) 38,566 4,346 506 43,418 4,184 1,598 170 5,952 217,741 2009-2010(4) 30,932 4,430 650 36,011 5,395 1,819 304 7,518 317,310 2010-2011(4) 32,581 5,201 867 38,648 5,509 2,243 610 8,362 378,280 2011-2012 35,257 6,193 1,505 42,955 5,932 2,245 1,176 9,353 390,744 2012-2013 40,098 6,731 2,763 49,592 7,215 2,808 2,499 12,522 455,331
Notes:
(1) The information submitted by trustees to the MPFA pursuant to the MPFSO does not include the breakdown of contributions received, benefits paid and accrued benefits respectively in respect of employers' contributions and employees' contributions.
(2) Since April 2003, trustees have provided to the MPFA standardized information on the amount of contributions received and benefits paid, and later on information on the amount of special voluntary contributions.
(3) Figures may not add up to the total due to rounding.
(4) Figures include a net special contribution of $8.41 billion paid by the Government to eligible MPF Schemes/Occupational Retirement Schemes Ordinance scheme members in the period of March 2009 to December 2010.
LEGISLATIVE COUNCIL ─ 9 April 2014 9577
Annex 2
Information on fund expenses of MPF Schemes
The MPFA has introduced the FER since 2007, requiring each trustee to calculate FER based on a standardized formula and submit the ratio to it. FER already reflects the expenses incurred in MPF funds and all underlying funds. The information submitted by trustees to the MPFA does not include the amount of expenses incurred in the aforementioned funds and underlying funds. FER for 2007 to 2014 are set out below:
Year(1) Average FER 2007 2.10% 2008 2.01% 2009 1.94% 2010 1.84% 2011 1.77% 2012(2) 1.75% 2013 1.70% 2014 1.69%
Notes:
(1) The average FER for 2007 to 2013 covers the average of FER of all MPF constituent funds with financial year-end dates falling within the period from 1 April of the preceding year to 31 March of the relevant year. FER for 2014 covers the average of FER of all MPF constituent funds with financial year-end dates falling within the period from 1 July 2012 to 30 June 2013.
(2) The ECA was launched in November 2012.
Area of and Facilities on Vacant School Premises
14. DR KENNETH CHAN (in Chinese): President, the principal of a subsidized primary school on Hong Kong Island has earlier relayed to me that the premises of the school are far below the current standards in terms of its area, space and facilities (commonly known as "matchbox-style school premises"). Given that the school premises, which were built in the 1970s, have very limited space and are frequently in need of repair and maintenance, the school has no means to improve the learning environment of students. The 9578 LEGISLATIVE COUNCIL ─ 9 April 2014 principal has also indicated that the premises of an adjacent school, which have the same design as the premises of his school, have been left vacant. He has hoped that the authorities could allocate the vacant premises to his school, so as to alleviate the crowded conditions suffered by students, but some of the facilities on the vacant school premises have already been demolished and removed. Regarding the increase in the area of school premises and arrangements for the facilities on vacant school premises, will the Government inform this Council:
(1) of the current number, locations, commissioning dates and usage of "matchbox-style school premises" of public-sector schools;
(2) whether it has drawn up a timetable to phase out all the existing "matchbox-style school premises"; if it has, of the timetable and details; if not, whether it will consider drawing up such a timetable and work plan; if it will, of the details; if not, the reasons for that;
(3) given that at present, the school premises of some public-sector schools, due to space constraints, can hardly meet the current standards even if improvement works are carried out, whether the authorities will consider according priority to these schools in allocating the vacant school premises adjacent to such schools, so as to increase the space on their premises; if they will, of the specific arrangements; if not, the reasons for that; and
(4) of the criteria adopted by the authorities for deciding whether the facilities on vacant school premises should be demolished or materials therein be removed; whether the authorities will consider retaining the basic facilities on these vacant school premises as far as possible, so that once the new use of such school premises is confirmed, the time for reinstalling the facilities can be shortened; if they will, of the details; if not, the reasons for that?
SECRETARY FOR EDUCATION (in Chinese): President, my reply to Dr CHAN's question on the so-called "matchbox-style school premises" and allocation of vacant school premises is as follows:
(1) The Education Bureau does not have any definition nor set of standards for the so-called "matchbox-style school premises". We LEGISLATIVE COUNCIL ─ 9 April 2014 9579
presume that the premises in question refer to those cuboidal shaped school premises constructed between mid-1960s and 1980 at public housing estates for primary school use. At present, 28 public sector primary schools are operating in such premises. Their distribution by region is listed below:
Date of Region Number Current use commissioning Hong Public sector primary Kong 1 school use; some of the Region school premises now Kowloon have larger operating 9 Between mid-1960s Region area after acquiring an and 1980 annex through the School New Improvement Programme Territories 18 (SIP) and are no longer Region of cuboidal shape.
(2) and (3)
School premises built in different periods follow the standards at the time of construction while existing school premises in operation are required to comply with prevailing statutory requirements. The Education Bureau strives to upgrade the facilities of school premises according to their needs, so as to improve the learning environment. Subject to the consideration of various factors (including optimal use of public resources and technical feasibility), schools built according to past planning standards would be upgraded and provided with appropriate facilities through the following means so as to meet the changing needs in teaching and learning:
(i) SIP: Starting from 1994, the Education Bureau has provided 743 public sector schools built according to past planning standards with additional space and facilities through the SIP. Almost all of the abovementioned 28 schools were provided with additional classrooms, special rooms and/or administrative facilities through SIP.
9580 LEGISLATIVE COUNCIL ─ 9 April 2014
(ii) Minor Improvement Works: Apart from the SIP, the Education Bureau has also improved the facilities of schools in need through minor improvement works, including addition or conversion of classrooms and special rooms.
(iii) Redevelopment and Reprovisioning Programme: We will, premised on optimizing the use of land resources and existing school premises and satisfying the relevant policy objectives, reprovision those public sector schools in need to new premises meeting the prevailing standards, or improve the school facilities through in situ redevelopment. In prioritizing redevelopment and reprovisioning programme, parameters considered include the quality of education delivered and the physical condition of the school's existing premises, and whether it has benefited from the SIP, but not limited to the shape and age of the school premises.
As regards vacant school premises, the Education Bureau has an established mechanism for handling vacant school premises. Once a vacant school premises is identified, we will consider if the size, location and physical conditions of the premises would render it suitable for re-allocation for school or other educational uses. According to the established mechanism, once a school premises is identified to be suitable for reprovisioning/extension of existing primary/secondary schools, the Education Bureau will invite eligible school sponsoring bodies (SSBs) in the territory to apply for the relevant school sites/premises through the School Allocation Exercises. Applicants are required to submit application forms and other documents as needed.
Allocation of school premises is generally conducted on a competitive basis amongst the SSBs. In assessing the applications for reprovisioning of schools, quality of education is the prime consideration of the School Allocation Committee (the Committee). Other factors to be considered include the operation track record of the SSB, the school plan after relocation and the physical condition of the school's existing premises, and so on. In general, we consider that schools with a site area of less than 3 000 sq m and LEGISLATIVE COUNCIL ─ 9 April 2014 9581
premises over 30 years of age without having benefited or having only marginally benefited from the SIP warrant serious consideration. Yet, these are not the pre-requisites for submission of applications since each case will be assessed on its own merits. In addition, the location of the applicant school (that is, whether the existing school premises is located in the same district as that of the school premises to be allocated) will also be one of the factors for consideration. When assessing the applications, the Committee will give due consideration to each case before working out the recommendations for school allocation. If necessary, the Committee will arrange interviews with the SSBs.
(4) Under normal circumstances, when a school ceases operation or is reprovisioned to another premises to continue its operation, the relevant SSB is required to return the existing school premises and the school site concerned (if applicable) upon relocation to the new premises, while the furniture and equipment in the premises would be disposed of in accordance with the terms set out in the tenancy agreement or land lease entered into with the relevant government department (for example, the Education Bureau, Housing Department or Lands Department). In general, the SSB is required to, before vacating the premises, remove all furniture and equipment and have the premises properly cleaned up. For reprovisioning cases, existing furniture and equipment with a reusable value should be kept for use in the new premises in order to make the best use of available resources. If the school premises is reserved for further school use, the existing fixtures and facilities in the premises will be retained with a view to facilitating the deployment of the premises as soon as possible.
Constitutional Development
15. DR LAM TAI-FAI (in Chinese): President, on 4 December last year, the Government published the Consultation Document on the Methods for Selecting the Chief Executive in 2017 and for Forming the Legislative Council in 2016 and launched a five-month public consultation on constitutional development, which 9582 LEGISLATIVE COUNCIL ─ 9 April 2014 will end on 3 May this year. In this connection, members of the Task Force on Constitutional Development earlier hosted four dinners to meet in groups with Members of this Council from different political affiliations, and held four breakfast meetings to enable Members of this Council to exchange views on constitutional development in groups with officials from the Liaison Office of the Central People's Government (CPGLO) in the Hong Kong Special Administrative Region (HKSAR). Moreover, the Central People's Government (CPG) has made arrangements for Members of this Council to visit Shanghai on the 12th and 13th of this month and during the visit, Mainland officials such as the Director of the Hong Kong and Macao Affairs Office of the State Council as well as the Chairman of the HKSAR Basic Law Committee under the Standing Committee of the National People's Congress (NPCSC) will meet with Members of this Council in Shanghai and discuss the constitutional development of Hong Kong. In this regard, will the Government inform this Council:
(1) of the number of submissions received so far and, among them, the respective numbers of submissions from individuals and organizations;
(2) given that paragraph 1.14 of the aforesaid Consultation Document points out that amendments to the methods for selecting the Chief Executive and for forming the Legislative Council have to go through the "Five-step Process", of the timetable for each step of the five-step process; the expected time for launching the second round public consultation, as well as the time for putting forward concrete proposals on constitutional development;
(3) of the list of attendees of each of the aforesaid dinners and breakfast meetings (set out in tables), and whether it has assessed the effectiveness of such activities in reducing the differences and building consensus among Members of this Council in respect of constitutional development; whether it will hold similar exchange activities again before the end of the consultation;
(4) whether it knows the detailed arrangements for Members of this Council to meet in groups with the Mainland officials for exchanging views on constitutional development during the visit to Shanghai;
LEGISLATIVE COUNCIL ─ 9 April 2014 9583
(5) given that Article 45(1) of the Basic Law stipulates that "the Chief Executive of the Hong Kong Special Administrative Region shall be selected by election or through consultations held locally and be appointed by the Central People's Government", whether the Government has studied the definition for "selected through consultations", among whom the consultations should be conducted, as well as the circumstances under which the Chief Executive should be selected through consultations;
(6) given that Article 45(2) of the Basic Law stipulates that "[t]he method for selecting the Chief Executive shall be specified in the light of the actual situation in the Hong Kong Special Administrative Region and in accordance with the principle of gradual and orderly progress. The ultimate aim is the selection of the Chief Executive by universal suffrage upon nomination by a broadly representative nominating committee in accordance with democratic procedures", of the definitions adopted by the Government for the following terms: (i) "actual situation", (ii) "gradual and orderly progress", (iii) "broadly representative", and (iv) "democratic procedures";
(7) whether it will seek legal advice on the constitutionality of the "civil nomination" and the "three-track nomination" (that is, candidature in the 2017 Chief Executive election can be obtained through any one of the three routes, namely civil nomination, nomination by political parties and nomination by a nominating committee) proposed by the pan-democrats, and give the public an account of the views obtained; if it will, of the time to give such an account; if not, the reasons for that;
(8) if it has sought legal advice on whether the "Occupy Central" movement is illegal, and whether it will give an account of this to the public; if it will, when it will give such an account; if not, the reasons for that; and
(9) as it has been reported that the NPCSC's Chairman indicated earlier that the Chief Executive selected by way of universal suffrage should 9584 LEGISLATIVE COUNCIL ─ 9 April 2014
be a person who "loves the country and Hong Kong", whether the Government has studied how to define "a person who loves the country and Hong Kong"; whether it has studied if a person who promotes, participates in or supports the "Occupy Central" movement as well as one who does not uphold the Basic Law should be regarded as a person who loves the country and Hong Kong; if it has studied, of the justifications for the relevant conclusions?
SECRETARY FOR CONSTITUTIONAL AND MAINLAND AFFAIRS (in Chinese): President, according to the Decision made by the Standing Committee of the NPCSC in 2007, the election of the fifth Chief Executive in the year 2017 may be implemented by the method of universal suffrage. It is the common aspiration of the Central Authorities, the HKSAR Government, and the public at large to attain universal suffrage for the Chief Executive election in 2017, strictly in accordance with the Basic Law and the relevant Interpretation and Decisions of the NPCSC. It is also an important policy objective of the current term HKSAR Government. On 4 December 2013, the HKSAR Government formally launched the public consultation on the implementation of universal suffrage for the Chief Executive Election in 2017 and the method for forming the Legislative Council in 2016 to prepare for the "Five-step Process" of constitutional development. The five-month consultation will end on 3 May 2014. We hope that different sectors of the community will conduct thorough discussions on the issues related to the two electoral methods, on the legal basis of the Basic Law and the relevant Interpretation and Decisions of the NPCSC. Our reply to the questions raised by Dr LAM is as follows:
As at end of March 2014, the Administration has received over 20 000 written submissions from various organizations and individuals. We are still processing the submissions. Among the submissions that have been processed, the majority are from individuals.
After the consultation period, the Administration will consolidate and summarize the views received. According to the Interpretation made by the NPCSC in 2004, the Chief Executive shall make a report to the NPCSC on LEGISLATIVE COUNCIL ─ 9 April 2014 9585 whether there is a need to amend the methods for selecting the Chief Executive and for forming the Legislative Council (that is, the "First Step"), and the NPCSC shall make a determination (the "Second Step"). After the NPCSC has made the determination, we expect the second stage public consultation can be launched in around the 4th quarter of 2014, and the package of proposals to amend the annexes to the Basic Law can be put forward to the Legislative Council after the completion of the consultation (the "Third Step").
According to the Basic Law and the Interpretation made by the NPCSC in 2004, any proposal has to obtain endorsement by a two-thirds majority of all the Members of the Legislative Council, consent of the Chief Executive, and reported to the NPCSC for approval or for the record. To facilitate communication and discussion among various parties and Members of the Legislative Council, the Chief Secretary for Administration invited all Members of the Legislative Council for dinner and breakfast meetings in January and March 2014 respectively, to have exchanges of views and discussions in groups on the issues related to the two electoral methods. The Administration considers such meetings useful in promoting communication and creating a good atmosphere for forging consensus. The HKSAR Government is willing to arrange in the future any occasions that could be beneficial to facilitating rational and peaceful communication and forging consensus among different political parties, the HKSAR Government, and even representatives from the CPG. Attendance lists of the abovementioned dinners and breakfast meetings are at Annex.
Members of the Legislative Council have always expressed a wish to visit the Mainland. The Chief Executive is supportive of such visit and at his suggestion, the Central Authorities have agreed to arrange for all Members of Legislative Council to visit Shanghai during 12-13 April 2014. With the support from the Central Authorities and assistance of the Shanghai Municipal Government, and taking into account Members' suggestions and travelling time as set out in the incoming letter from the President of Legislative Council dated 21 March 2014 as well as the circumstances in Shanghai, Chief Executive has provided to the President of Legislative Council arrangements related to the visit vide a letter of 27 March 2014. The visit will include a meeting cum official meal with Shanghai leaders; visits to Hongqiao central business district and transportation hub, manufacturing site of Commercial Aircraft Corporation of 9586 LEGISLATIVE COUNCIL ─ 9 April 2014
China (where the first China trunk liner is being manufactured) and Shanghai Urban Planning Exhibition Centre; seminars by experts on international relations and diplomatic policy as well as national comprehensive reform; a briefing session by the Shanghai Municipal Government on Shanghai Free Trade Zone (there will be interactive discussion during the seminars and briefing session); reserving half day for Mr WANG Guangya, Director of the Hong Kong and Macau Affairs Office of the State Council, Mr LI Fei, Chairman of Hong Kong Basic Law Committee of NPCSC, and Mr ZHANG Xiaoming, Director of Liaison Office of the CPG in the HKSAR, to meet with Legislative Council Members, including listening to Legislative Council Members' opinions and suggestions and exchanging views on topics of mutual interest such as social and economic development in Hong Kong, relationship between Hong Kong and the Mainland and constitutional development, and so on; and a gathering with Hong Kong residents and businessmen in Shanghai to understand their situation and exchange views on developments of Hong Kong and Shanghai.
The Consultation Document on the Methods for Selecting the Chief Executive in 2017 and for Forming the Legislative Council in 2016, published on 4 December 2013, has set out for public reference the design principles of the political structure of the HKSAR, relevant Articles in the Basic Law, as well as major issues and related questions to be considered in relation to the method for selecting the Chief Executive. The Secretary for Justice has written an article on 29 January 2014 on certain legal viewpoints with respect to Article 45 of the Basic Law for public reference in considering the method for selecting the Chief Executive in 2017. The HKSAR Government is currently consulting the public on the method for selecting the Chief Executive in 2017, we will not comment on views or suggestions from specific organizations or individuals at this stage.
The HKSAR Government fully respects the freedom of expression of every individual. However, we also hope that different sectors of the community could forge consensus on the method for selecting the Chief Executive in 2017 with a rational and pragmatic mind to take forward constitutional development in Hong Kong. Participants of any public activities should abide by the law without affecting public order, and express their views and opinions in a peaceful manner. Illegal activities will be handled strictly in accordance with the law.
LEGISLATIVE COUNCIL ─ 9 April 2014 9587
According to the description of duties of the Chief Executive in the Basic Law, for example, as stipulated in Article 43 of the Basic Law, the Chief Executive shall be accountable to the CPG and the HKSAR in accordance with the provisions of the Basic Law; Article 48 of the Basic Law stipulates that the Chief Executive shall lead the Government of the HKSAR, be responsible for the implementation of the Basic Law, and implement the directives issued by the CPG in respect of the relevant matters provided for in the Basic Law, as well as conduct, on behalf of the HKSAR, external affairs and other affairs as authorized by the Central Authorities. Besides, according to section 16(7) of the Chief Executive Election Ordinance (Cap. 569), a nomination of a Chief Executive election candidate shall be accompanied by a declaration to the effect that he will uphold the Basic Law and pledge allegiance to the HKSAR. Article 104 of the Basic Law also stipulates that when assuming office, the Chief Executive, principal officials, Members of the Executive Council and of the Legislative Council, judges of the courts at all levels and other members of the judiciary in the HKSAR must, in accordance with law, swear to uphold the Basic Law of the HKSAR of the People's Republic of China and swear allegiance to the HKSAR of the People's Republic of China. According to section 16A(1) of the Oaths and Declarations Ordinance (Cap. 11), a person appointed or elected as the Chief Executive shall take the Oath of the Chief Executive before entering upon any of the duties of his office. That Oath is in line with the requirement of Article 104 of the Basic Law regarding the Chief Executive's swearing in, and the requirement of Article 47 of the Basic Law that the Chief Executive must be a person of integrity, dedicated to his or her duties. As reflected in the above, the Chief Executive being the head of the HKSAR as well as the head of the executive authorities of the HKSAR has an important and unique status; he is elected in the HKSAR and appointed by the CPG, and is accountable to the CPG and the HKSAR pursuant to the Basic Law. He also has to uphold and implement the Basic Law. The requirements on the Chief Executive as stipulated in the Basic Law clearly illustrate that the Chief Executive must be a person who loves the country and loves Hong Kong, in order to ensure that he would faithfully discharge the constitutional duties this important position entails.
9588 LEGISLATIVE COUNCIL ─ 9 April 2014
Annex
Attendance of Discussion Sessions with Members of the Legislative Council on Issues Related to the Two Electoral Methods hosted by the Chief Secretary for Administration in January and March 2014
Activity and Date Held Attendance First dinner on Chief Secretary for the Administration, Secretary for constitutional Justice, and Secretary for Constitutional and Mainland development Affairs (hereafter referred to as "Members of the Task (6 January 2014) Force on Constitutional Development"), Director of Chief Executive's Office, Undersecretary for Constitutional and Mainland Affairs and relevant officials from the Constitutional and Mainland Affairs Bureau, relevant officials from the Chief Secretary for Administration's Office and Secretary for Justice's Office, the Honourable James TO Kun-sun, the Honourable Frederick FUNG Kin-kee, the Honourable Vincent FANG Kang, the Honourable Starry LEE Wai-king, Dr the Honourable LAM Tai-fai, the Honourable CHAN Kin-por, the Honourable NG Leung-sing, the Honourable Gary FAN Kwok-wai, Dr the Honourable Kenneth CHAN Ka-lok, the Honourable CHAN Yuen-han, the Honourable Dennis KWOK, Dr the Honourable Fernando CHEUNG Chiu-hung, the Honourable SIN Chung-kai, the Honourable POON Siu-ping, Dr the Honourable CHIANG Lai-wan, Ir Dr the Honourable LO Wai-kwok, the Honourable Christopher CHUNG Shu-kun Second dinner on Members of the Task Force on Constitutional constitutional Development, Director of Chief Executive's Office, development Undersecretary for Constitutional and Mainland Affairs (7 January 2014) and relevant officials from the Constitutional and Mainland Affairs Bureau, relevant officials from the Chief Secretary for Administration's Office and Secretary for Justice's Office, the Honourable CHAN Kam-lam, the Honourable Emily LAU Wai-hing, the Honourable Tommy CHEUNG Yu-yan, the Honourable Jeffrey LAM Kin-fung, the Honourable LEGISLATIVE COUNCIL ─ 9 April 2014 9589
Activity and Date Held Attendance Andrew LEUNG Kwan-yuen, the Honourable WONG Ting-kwong, the Honourable Ronny TONG Ka-wah, the Honourable Cyd HO Sau-lan, Dr the Honourable LEUNG Ka-lau, the Honourable WONG Kwok-kin, the Honourable Paul TSE Wai-chun, the Honourable IP Kin-yuen, Dr the Honourable Elizabeth QUAT, the Honourable CHUNG Kwok-pan Third dinner on Members of the Task Force on Constitutional constitutional Development, Director of Chief Executive's Office, development Undersecretary for Constitutional and Mainland Affairs (9 January 2014) and relevant officials from the Constitutional and Mainland Affairs Bureau, relevant officials from the Chief Secretary for Administration's Office and Secretary for Justice's Office, the Honourable LEE Cheuk-yan, the Honourable TAM Yiu-chung, the Honourable WONG Kwok-hing, Prof the Honourable Joseph LEE Kok-long, the Honourable Alan LEONG Kah-kit, the Honourable Michael TIEN Puk-sun, the Honourable WU Chi-wai, the Honourable YIU Si-wing, the Honourable Kenneth LEUNG, Dr the Honourable KWOK Ka-ki, the Honourable Christopher CHEUNG Wah-fung, the Honourable Martin LIAO Cheung-kong, the Honourable TANG Ka-piu, the Honourable Tony TSE Wai-chuen Fourth dinner on Members of the Task Force on Constitutional constitutional Development, Director of Chief Executive's Office, development Undersecretary for Constitutional and Mainland Affairs (14 January 2014) and relevant officials from the Constitutional and Mainland Affairs Bureau, relevant officials from the Chief Secretary for Administration's Office and Secretary for Justice's Office, the Honourable Albert HO Chun-yan, the Honourable LEUNG Yiu-chung, Dr the Honourable LAU Wong-fat, the Honourable CHAN Hak-kan, Dr the Honourable Priscilla LEUNG Mei-fun, the Honourable CHEUNG Kwok-che, the Honourable IP Kwok-him, the Honourable Mrs Regina IP LAU Suk-yee, the Honourable Claudia MO, the Honourable James TIEN Pei-chun, the Honourable Steven HO Chun-yin, the Honourable Frankie YICK Chi-ming, the Honourable MA Fung-kwok, the Honourable Charles 9590 LEGISLATIVE COUNCIL ─ 9 April 2014
Activity and Date Held Attendance Peter MOK, the Honourable CHAN Han-pan, the Honourable Alice MAK Mei-kuen, the Honourable KWOK Wai-keung, Dr the Honourable Helena WONG Pik-wan First breakfast meeting Members of the Task Force on Constitutional on constitutional Development, Director of Chief Executive's Office, development Undersecretary for Constitutional and Mainland Affairs (18 March 2014) and relevant officials from the Constitutional and Mainland Affairs Bureau, relevant officials from the Chief Secretary for Administration's Office and Secretary for Justice's Office, officials from the Legal Department of the CPGLO, the Honourable James TO Kun-sun, the Honourable CHAN Kam-lam, the Honourable TAM Yiu-chung, the Honourable Vincent FANG Kang, the Honourable WONG Kwok-hing, the Honourable Jeffrey LAM Kin-fung, the Honourable Ronny TONG Ka-wah, Dr the Honourable Priscilla LEUNG Mei-fun, the Honourable Mrs Regina IP LAU Suk-yee, the Honourable LEUNG Kwok-hung, the Honourable Gary FAN Kwok-wai, the Honourable SIN Chung-kai, the Honourable IP Kin-yuen, Ir Dr the Honourable LO Wai-kwok, the Honourable Tony TSE Wai-chuen Second breakfast Members of the Task Force on Constitutional meeting on Development, Director of Chief Executive's Office, constitutional Undersecretary for Constitutional and Mainland Affairs development and relevant officials from the Constitutional and (19 March 2014) Mainland Affairs Bureau, relevant officials from the Chief Secretary for Administration's Office and Secretary for Justice's Office, officials from the Legal Department of the CPGLO, the Honourable Frederick FUNG Kin-kee, the Honourable Andrew LEUNG Kwan-yuen, the Honourable WONG Ting-kwong, the Honourable Starry LEE Wai-king, Dr the Honourable LAM Tai-fai, the Honourable CHAN Kin-por, the Honourable NG Leung-sing, the Honourable WU Chi-wai, Dr the Honourable KWOK Ka-ki, the Honourable KWOK Wai-keung, the Honourable Martin LIAO Cheung-kong, the Honourable POON Siu-ping, the Honourable CHUNG Kwok-pan LEGISLATIVE COUNCIL ─ 9 April 2014 9591
Activity and Date Held Attendance Third breakfast meeting Members of the Task Force on Constitutional on constitutional Development, Director of Chief Executive's Office, development Undersecretary for Constitutional and Mainland Affairs (21 March 2014) and relevant officials from the Constitutional and Mainland Affairs Bureau, relevant officials from the Chief Secretary for Administration's Office and Secretary for Justice's Office, officials from the Legal Department of the CPGLO, the Honourable Emily LAU Wai-hing, the Honourable Tommy CHEUNG Yu-yan, the Honourable CHAN Hak-kan, the Honourable Paul TSE Wai-chun, the Honourable Michael TIEN Puk-sun, the Honourable James TIEN Pei-chun, the Honourable Steven HO Chun-yin, the Honourable Charles Peter MOK, the Honourable CHAN Yuen-han, the Honourable Dennis KWOK, the Honourable Christopher CHEUNG Wah-fung, Dr the Honourable Elizabeth QUAT, the Honourable TANG Ka-piu Fourth breakfast Members of the Task Force on Constitutional meeting on Development, Director of Chief Executive's Office, constitutional Undersecretary for Constitutional and Mainland Affairs development and relevant officials from the Constitutional and (26 March 2014) Mainland Affairs Bureau, relevant officials from the Chief Secretary for Administration's Office and Secretary for Justice's Office, officials from the Legal Department of the CPGLO, the Honourable Albert HO Chun-yan, Prof the Honourable Joseph LEE Kok-long, the Honourable CHEUNG Kwok-che, the Honourable WONG Kwok-kin, the Honourable IP Kwok-him, the Honourable Alan LEONG Kah-kit, the Honourable Frankie YICK Chi-ming, the Honourable YIU Si-wing, the Honourable MA Fung-kwok, the Honourable CHAN Han-pan, the Honourable LEUNG Che-cheung, the Honourable Alice MAK Mei-kuen, Dr the Honourable Helena WONG Pik-wan, Dr the Honourable CHIANG Lai-wan, the Honourable Christopher CHUNG Shu-kun
9592 LEGISLATIVE COUNCIL ─ 9 April 2014
Measures to Support Breastfeeding
16. DR ELIZABETH QUAT (in Chinese): President, some women have relayed to me that at present the support facilities for breastfeeding are insufficient, public education for promoting breastfeeding is ineffective, and support from members of the public and family members for breastfeeding is also inadequate and, as a result, quite a number of mothers of newborn babies have given up or prematurely stopped breastfeeding. In this connection, will the Government inform this Council:
(1) whether it will introduce legislation to require that breastfeeding rooms and baby-sitting rooms be provided in public places such as shopping malls in newly constructed buildings, and require that when renovation works are carried out for the public places in the existing buildings, such facilities have to be retrofitted; if it will, of the details and the legislative timetable; if not, the reasons for that;
(2) whether it will take measures to encourage private enterprises to provide staff who have resumed duty after maternity leave with an environment congenial to breastfeeding mothers, including the time and place for expressing breast milk, as well as refrigerating facilities for storing breast milk; if it will, of the details; if not, the reasons for that;
(3) among the offices of various government departments, of the current number and percentage of those providing support facilities for breastfeeding mothers; whether it will step up the supervision of various government departments in their implementation and enforcement of the policy of the Department of Health (DH) on support for breastfeeding, so as to further encourage the departments to provide staff who have resumed duty after maternity leave with an environment congenial to breastfeeding mothers; if it will, of the details and the timetable for all departments to fully implement the policy; if not, the reasons for that;
(4) whether it will consider lengthening the statutory maternity leave to enable working women to feel at ease in breastfeeding their babies LEGISLATIVE COUNCIL ─ 9 April 2014 9593
at home for a longer period after giving birth, so that they will not stop breastfeeding prematurely owing to a lack of support facilities in their work place; if it will, of the details and the legislative timetable; if not, the reasons for that;
(5) whether it will further step up the publicity on the merits of breastfeeding so as to strengthen support for breastfeeding in the community, with a view to reducing the pressure faced by women who breastfeed their babies; if it will, of the details; if not, the reasons for that;
(6) whether it will step up training for healthcare personnel of Maternal and Child Health Centres (MCHCs) in providing breastfeeding mothers with guidance and support on breastfeeding skills; if it will, of the details; if not, the reasons for that; and
(7) whether it will encourage private and public hospitals to provide more training courses on breastfeeding skills and knowledge for participation by pregnant women, mothers of newborn babies and their family members, and step up support measures to encourage more pregnant women to choose in advance to breastfeed their babies immediately after delivery; if it will, of the details; if not, the reasons for that?
SECRETARY FOR FOOD AND HEALTH (in Chinese): President, breastfeeding is an important public health issue. The World Health Organization recommends breastfeeding as the way of providing the best food for healthy growth and development of infants. It recommends that babies under six months of age should be exclusively breastfed, and then continue to be breastfed along with supplementary foods up to two years of age or beyond. The Government has all along endeavoured to promote, protect and support breastfeeding, and implement this policy through the DH and the Hospital Authority (HA). Healthcare professionals provide counselling service for breastfeeding mothers, and help post-natal women acquire breastfeeding skills and tackle the problems they may encounter during breastfeeding.
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Moreover, the Food and Health Bureau set up a Committee on Promotion of Breastfeeding (the Committee) in early April 2014 under the chairmanship of the Under Secretary for Food and Health. Members include representatives from various professional healthcare bodies, academia as well as representatives of the organizations and individuals that have participated in the promotion of breastfeeding. The Committee will make specific recommendations to further strengthen the promotion, protection and support for breastfeeding. Its objective is to enhance the sustainability of breastfeeding and promote breastfeeding as a norm for babycare widely accepted by the general public. My reply to the various parts of the question is as follows:
(1) The Government has been actively promoting the provision of babycare facilities in government offices and public places. The Advisory Guidelines on Babycare Facilities were developed in August 2008 for reference by government departments and public organizations. As at December 2013, there were 227 babycare rooms on government premises. In the coming few years, at least 50 new babycare rooms will be provided on various government premises, including facilities of the Leisure and Cultural Services Department (such as stadia, libraries and civic centres, and so on), community facilities of the Home Affairs Department and new shopping malls in housing estates of the Housing Department.
The Government also issued the Practice Note on the Provision of Babycare Rooms in Commercial Buildings (the Practice Note) in February 2009 to encourage and facilitate the provision of babycare rooms on private commercial premises. The response of property developers was positive. For instance, babycare rooms have been provided in shopping malls of The Link and the MTR Corporation, the Urban Renewal Authority has taken reference to the Practice Note and made the provision of babycare rooms a mandatory tendering requirement for all medium-to-large shopping malls. Babycare and breastfeeding facilities have also been made available, according to needs, in some large shopping malls, department stores, and hotels, and so on. Currently, the Government has no plan to introduce legislation to require the provision of babycare rooms in public places.
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(2) and (3)
The Government attaches great importance in providing appropriate support to breastfeeding mothers when they return to work. In this regard, the DH has been supportive of breastfeeding by its staff. It has made the work environment accommodative to breastfeeding and put in place supportive measures which include (i) making arrangements to meet the needs of staff in expressing breast milk during working hours; (ii) providing private space with comfortable chairs and electric outlets for breast pumps in the workplace; and (iii) providing refrigerating facilities for safe storage of breast milk. In addition, the Food and Health Bureau issued an advice on public health to individual government bureaux and departments in August 2013, encouraging them to implement the breastfeeding friendly workplace policy by putting in place the above measures so as to facilitate employees to continue breastfeeding after returning to work. Positive responses have been received. According to the information provided to the DH by bureaux and departments in March 2014, some 40 bureaux and departments have already implemented or will implement the breastfeeding friendly workplace policy. We believe that other bureaux and departments will adopt such policy gradually. The DH has also published a leaflet entitled "An Employee's Guide to Combining Breastfeeding with Work" for reference by breastfeeding and working mothers and members of the public. We hope that as the largest employer in Hong Kong, the Government can set an example in promoting the breastfeeding friendly workplace policy and encourage private enterprises to implement the same policy. Moreover, the Committee will provide specific recommendations to encourage private enterprises to implement the breastfeeding friendly workplace policy.
(4) The Labour and Welfare Bureau indicates that under the existing provisions of the Employment Ordinance (EO), a pregnant employee is entitled to 10 weeks' maternity leave if she has been employed under a continuous contract immediately before the commencement of maternity leave. If the employee encounters health problems before or after delivery, the employer must allow her to take an additional period of leave for a maximum of four weeks. If the employee takes additional leave with the agreement of the employer, 9596 LEGISLATIVE COUNCIL ─ 9 April 2014
the continuity of her employment contract will not be affected. Moreover, if agreed by the employer, the employee may choose to commence her maternity leave two weeks instead of four weeks before the expected date of confinement and take the remaining maternity leave after she has given birth. This flexible way of taking maternity leave enables the employee to have more time for breastfeeding and recuperation after confinement.
The Administration is of the view that the provisions on maternity protection in the EO, including those on the duration and the taking of maternity leave, have provided comprehensive protection for pregnant employees in various aspects and have struck a reasonable balance between the interests of both the employers and the employees. Currently, the Government has no plan to extend the duration of statutory maternity leave.
(5) The DH has been actively promoting and supporting breastfeeding through different channels. These include (i) training maternal and child health professionals and producing a self-learning VCD on breastfeeding; (ii) providing health information on breastfeeding for parents through workshops, production and distribution of educational materials such as booklets and videos, and so on, as well as the webpage of Family Health Service of the DH; (iii) providing guidance and skills support for breastfeeding mothers through the MCHCs and the breastfeeding hotline; and (iv) organizing publicity activities (for example, showing of promotional videos on TV and buses, advertising on bus bodies and attending media interviews, and so on) to enhance public awareness of breastfeeding.
(6) and (7)
The DH provides breastfeeding training regularly for newly appointed doctors and nurses at the MCHCs and organizes continuing education courses regularly for serving healthcare professionals.
In addition, to strengthen training about breastfeeding for local doctors, the DH, in collaboration with a number of professional bodies, produced a breastfeeding learning package in 2011 targeted LEGISLATIVE COUNCIL ─ 9 April 2014 9597 at obstetricians, pediatricians, doctors working in accident and emergency departments, family physicians and nurses, who provide support for pregnant and breastfeeding women. The aim is to foster their understanding of the breastfeeding promotion policy and update them on the latest information about breastfeeding so that they can render effective counselling service and professional support to local mothers and their babies.
The DH also organizes training courses from time to time to enhance the breastfeeding knowledge and skills of healthcare professionals. A train-the-trainer course on breastfeeding co-organized by the DH and the HA was held in February 2014, it was attended by healthcare professionals from the DH, the HA and private hospitals.
The HA provides local mothers and their family members with sufficient information on breastfeeding skills and knowledge through various channels such as antenatal and postnatal health talks, and production of VCDs for lending to pregnant women and their family members. Post-natal workshops are conducted on group or individual basis in post-natal wards and special care baby units to equip breastfeeding mothers with the necessary skills and help working mothers prepare for sustained breastfeeding after returning to work. In order to create a favourable environment for breastfeeding, public hospitals encourage mothers to get skin-to-skin contact with their newborn babies as early as possible. Arrangements will also be made as far as possible for mothers to stay with their babies in the same ward round-the-clock so that they can feed according to the needs of their babies. As at March 2014, there were 73 designated babycare rooms in the HA as well as its public hospitals and clinics.
In addition, the HA announced in August 2013 that it would implement by phases an accreditation scheme on Baby Friendly Hospital (BFH) in its eight public hospitals with maternity wards. Among these hospitals, the Queen Elizabeth Hospital, Queen Mary Hospital and Kwong Wah Hospital are the first batch of hospitals participating in the scheme. The objective of the BFH accreditation scheme is to support more mothers to sustain breastfeeding through the provision of services and guidance.
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Special Schools for Students with Special Educational Needs in Islands District
17. DR KWOK KA-KI (in Chinese): President, in as early as 2004, the authorities proposed building a special school in Tung Chung. In reply to a written question from a Member of this Council on 4 May 2011, the Education Bureau indicated that it had preliminarily selected a suitable site for building the school, and was actively studying the feasibility of the related land use and conducting technical studies with the departments concerned. It has been learnt that quite a number of parents of students with special educational needs, as well as concern groups, have expressed dissatisfaction that so far the authorities have not yet announced the building project for the school. In this connection, will the Government inform this Council:
(1) of the latest progress of the project to build a special school in Tung Chung, including the site selected and the construction schedule, as well as details of the relevant consultation exercise, including the dates and venues of consultative sessions, the attending officials and the public views received;
(2) of the number of various types of special schools across the territory and the number of places offered by them each year since 2004, with a breakdown by District Council district; and
(3) of the number of students currently living in the Islands District and attending special schools in other districts; whether the Government has any measure in place to help the parents of such students to ease their stress and burden of transport expenses arising from escorting children to and from schools; if it has, of the details; if not, the reasons for that?
SECRETARY FOR EDUCATION (in Chinese): President,
(1) The Government has all along planned to build a special school in Tung Chung to cater for students with special educational needs (SEN) in the district. A site in Area 27 of Tung Chung was initially LEGISLATIVE COUNCIL ─ 9 April 2014 9599
earmarked for this purpose and preparations such as technical feasibility study and school design had commenced. In the course of the project, however, we met with strong opposition from some local residents over concerns about noise and traffic implications, and so on. Efforts had been made to explain the school building project to the relevant residents in an attempt to ease their worries. Failing to reach a consensus with the residents, we decided to identify an alternative site in the district for the planned special school. Details of the earlier consultation regarding Area 27 of Tung Chung are in Annex 1.
To meet Tung Chung residents' urgent need of special education, the Planning Department has reserved a site for the Education Bureau in Area 108 of Tung Chung for special school use following discussion between Education Bureau and relevant government departments. Depending on its complexity, a school building project normally takes about six years or more from planning to completion, as it requires technical feasibility study, architectural design and vetting, as well as funding application.
The Architectural Services Department has completed the technical feasibility study of Area 108 of Tung Chung. The report of the technical feasibility study was also vetted and endorsed by the Development Bureau in February 2014. The Education Bureau is planning to seek funding for commissioning the detailed design. Prior to seeking funding approval from the Legislative Council for construction of the school, we will also conduct district consultation and liaise closely with the school sponsoring body and the stakeholders concerned to gauge their views. If everything goes smoothly, we expect the construction project of the school will commence in 2016 for completion in 2018.
(2) There are different types of special schools, including schools for children with mild intellectual disability, schools for children with moderate intellectual disability, schools for children with severe intellectual disability, schools for children with visual impairment, schools for children with hearing impairment, schools for children 9600 LEGISLATIVE COUNCIL ─ 9 April 2014
with physical disability, schools for social development and hospital school. Since students who need to be placed in special schools are relatively smaller in number than those in ordinary schools, the Education Bureau will plan and provide special school places by region instead of setting up different types of special schools in each district. A breakdown of the number of special schools and special school places by District Council district from the 2004-2005 to 2013-2014 school years is set out at Annex 2.
(3) The Education Bureau will arrange for students to attend suitable special schools in the region to which their places of residence belong. Under the existing school placement mechanism, students living on outlying islands will be arranged to study in special schools on Hong Kong Island. They will normally travel to Central by ferry, and will be picked up by school buses provided by their schools at the pier. Students living in Tung Chung will be referred to special schools in Kwai Chung and Tsing Yi in the New Territories West region. School bus service is provided by their schools. There are also parents who choose to take their children to and from school by themselves. If parents have financial difficulties in meeting their children's travelling expenses, they may apply for travel subsidy for their children under the Student Travel Subsidy Scheme administered by the Student Financial Assistance Agency. As for families eligible for the Comprehensive Social Security Assistance, the travelling expenses (including school bus fares) of their children studying in special schools will be fully subsidized by the Social Welfare Department. Some school sponsoring bodies also provide financial assistance for students in need. For students in need of boarding service, the Education Bureau will arrange boarding placement for them.
In the 2013-2014 school year (as of January 2014), there are a total of 130 students living in Tung Chung and outlying islands (including Lantau Island, Cheung Chau, Lamma Island and Peng Chau), among whom 16 attend school in other regions. Ten of them are receiving boarding service at their schools.
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Annex 1
The Government has conceived the plan to build a special school in Area 27 of Tung Chung since 2004. After completing preparations such as technical feasibility study and school design, the Education Bureau has launched a consultation since 2008. The Education Bureau has approached residents in the vicinity, local dignitaries and organizations, as well as the Islands District Council to gauge their views, which are summarized below:
Reservation about the school building project
(1) The proposed school might cause noise pollution to villagers in the vicinity and disturb the tranquility of the surrounding area.
(2) The proposed school might cause traffic problems in the vicinity.
(3) The construction of a special school on the site in question is not supported and the Education Bureau is requested to identify an alternative site.
Support for the school building project
(1) Students with SEN might need to receive education in other districts and this entails a considerable journey travelling to areas outside Tung Chung (such as Kwai Chung). The long distance involved makes it difficult for parents and schools to provide appropriate care and support for the students.
(2) Given the ongoing development of Lantau, the area will, to a certain extent, have an increased demand for special schools. The Government is therefore urged to build a special school in Tung Chung as early as possible to provide school places for students with SEN.
(3) Despite objection from residents in the vicinity to the school building project, it is hoped that a solution can be worked out at the soonest time possible, so that the school building project can commence on an early date. The progress of the construction work and the date of completion are both of concern.
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(4) Parents and the school sponsoring body are willing to brief residents, local dignitaries and Council Members on the operation of a special school and arrange visits for them in order to enhance mutual communication and exchanges.
(5) The school building project should be subsidized by the Government. The injection of public resources will benefit the entire local community and cater for students with SEN in the district.
(6) It is hoped that the Education Bureau and organizations concerned will step up their efforts in promoting integration within the community and responding to the expectations of the residents, thus creating a win-win situation.
(7) The Government is urged to make continuous efforts to solicit support among residents in the vicinity, local dignitaries, Council Members, and so on, through various consultation channels.
Consultation on the construction of a special school in Area 27 of Tung Chung
Date Consultation/meeting Attendees 1 20 March 2008 Consultation session - Representatives from the with the residents Education Bureau - Mr LEUNG Siu-tong and Mr CHEUNG Kwok-kwong, Islands District Council Members - Representatives from the Architectural Services Department - Representatives from the Islands District Office - Representatives from the Hong Chi Association - Representatives from Ma Wan New Village and Pa Mei Village
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Date Consultation/meeting Attendees 2 22 May 2008 Meeting - Representatives from the Education Bureau - Mr LEUNG Siu-tong, Islands District Council Member
3 19 May 2009 Parents' seminar - Parents and staff entitled "Care for your representatives of pre-primary children starts with institutions, and Ms CHAU education" Chuen-heung, Honourbale TANG Ka-piu, Bill, Mr WONG Fuk-kan, Rainbow and Mr LEUNG Siu-tong, Islands District Council Members - Representatives from the Education Bureau - Representatives from the Hong Chi Association
4 15 June 2009 Islands District - All the Members of the Council meeting Islands District Council
5 1 February 2010 Meeting - Honourable WONG Kwok-hing, Legislative Council Member - Honourable TANG Ka-piu, Islands District Council Member - Parents' representatives of Tung Chung - Representatives from Heep Hong Parents' Association of Heep Hong Society - Representatives from the Education Bureau
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Annex 2
Number of Special Schools and Special School Places by District Council District
2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 Number Number Number Number Number Number Number Number Number Number District of of of of of of of of of of Schools Places Schools Places Schools Places Schools Places Schools Places Central and Western 0 0 0 0 0 0 0 0 0 0 Eastern 4 470 5 480 4 420 3 398 3 398 Southern 6 825 6 815 6 850 6 875 6 875 Wan Chai 3 280 2 210 2 220 2 220 2 220 Kowloon City 2 405 1 330 1 330 1 330 1 330 Kwun Tong 3 500 4 615 4 625 4 660 4 675 Sham Shui Po 7 1 006 7 998 7 980 7 992 7 984 Wong Tai Sin 5 575 5 545 5 535 5 515 5 495 Yau Tsim Mong 2 625 2 595 2 513 2 488 2 516 Kwai Tsing 6 864 6 868 6 908 6 928 6 948 North 2 420 2 440 2 450 2 450 2 480 Sai Kung 3 394 3 414 3 404 3 434 3 424 Sha Tin 5 630 5 620 5 610 5 610 5 600 Tai Po 4 288 4 278 4 286 4 304 4 286 Tsuen Wan 0 0 0 0 0 0 0 0 0 0 Tuen Mun 4 510 4 460 4 510 4 510 4 520 Yuen Long 5 500 5 532 5 552 5 542 5 566 Islands 1 75 1 75 1 75 1 75 1 75
Number of Special Schools and Special School Places by District Council District
2009-2010 2010-2011 2011-2012 2012-2013 2013-2014 Number Number Number Number Number Number Number Number Number Number District of of of of of of of of of of Schools Places Schools Places Schools Places Schools Places Schools Places Central and Western 0 0 0 0 0 0 0 0 0 0 Eastern 3 398 3 431 3 436 3 431 3 426 Southern 6 875 6 910 6 980 6 965 6 955 Wan Chai 2 200 2 195 2 200 2 195 2 190 Kowloon City 1 350 1 360 1 350 1 355 1 355 Kwun Tong 4 705 4 745 4 790 4 785 4 795 Sham Shui Po 7 996 7 1 046 7 1 091 7 1 080 7 1 014 Wong Tai Sin 5 475 5 485 5 520 5 520 5 520 Yau Tsim Mong 2 506 2 496 2 504 2 507 2 512 Kwai Tsing 6 926 6 976 6 1 001 6 996 6 1 006 North 2 440 2 470 2 490 2 485 2 505 LEGISLATIVE COUNCIL ─ 9 April 2014 9605
2009-2010 2010-2011 2011-2012 2012-2013 2013-2014 Number Number Number Number Number Number Number Number Number Number District of of of of of of of of of of Schools Places Schools Places Schools Places Schools Places Schools Places Sai Kung 3 414 3 424 3 414 3 404 3 401 Sha Tin 5 600 5 650 5 695 5 675 5 652 Tai Po 4 294 4 312 4 332 4 340 4 340 Tsuen Wan 0 0 0 0 0 0 0 0 0 0 Tuen Mun 4 520 4 550 4 575 4 570 4 570 Yuen Long 5 576 5 616 5 613 5 613 5 640 Islands 1 75 1 75 1 75 1 75 1 75
Coach Parking Spaces and Tourism Facilities of Kai Tak Cruise Terminal
18. MR PAUL TSE (in Chinese): President, it has been reported that since the Kai Tak Cruise Terminal (the Terminal) Park formally opened to the public in October last year, it has become a new tourist spot for quite a number of local one-day tours. However, to avoid overcrowding of the terminal facilities on port call days, the operator of the Terminal charges each coach a gate fee ranging from $125 to $250 for picking up and dropping off visitors at the Terminal, although spaces are still available for coaches at the coach bays. It is a common scene during the rush hours on Sundays that nearly 100 coaches pick up and drop off visitors on the streets and at the roundabout near the Terminal in order to avoid paying gate fees, which has not only caused traffic jam, but also posed danger to a large number of visitors when they cross the roads. In this connection, will the Government inform this Council:
(1) whether it has assessed the numbers of local tour groups, visitors and coaches visiting the Terminal on port call days; if it has, of the details; whether it has assessed the utilization of the coach parking spaces, public toilets and other facilities at the Terminal; if it has not, whether it will expeditiously conduct such assessments;
(2) whether it has assessed if sufficient tourism facilities are provided at the Terminal at present; whether the Lands Department, the Leisure and Cultural Services Department and the operator of the Terminal have discussed the co-ordination measures to address the transport needs of both cruise visitors and visitors of local tours, so as to avoid any chaos;
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(3) whether it will consider suggesting the operator of the Terminal to adjust the measure of charging gate fees, and to allocate some spaces for free parking by coaches of local tour groups in the light of the parking spaces needed for coaches to pick up and drop off cruise visitors; and
(4) of the latest occupancy rate of the shops in the Terminal Building; the number and types of the shops which have opened and those which are expected to open within this year; whether it has assessed the impact of newly added shops on the visitor flow at the Terminal?
SECRETARY FOR COMMERCE AND ECONOMIC DEVELOPMENT (in Chinese): President, to ensure the safe and smooth flow of traffic and visitors at the Terminal, the terminal operator has implemented special traffic management measures during berthing days, including charging gate fees to control the number of coaches entering the Terminal at the same time. This measure is not applicable on days when there is no cruise vessel berthing at the Terminal. The terminal operator explained the abovementioned special traffic arrangements to the coach trade in the middle of last year.
My reply to the four parts of the question is as follows:
(1) The Kai Tak Cruise Terminal Park (the Park) has been open to the public since mid-October last year. More visitors go to the Park in the morning (from about 9.30 am to noon) and in the afternoon (from about 3 pm to 5 pm) on Saturdays and Sundays. The visitor volume peaks on Sundays, averaging about 8 000 visitors, with around 120 to 150 tour group coaches visiting the Park a day. Currently, there are about eight travel agents that operate local tours to the Terminal. We do not have the actual number of local tour groups in hand.
The primary consideration for the design of the Terminal is to facilitate cruise operation and passenger flow. The Terminal provides 40 coach bays for pick-up/drop-off and 30 queuing spaces. During berthing days, these coach bays are reserved for coaches for cruise passengers, including coaches deployed by travel agents to take cruise passengers on shore excursions as well as shuttle buses LEGISLATIVE COUNCIL ─ 9 April 2014 9607
running between the Terminal and nearby MTR stations and the city centre for cruise passengers.
As for toilet facilities available to local visitors at the public areas of the Terminal and the Park, there are five toilets each for male and female, as well as nine disabled toilets.
Our observation and that of the terminal operator indicate that with proper management measures, the facilities at the Terminal and the Park can largely meet the needs of local visitors.
(2) To ensure that the needs of both cruise passengers and local visitors are properly taken care of, the terminal operator has been closely liaising and co-ordinating with local travel agents, coach operators and relevant departments (including Leisure and Cultural Services Department and the police), to avoid heavy influx of local tour groups to the Terminal during berthing days. Police officers will assist in controlling the crowd and coach traffic outside the Terminal when there is a large number of local visitors. The restaurant and retails shops at both ends of the second floor and the Park will provide better experience for visitors when they are open for business.
(3) To ensure the safe and smooth flow of traffic and visitors during berthing days, the terminal operator will listen to the views of the parties concerned and consider the current coach fee arrangement during berthing days as well as explore other measures in the light of actual circumstances.
(4) The Terminal has an ancillary commercial areas of about 5 600 sq m. The commercial areas, located at both ends of the second floor and the rooftop garden, are managed by the terminal operator. The commercial areas at both ends of the second floor have been leased out. There will be a high-end retail shop with in-store counters for various brands. Another tenant is a catering company, which will operate a Chinese restaurant and other eateries. The tenants are carrying out design and fitting out works. The commercial areas are expected to be open by phases from mid-2014 onwards. As for the commercial areas at the rooftop garden, one of the shops would be leased to a marriage registration service company that provides 9608 LEGISLATIVE COUNCIL ─ 9 April 2014
wedding services. The operator is looking for tenants for the remaining two shops at the rooftop garden, which are suitable for catering or other uses. With the opening of these ancillary commercial areas from the middle of this year by phases (in particular, large-scale banquets can be held in the Chinese restaurant in future), we believe the attractiveness of the Terminal to visitors will be enhanced.
Regulation of Students' Use of Mobile Telephones
19. MR LEUNG KWOK-HUNG (in Chinese): President, quite a number of students studying at Ma On Shan St. Joseph's Secondary School and their parents have complained to me that the rule of the school which prohibits students from bringing mobile telephones to school is unreasonable and that the teachers of the school have also searched students' belongings to enforce the rule. Also, when conducting such searches, the teachers have asked students to make moves which caused embarrassment to the latter, and checked the call logs in students' mobile telephones. In this connection, will the Government inform this Council:
(1) whether it knows the number of searches of students' belongings conducted by the teachers of the aforesaid school in the past five years; whether, during the sports day of the school in the 2013-2014 school year, any teacher searched the belongings of students of the opposite sex;
(2) as the aforesaid school issued on 5 March this year a circular to the parents of students citing the prevention of students from using mobile telephones to carry out improper acts (for example, clandestine photo-taking) at school as its ground for prohibiting students from bringing mobile telephones to school, whether the Education Bureau knows if, in the past five years, there were cases in the aforesaid school in which students were found to have carried out clandestine photo-taking using their mobile telephones; if there were, of the number of such cases and, among them, the number of those referred to the police for follow-up; if not, whether Education Bureau has assessed if prevention of students from using mobile telephones to carry out improper acts as cited in the aforesaid circular is a tenable argument;
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(3) whether it knows, in each of the past five years, the number of students of the aforesaid school who were punished by the school for bringing mobile telephones to school, as well as the details of the punishment;
(4) whether it knows the current requirements and arrangements of aided schools concerning students bringing mobile telephones to school;
(5) whether the Education Ordinance (Cap. 279) and the guidelines issued by Education Bureau to aided schools prohibit students from bringing mobile telephones to school, or using mobile telephones during recess and lunch break or their journeys to and from school; if so, of the legal basis for such rules, and whether Education Bureau will immediately impose punishment on those schools which allow students to do so;
(6) whether Education Bureau has assessed if the school rule of prohibiting students from bringing mobile telephones to school, as well as the practice of checking the call logs of students' mobile telephones have contravened Article 30 of the Basic Law, which stipulates that "[t]he freedom and privacy of communication of Hong Kong residents shall be protected by law", or violated the legislation on protecting personal data privacy and human rights; if it has assessed and the outcome is in the positive, whether Education Bureau will require the schools concerned to abolish that school rule and cease such a practice; if it will, when it will do so; if not, whether Education Bureau will rectify such a situation only after the parents have instituted legal proceedings;
(7) whether any existing legislation has empowered teachers in aided schools to search students' belongings; if so, of the details and the legal basis; and
(8) whether the Education Ordinance and the guidelines issued by Education Bureau to aided schools stipulate that searches of students' belongings should only be conducted by teachers of the same sex; if so, of the details, including the penalty for violating such a requirement; if not, whether Education Bureau will make such a requirement so as to avoid embarrassment being caused to female students by male teachers searching their belongings?
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SECRETARY FOR EDUCATION (in Chinese): President, our consolidated reply to the above questions is as follows:
In accordance with the Education Ordinance (Cap. 279), the management committee or incorporated management committee of a school shall be responsible for ensuring that the school is managed satisfactorily and the education of the pupils is promoted in a proper manner. For implementation, schools should lay down school rules to specify the basic requirements on the behaviour of students in the school, thus cultivating a safe and orderly learning environment for the students. It is set out in the School Administration Guide compiled for aided schools by the Education Bureau that school rules should aim at developing self-discipline in students, thus teaching, guiding and protecting students. School rules should be drawn up with input from teachers, parents and students. Schools should enable their students to apprehend the meaning of the school rules as well as to reach a common understanding towards school rules. Also, school rules should be reviewed periodically. Separately, the Education Bureau requires that schools should enforce their school rules in a lawful, sensible and reasonable manner while ensuring fairness and consistency in application. In maintaining discipline among students, schools should, under all circumstances, pay due regard to students' dignity, individual differences and their rights to education.
The Education Ordinance and the guidelines issued to aided schools by the Education Bureau have not stipulated any specific requirement in relation to students taking mobile phones to school. That said, the School Administration Guide sets out the basic principles that schools may refer to when formulating and enforcing their school rules. Schools may also work out school-based arrangements in the light of their own circumstances. In this connection, the schools should make reference to the relevant legislation of Hong Kong to ensure that the school rules are consistent with the current legislative requirements. Furthermore, the Education Bureau has all along been encouraging schools to maintain close communication with parents. Parents may approach schools direct to express their views or make suggestions for the latter to consider and follow up in a timely manner.
Complaints lodged by the public against schools (such as the incidents mentioned in this question) will be handled by the Education Bureau according to the established procedures. In more specific terms, the schools will directly take LEGISLATIVE COUNCIL ─ 9 April 2014 9611 up complaints relating to their daily affairs (for example, reward and punishment system, student discipline, and so on), while the Education Bureau will directly take up complaints relating to the Education Ordinance, the Education Regulations, education policies and services directly provided by the Education Bureau. If the complaints involve other legislations of Hong Kong, the Education Bureau will advise the complainants to approach the departments/organizations concerned (for example, the Police Force, the Independent Commission Against Corruption, the Equal Opportunities Commission, and so on) or refer the cases to the departments/organizations concerned.
For the cases cited in this question, the Education Bureau's Regional Education Office learned from the school concerned that having regard to the students' learning environment and with their interests in mind, the school considers that adequate facilities have already been provided to cater for the general needs of students during their stay in school and therefore they need not take their mobile phones to school for use. In case of urgent need, students and parents may communicate with each other over the phone provided at the school office. If individual students have a particular need to take their mobile phones to school, the school may exercise discretion flexibly. We have also learned that parents generally understand and support the arrangements. Moreover, the school is actively explaining to parents and students the rationale for enforcing this school rule and its emphasis on students' interests in terms of learning when responding to their requests.
With regard to the child's interests and those of the school as a whole, when a parent sends his child to a school, he delegates to the school principal and teachers his own authority of parenting. Schools then implement the school rules in a reasonable manner meeting the circumstantial needs, thus maintaining disciplines and the welfare of students as a whole. However, to search a student's belongings is an interference with his privacy. Such a search should only be conducted when it is judged to be lawful and not arbitrary. If in doubt, the school should consult the respective Police School Liaison Officers or the school's legal adviser.
In the event that a search is inevitable, the school should observe the Principles and Procedures for Searching a Student's Belongings set out in the 9612 LEGISLATIVE COUNCIL ─ 9 April 2014
School Administration Guide. It is of utmost importance that the search should be considered necessary, lawful, appropriate and justifiable by the school and the search should be conducted in such a way that due regard is paid to the feelings and dignity of the student being searched. If there is any finding during the search that may make the student liable to criminal prosecution, the teacher should report to the police immediately.
It falls within the school's daily operation and internal affairs to formulate and enforce school rules. The responsibility should rest with the school itself. Schools are not required to submit relevant information (such as the misconduct of students in detail) to the Education Bureau. Hence, we do not have the requested information of individual schools.
Implementation of Competition Ordinance
20. MR CHARLES PETER MOK (in Chinese): President, this Council enacted the Competition Ordinance (Cap. 619) (the Ordinance) in June 2012 to provide a legal framework to curb anti-competitive practices in various sectors in order to promote fair and effective competition. The authorities expect the Competition Commission (the Commission) to commence enforcement of the relevant provisions of the Ordinance next year. In this connection, will the Government inform this Council:
(1) whether it knows the progress of the work on drafting the regulatory guidelines and conducting consultation on the relevant matters by the Commission;
(2) whether it knows the Commission's work plan for organizing educational and publicity activities for the public and the trades; whether the Commission will prepare specific regulatory guidelines and host relevant seminars tailored made for individual trades and industries, so as to assist various trades in understanding the requirements of the Ordinance and to enhance their knowledge of anti-competitive practices, such as collusive price-fixing and abuse of market power;
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(3) whether it knows if the Commission will (i) monitor the anti-competitive practices in individual trades and industries in order to promote a level-playing field in Hong Kong, and (ii) monitor any anti-competitive phenomenon caused by the economic activities of exempted statutory bodies, so as to ensure that these bodies do not abuse the exemption arrangement; and
(4) given that the competition provisions of the Broadcasting Ordinance (Cap. 562) and the Telecommunications Ordinance (Cap. 106) will be repealed upon the implementation of the relevant transitional arrangements, and that concurrent jurisdiction over such matters will be conferred on the Commission and the Communications Authority (CA) under the Ordinance for which they should prepare and sign a Memorandum of Understanding (MoU) as soon as possible to co-ordinate the performance of their respective functions under the Ordinance, whether it knows the contents of the MoU, if the Commission and CA will consult this Council and the public on such contents, and how they will handle complaints about anti-competitive practices in the broadcasting and telecommunications industries; if there will be consultations, of the details and their timetable?
SECRETARY FOR COMMERCE AND ECONOMIC DEVELOPMENT (in Chinese): President, my reply to the various parts of the question is as follows:
(1) and (2)
Since the enactment of the Ordinance, the Government has been working closely with the Commission to prepare for the full implementation of the Ordinance. One of the major tasks of the Commission leading to the full commencement of the Ordinance is the preparation of guidelines. The Commission's priority this year is to conduct consultation on various documents required under the Ordinance. These documents include guidelines on the competition rules, complaint handling and investigations. The Commission has initiated the preparation of the related documents, and has engaged legal consultants to advise on such preparatory work.
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The Commission's plan is to conduct promotion of the Ordinance, and discuss with members of the public and various sectors on matters that the Commission should take into account when formulating the guidelines. The Commission expects that such promotion and discussions will enhance public understanding of the Ordinance, enable small and medium enterprises and other sectors to have a better grasp of the provisions of the Ordinance and their implementation details, as well as to facilitate their making of the necessary preparation for the full implementation of the Ordinance. The Commission also plans to discuss with the business community on how to develop risk management systems, good practices and internal control tools to achieve compliance with the Ordinance and the guidelines.
The Commission plans to start the relevant promotion and discussions with various sectors in the first half of this year and, depending on the work progress, consult the Legislative Council on the relevant documents before end of this year.
(3) At present, the Commission is to focus first and foremost on the preparatory work that is required for the full commencement of the Ordinance. The Commission is also keeping a close watch on the views on competition issues in the community. As regards statutory bodies exempted from the Ordinance, they should adhere to the competition rules despite that they do not come under the regulatory purview of the Commission. The Government will seek to ensure that unless there are justifiable causes, the exempted statutory bodies will not engage in anti-competitive activities.
(4) The Ordinance provides that the CA will have concurrent jurisdiction with the Commission in respect of the investigation and bringing of enforcement proceedings of competition cases in the broadcasting and telecommunications sectors. On the handling of complaints against anti-competitive practices, the Commission and the CA will conduct enforcement actions in accordance with the requirements on concurrent jurisdiction in the Ordinance upon the full commencement of the Ordinance.
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The Commission and the CA have initiated the preparation of the MoU as required under the Ordinance. The MoU seeks to co-ordinate the performance of functions of the Commission and the CA under the Ordinance, and set out the detailed arrangements for the two bodies in respect of dispute resolution, provision of assistance, allocation of responsibility, supply of information, authorship of educational materials or guidelines, and so on. The Commission and the CA expect to consult the Legislative Council on the draft MoU before end of this year.
Granting of Short-term Tenancies at Nominal Rent
21. MR WU CHI-WAI (in Chinese): President, under the existing policy, the Government may grant short term tenancies (STTs) for temporary use of vacant Government land that has no intended use or is not required for development in the near future. Where an STT is applied for a non-profit-making purpose and has the "policy support" of the relevant Policy Bureau or department, the District Lands Office concerned under the Lands Department (LandsD) will grant the tenancy at nominal rent (STTs at nominal rent). In his Direct Investigation Report in March 2012 (the Report), The Ombudsman expressed concern about the implementation of the related monitoring system, including failure on the part of LandsD and the Policy Bureaux or departments giving "policy support" to conduct regular site inspections of the leased land, to follow the procedures for tenancy renewal, and to take enforcement actions (including unauthorized building works on the sites and illegal sub-letting against tenancy breaches), and so on. Regarding the granting of STTs at nominal rent, will the Government inform this Council:
(1) of the following information on each of the Government land sites leased on STTs at nominal rent (set out in the following table by the responsible district land office):
(i) location/address of the site;
(ii) site area;
(iii) tenant;
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(iv) use of land put forward by the tenant in the first STT;
(v) the name of the Policy Bureau/department giving the "policy support" and the justification for that;
(vi) date on which the STT was first granted;
(vii) date on which the STT was renewed most recently;
(viii) whether the LandsD had conducted inspections of the site and consulted the Policy Bureau/department giving the "policy support" prior to the most recent tenancy renewal; and
(ix) breach of lease by the tenant (if applicable);
District land office: (i) (ii) (iii) (iv) (v) (vi) (vii) (viii) (ix)
(2) whether the LandsD has followed up on the five recommendations made by The Ombudsman in the Report; if it has, of the details; and
(3) of the number of cases in each of the past five years in which the tenants of the sites mentioned in part (1) were found to have breached the tenancy terms; whether the authorities terminated the tenancies concerned; if they did, set out the details of each case?
SECRETARY FOR DEVELOPMENT (in Chinese): President, generally, when an unleased or unallocated government site is not immediately required for long-term use or development, the LandsD may consider putting the site to appropriate temporary use including allocating the site by way of Temporary Government Land Allocation to Policy Bureau or department or letting out the site on Short Term Tenancy (STT) for temporary use. For individual government sites which have not been designated for long-term use or not allocated or let out for temporary use, the LandsD may consider putting these sites to short-term greenery or community purposes through application.
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In general, STT is granted through open tender at full market rent. That said, if the proposed use of the STT is for non-profit-making purposes and policy support from the relevant Policy Bureau is obtained, the LandsD may consider directly granting the tenancy to the relevant organization for non-profit-making uses. Depending on if the relevant Policy Bureau's support is given, the LandsD may consider granting the STT at nominal rent, otherwise full market rent will be charged.
My reply to the various parts of the question is as follows:
(1) By ballpark estimation, at present there are approximately more than 600 effective STTs at nominal rent, the locations of which are throughout the territory. The uses of the relevant sites include school playgrounds, venues for sport activities or training, religious use, drug addiction treatment centres, Rehabus parking spaces, and so on. The bureaux/departments (B/Ds) concerned include the Education Bureau, Home Affairs Bureau, Home Affairs Department, Labour and Welfare Bureau, Narcotics Division of the Security Bureau, and so on. As a large number of STTs are involved, considerable manpower and time will be required to collate the relevant information. The LandsD is not able to provide the relevant detailed statistics as requested in this part of the question.
(2) The LandsD has implemented the five recommendations made in The Ombudsman's report published in May 2012 and has reported so to The Ombudsman. The details are as follows:
(i) A memorandum has been issued to all Secretaries of the Policy Bureaux stating their roles and responsibilities regarding the renewal of STTs at nominal rent, including confirming the tenant's identity and land uses, and giving policy support. In addition, during renewal, District Lands Offices (DLOs) will provide site inspection reports to the B/Ds concerned for their reference.
(ii) A sample proforma has been issued to all DLOs for forwarding to the B/Ds concerned when handling applications for or renewals of STTs at nominal rent. B/Ds are requested to clearly state in the proforma their decisions, reasons and background information for giving support as well as to 9618 LEGISLATIVE COUNCIL ─ 9 April 2014
confirm the information regarding, inter alia, the rank of officers giving the policy support.
(iii) Departmental guidelines have also been issued to all DLOs to implement the recommendation in the "supplementary guidelines" to inspect STT sites at nominal rent once every three years (additional inspections should be conducted in response to complaints, referrals or other factors of consideration), and the inspection reports are to be provided to the relevant B/Ds for reference when seeking their advice on whether they support the renewals of the relevant STTs at nominal rent.
(iv) Each DLO runs a system of District Review Board meetings co-ordinated by the District Lands Officer to regularly review the work regarding STTs. Through regular meetings and checking of the records of the computer system for STT management, both DLOs and LandsD Headquarters will monitor the dates of STT site inspections and follow up on situations where there is breach of tenancy terms by the tenants.
(v) In view of the recommendations of The Ombudsman, guidelines have been issued to DLOs stipulating the procedures and time limits for processing applications for regularization of breaches.
(3) In 2012 and 2013, the DLOs inspected respectively 256 and 162 STT sites granted at nominal rent and found respectively 30 and 12 cases in breach of tenancy terms, including building additional structures without authorization or occupying the adjoining Government land. Among the cases, seven have been rectified. The DLOs are taking action against 11 cases with a view to rectifying the problem of breach of tenancy terms, and also considering the regularization applications submitted by tenants in respect of the rest 24 cases. No STT has been terminated due to the breach of tenancy terms so far. As the computer system of the LandsD for STTs has been put into full operation since 2012, the Department does not have the statistics of cases of breach of tenancy terms before such year.
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Options on Future Fuel Mix for Electricity Generation
22. MR KENNETH LEUNG (in Chinese): President, with the release of a consultation paper on the future fuel mix for electricity generation last month, the Environment Bureau has launched a three-month public consultation on two fuel mix options. The first one is the "grid-purchase option", under which more electricity will be imported through purchasing electricity from the China Southern Power Grid Co. Limited (CSG). The second is the "local generation option", under which more natural gas will be used for local electricity generation. In this connection, will the Government inform this Council:
(1) whether the authorities had, before putting forth the "grid-purchase option" as a choice for consultation, collected statistics on the number of power supply incidents in the CSG in the past and looked into its fuel mix for electricity generation in order to assess the stability of its power grid as well as the impacts of purchasing electricity from the CSG on the regional environment; if they had, of the details and whether such information will be made available to the public;
(2) given that the grid-purchase option involves capital investments for installing cross-boundary transmission infrastructure and local back-up generating capacity, as well as possibly transportation and load management charges, whether the authorities have assessed the level of investments, the management charges and the service lives of the transmission infrastructure concerned; if they have, of the results;
(3) given that the local generation option involves capital investments for installing new power generation units, whether the authorities have assessed the level of investments as well as the service lives of the new power generation units concerned; if they have, of the results;
(4) whether it will consider, on the premises that the public approve of the increase in the share of nuclear power in the future fuel mix for electricity generation and that new power generation units will not 9620 LEGISLATIVE COUNCIL ─ 9 April 2014
be built, purchasing more electricity from Daya Bay Nuclear Power Station (DBNPS) for supply to Hong Kong;
(5) whether it will set any output target on the electricity generated by using renewable energy and by turning waste to energy; if it will, of the details; if not, the reasons for that; of the expenditure involved in, as well as the specific details of, the development of renewable energy by the Government in the past five years, and the quantity of electricity generated using renewable energy each year; and
(6) as an engineer has pointed out that for some reasons, the hydro-power stations in Yunnan Province opened up the spillway to dispose of the stored water instead of generating electricity, resulting in a loss of approximately 24 000GWh in the power generation output of the whole province last year, which is more than half of the whole-year electricity consumption (43 000GWh) of Hong Kong, and that in view of this, Hong Kong may consider purchasing from the Yunnan authorities the electricity generated at designated stations and transmitting it to Hong Kong through the CSG and paying to the CSG the charges on electricity transmission through its power grid, together with the additional investment expenditure on infrastructure, whether the authorities have considered if the proposal is feasible and studied the option of only purchasing the electricity from the Mainland power grid which is generated using renewable energy; if they have, of the details; if not, the reasons for that?
SECRETARY FOR THE ENVIRONMENT (in Chinese): President,
(1) The reliability of electricity supply hinges on adequacy of electricity at the supply source. We also need to ensure that the quality of electricity import in terms of frequency and voltage can be maintained at the prescribed level. After conducting preliminary assessments, the Government considers it technically feasible to import electricity from the Mainland. First, there is adequate power supply from the China Southern Power Grid (CSG). Based on the existing information, we estimate that our import required from the LEGISLATIVE COUNCIL ─ 9 April 2014 9621
CSG in 2023 would account for less than 2% of the total generation by the CSG in 2012. Also, Hong Kong should be able to benefit from the strong support provided by the CSG's entire power grid with multiple sources of supply under this grid-to-grid mode of electricity supply. Hong Kong may also retain local back-up generation capacity to cater for emergency.
We note there are concerns over the supply reliability of the CSG. However, it should be noted that the CSG is serving five provinces covering different areas including metropolitans as well as rural towns, which have different requirements on the reliability of electricity supply. Hence, it is not appropriate to make reference to an overall figure such as the total number of power supply incidents. We understand that Macao now imports electricity from the CSG to meet about 90% of its electricity need, and its supply reliability exceeds 99.999%, similar to the current level of Hong Kong. If a decision is finally taken to go for this option, detailed technical studies would be conducted to ensure supply reliability.
Regarding the impact on the regional environment by purchasing electricity from the CSG, our assessment is that importing electricity from the Mainland should not cause any notable increase in the overall emission in the Pearl River Delta region given that the estimated amount of electricity to be purchased would only account for less than 2% of the CSG's overall generation, that the share of clean energy in the CSG's current fuel mix (one third being renewable energy (RE)) is higher than that of Hong Kong, and that it is the national policy to further increase the use of clean energy.
(2) and (3)
In assessing the cost of the "grid purchase" option, we have taken into consideration the cost of purchasing electricity from the Mainland, the cost of relevant transmission infrastructure (such as submarine cable), as well as the cost of making available backup generating units locally. In assessing the cost of the "local generation" option, we have taken into account the price of natural gas and the cost of putting in place new gas generating units.
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Having regard to the above considerations and based on various assumptions, we estimate that the unit costs under both options will roughly double the unit generation cost over the past five years, and the price differential between the two options is not substantial. However, the actual generation costs would depend on a host of intervening factors that could only be ascertained at a later stage. For instance, the cost of electricity import would depend to a large extent on the cost of construction of cross-boundary transmission network and its alignment, which could only be ascertained after study and site survey. To avoid compromising Hong Kong's position in future negotiations over electricity import or natural gas prices, we consider it not appropriate to further disclose the details of the assessment on the relevant generation costs.
(4) Hong Kong has been importing on average 70% of the generation output of the DBNPS, and more than 90% during summer when electricity demand is at the peak. The rest of the output from DBNPS is being supplied to the Mainland power grid. Hence, we consider it not feasible to rely on importing more nuclear power from the existing facilities in DBNPS to meet the long-term electricity demand of Hong Kong.
(5) The generation of certain forms of RE requires natural resources, such as solar, wind and hydro power. However, the physical environment of Hong Kong has imposed a lot of constraints on the wide application of such RE resources. Not only is it costly but its room for development is also limited. Therefore, our current policy is to adopt solar or wind facilities for demonstration purpose, subject to their cost-effectiveness and meeting operational needs. On the other hand, waste-management facilities can also turn waste into RE. Hence, the Environment Bureau already covered in the "Hong Kong Blueprint for Sustainable Use of Resources 2013-2022" and "A Food Waste & Yard Waste Plan for Hong Kong 2014-2022" a number of waste-to-energy facilities including sludge treatment facility, integrated waste management facility, and a network of organic waste treatment facilities. With regard to the projects already completed and being planned, we estimate that the share of RE from waste will make up about 1% of total electricity demand by the early 2020s.
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From 2009 to 2013, the two power companies generated 1.1 million kWh, 1.4 million kWh, 1.6 million kWh, 1.9 million kWh and 1.9 million kWh electricity by RE, which constituted around 0.004% of their overall generation.
(6) We consider it not desirable to import hydro power directly from Yunnan by constructing dedicated transmission lines, as the construction of such long distance dedicated transmission lines will significantly increase the transmission costs. Also, its supply reliability depends on the availability of water resources; electricity supply will be affected in case of drought. Moreover, this "point-to-grid" mode of electricity supply lacks flexibility in catching up with rising electricity demand. We may need to identify new dedicated sources to meet long-term electricity demand. On the other hand, if not transmitted through dedicated lines, electricity on the grid could not be differentiated with reference to their energy types. Therefore, we consider it not practical to specify a particular source of electricity when purchasing from the power grid.
BILLS
Second Reading of Bills
Resumption of Second Reading Debate on Bills
PRESIDENT (in Cantonese): Bill. This Council now resumes the Second Reading debate on the Appropriation Bill 2014. At this meeting, the Council will proceed to a Member's motion to take note of Report No. 15/13-14 of the House Committee in relation to three items of subsidiary legislation after Members have spoken at the resumption of the Second Reading debate on the Bill. Under the Rules of Procedure, each Member may speak for up to 15 minutes. Before I suspend the meeting at about 10 pm tonight, more than 40 Members may speak on the Bill today.
At the meeting to be held next Wednesday, only public officers may speak before we proceed to the Committee stage on the Appropriation Bill 2014.
Members who wish to speak today will please press the "Request to speak" button.
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Appropriation Bill 2014
Resumption of debate on Second Reading which was moved on 26 February 2014
MR CHARLES PETER MOK (in Cantonese): President, following the international financial developments, Hong Kong, being an open economy, has experienced a number of "earthquakes" over the last two decades. Recently, a lot of media have started to report on and discuss the situation now faced by the Mainland economy, including the withdrawal of hot money, surging bad debts, and the freezing of the property market, expressing concerns about Hong Kong being adversely affected and even facing another financial tsunami. The economy and the people's livelihood in Hong Kong have become increasingly reliant on the Mainland since the reunification and as the current developments have indicated possible crises in the Mainland economy, it is imperative for Hong Kong to plan ahead and be vigilant and stop focusing only on homeland relationship in policies.
If Hong Kong continues to rely only on spending by visitors who travel to Hong Kong under the Individual Visit Scheme and suggesting no more than the development of shopping malls and hotels through reclamation or developing the entire Lantau Island while risks are escalating in the Mainland economy, should Hong Kong not develop more other high value-added industries to disperse the risks and mitigate the impact of weakened spending power once a credit crunch is effected on the Mainland? How will the Government make use of the existing fiscal reserves to improve the economy? This is a point that we absolutely must not lose sight of.
This Budget of the current-term Government has departed from the conservative style long adopted in the past as it proposes to increase quite considerably the recurrent expenditure on social welfare to assist people in the middle to low income groups. But on the other hand, the Financial Secretary told us that expenditure growth will outpace revenue growth 15 years down the line and as an ageing population will cause revenue growth to decelerate and expenditure to increase, a structural deficit may arise in the next seven to 10 years and it is necessary to set up a "Future Fund" to cope with the expenditure on welfare, infrastructure, and so on. However, can a sound financial position in Hong Kong in the medium to long term be guaranteed by this sole reliance on revenue?
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I believe society has reached a consensus on one point and that is, we cannot permanently rely on the land sale proceeds brought by the high land price policy to meet the Government's ever increasing recurrent expenditure on education, social welfare, and so on. The high land price policy has grave side-effects on housing and the cost of doing business. When a motion on the diversification of local industries was debated in this Council some time ago, Members all agreed that innovation and technology are the engines of the global economic development in the future, and it is indeed necessary to speed up the pace of using information and communication technology (ICT) to facilitate the restructuring and upgrading of various trades and industries.
Summing up the relevant measures proposed in this year's Budget, I would like to draw Members' attention to three areas, namely, the promotion of local ICT application and development, the support for innovation and technology, and measures on information technology (IT) education.
In respect of ICT industries, let us take a look at the number of times that "technology" is mentioned by the Government in this Budget. In the 2009-2010 Budget speech, the word "technology" was mentioned 24 times in total but the number kept falling in the several years afterwards and reached an all-time low last year as it was mentioned eight times only. However, the number has considerably rebounded this year as it was mentioned 26 times altogether. From one small clue one can see what is coming, so the number of times that this key word is used can be a reflection of the Government's mindset. I hope that the Government's support for the IT and innovative industries will not only be "handing out candies" which is just a flash in the pan; nor will it vanish into thin air one year after an undertaking is made, just as what happened to the "Hong Kong property for Hong Kong residents" policy. When it comes to investment in innovation and technology industries, it must be long-term investment and patience is required to enhance the competitiveness, rather than focusing only on short-term return.
I am very grateful to the Financial Secretary for attending an event in our industry yesterday ― the Internet Hall of Fame Induction Ceremony in which awards were presented to some 20 inductees from around the world. But these people have worked for three or four decades and are inducted to the Internet Hall of Fame only this year. In other words, the development of this industry really requires long-term support and long-term attention before success can be achieved.
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According to the Government's track records in providing support for innovation and technology, the Government tends to make a provision in a large amount of money without carefully considering the details of implementation and as a result, while the money may have been spent, no significant result can be achieved. The past Applied Research Fund is a case in point. With the management of the fund outsourced to the private sector, expensive management fees had to be paid. During the SARS outbreak, the Government introduced a scheme to provide support for small enterprises jointly with the industry. Under this scheme, funding was provided by the Government for computers to be sold at a low price to 2 000 small and medium enterprises (SMEs). The trade association that I had helped to set up also provided support to promote this scheme, but it was estimated that there were actually 130 000 SMEs eligible for the scheme and support could be provided to only 2 000 of them. We can see that these one-off measures, which may be well-intentioned though, cannot produce effective results precisely because of the lack of long-term measures as support.
This year's Budget has proposed 10-odd measures in respect of innovation and IT in response to the establishment of an Innovation and Technology Bureau proposed in the Policy Address a few months ago. While many of the measures are experimental in nature and their directions are correct, I sometimes think that they are still inadequate and hope that the Government can provide additional resources and stop making grand undertakings but producing little results. For example, the authorities have vowed to promote training on cloud computing among SMEs but we learnt only after putting questions to the authorities that a mere $3 million would be earmarked for the purpose. Other than organizing a few seminars and conducting some publicity, what else can be done? Another example is the proposal to earmark $50 million to support retailers on a matching grant basis for the use of IT. I hope that the scope of application can be widened and greater flexibility allowed in the terms and conditions, so that the SMEs can make use of this provision. After all the funds are exhausted, I hope that a further provision will be made to extend the scheme to other industries by drawing on the past experience.
The Budget has not specifically mentioned how large-scale IT enterprises can be attracted to invest in Hong Kong, which is vitally important to the creation of local quality brands to attract young people to take up jobs in the fields of innovation and technology. On the other hand, in respect of land planning, negotiation with the enterprises and provision of concessions, it often requires LEGISLATIVE COUNCIL ─ 9 April 2014 9627 government initiatives and facilitation. We must not repeat the mistake made some time ago which caused certain companies to give up their plans to set up data centres in Hong Kong.
On the other hand, the Government should create for the financial market a favourable environment for venture capital and technology enterprises to secure financing, thereby attracting more investors and funds to Hong Kong. As I said to Secretary Prof K C CHAN at a meeting previously, the policies on regulation and financial development must be kept abreast of the times. Stakeholders in the technology sector have expressly emphasized the need to improve the financing mechanism for business start-ups, revitalize the Growth Enterprise market, or look into other policies to help the so-called "micro enterprises" to secure funding, such as by way of the so-called "crowdfunding" which is very popular now. Changes to polices and legislation will be needed in order for these initiatives to be implemented. I hope that the Policy Bureau can study this with the regulatory authorities.
Second, in respect of the support for innovation and technology, the Government plans to provide universities with $24 million through the Innovation and Technology Fund (ITF). The objective is to subsidize students and teachers to conduct researches on team-based businesses or to commercialize their research and development (R&D) results. I think this is a very good attempt, for it can at least enable a small group of teachers and students with good ideas to try to create a better ecological system. Having said that, I hope that the Government and the universities will set targets of moderate standards because starting a business is not a process that can be pre-planned. If a project is required to meet a certain standard or record a profit in two or three years in order to be eligible for application, similar to the requirement of some general subsidy schemes, it may probably inhibit many creative ideas from being brought into play. The most important point is the learning process, which includes even the process of failure, for many entrepreneurs became successful only after experiencing failures.
In respect of the industries, the ITF will set up an Enterprise Support Scheme (ESS) this year to replace the original Small Entrepreneur Research Assistance Programme (SERAP) while increasing the funding ceiling to $10 million and removing the restriction on the scale of companies and the requirement of partial repayment of the funds. I support these changes, and I think the new scheme will encourage more medium enterprises to undertake 9628 LEGISLATIVE COUNCIL ─ 9 April 2014
R&D projects. However, the SERAP is still open for applications and as the new ESS, which offers better conditions, has yet been launched, some companies may prefer to wait and submit their applications after the new scheme is launched. Therefore, it is necessary to make better bridging arrangements and I hope that the new ESS can be launched early.
I hope that the Government will respond to the aspirations in society and provide additional tax concessions for expenditure on R&D. Singapore has been very aggressive in that on top of the 400% tax deduction, enterprises are further allowed to choose to receive a matching cash rebate based on their R&D expenditure. I hope the Government can consider providing more tax concessions to support innovation.
On the education front, the support for innovation and technology development will rely on the next generation. However, the IT education in Hong Kong has reached a state where it is imperative for us to act promptly to recover lost ground. The Government plans to provide "elite classes" in secondary schools with outstanding performance in IT education in order to enrich the curriculum of these schools. But as we can see, the number of senior secondary students taking the ICT subject has been dropping substantially. While the recourse to "elite classes" to train professional talents is worth trying and will help improve the image, the Government must start from basic education in order to resolve the shortage of talents in the industry in the long term, rather than just redeploying resources to schools which have already performed well in this respect. It is imperative for us to improve the IT handling capability of students overall.
Whenever we put questions to the Secretary for Education in any aspect, whether in relation to Wi-Fi or matters in other areas, he will always give this answer: The Fourth Strategy on Information Technology in Education to be released later will provide answers. We have also asked the Education Bureau about the provision of Wi-Fi in all public and subsidized schools in the territory and he has all along refused to tell us how many years it will take to complete the project. What we are talking about here is a project involving only 1 000-odd schools in Hong Kong. We hope that it can be completed within three years from now, or else how much longer do students have to wait? Many good programmes and learning resources, such as e-books, cannot be put to good use.
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So far, the Government has only introduced a pilot scheme to be implemented in 100 schools, but we found that many of these schools are schools with outstanding performance in IT education or schools under the Direct Subsidy Scheme, whereas those schools which are genuinely in need may not necessarily be provided with support. Why does the Education Bureau only like to gild the lily, refusing to prescribe the right medicine to cure the problem at root? I hope that the Government will announce the details of this scheme targeting 100 schools, including how the schools will spend the subsidies received by them because providing a Wi-Fi network is not the end of it. What will they do in respect of application or maintenance or other arrangements? Will there be a waste of public funds? How can they do better?
As for the other issues of concern to the education sector, such as setting out the professional qualifications of ICT teachers, provision of more resources for employing IT co-ordinators, abolishing the ICT subject and arranging for this subject to be taught by teachers of other subjects, and so on, all these will affect the implementation of e-learning and even the overall education in schools, but we are often not given any answer. As IT application has become increasingly important, the Composite IT Grant has been maintained at around $300 million in the past three years, but given that the Government encourages schools to handle their IT facilities by hire of services, is there a need to review the level of the Grant?
Lastly, I would like to talk about the work of the Government in respect of "apps" and open data. I am glad that the Financial Secretary uploaded the Budget in digital format ― or the so-called machine readable format ― onto the website the day he delivered his Budget speech to facilitate public analysis of the data in the Budget. I hope that the authorities will keep up with their efforts and do more in the future.
Moreover, as Members can see from my questions to the departments, I have requested some more information, such as what other information can be made available now. The Government's reply is that all the information has been uploaded onto the "data.one" website. But what I wish to know is what else has not yet been uploaded onto the website and when they will be uploaded. Many departments do not have a good understanding of the meaning of open data; nor do they attach much importance to the format of the papers, thinking that they have completed their job by uploading the information in PDF files. It seems that the OGCIO still has a lot to do in education.
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Furthermore, speaking of the role of the OGCIO in providing education to other government departments, I have asked the Government how many computers there are in the Government which are still running on the Windows XP system ― Members who have read the news report must know that Microsoft has terminated support services for this system from 8 April onwards. We actually knew this a long time ago and the OGCIO has also issued guidelines long since. But why is it that according to the Government, 30% of the computers still have not undergone system upgrading? We understand that the OGCIO has provided guidance, but it seems to be not effective at all. Did the other departments comply with the guidelines? This has reflected the difficulties faced by the Government in promoting this policy and IT. The Financial Secretary, who is inside the Government's administrative structure, must indeed think up more ways to enhance the efficiency of various departments.
Lastly, I would like to talk about the papers on innovation and technology which had yet been published last night, and we expect them to be ready for our discussion in the panel next week. We have all along advocated that technology is not merely a means to develop the economy, but also a tool to promote the freedom of information and facilitate the development of innovation culture in society. I hope that the Government can provide more resources for the conduct of researches on the policies on technology, instead of only following the path of the last two decades, going around in circles and wasting both time and efforts. Moreover, I also hope that the Government will make improvements in various aspects, including the use of open data and applications. It should not only aim at developing applications which nevertheless turn out to be used by only a small number of people.
Thank you, President. I so submit.
MR SIN CHUNG-KAI (in Cantonese): President, the Democratic Party thinks that this Budget is entirely devoid of any pleasant surprise. It is another routine piece of work that just sticks to the same old rut. The Financial Secretary still holds the mentality of a miser. The Government has got fiscal reserves amounting to $745.9 billion but it turns a blind eye to the long-term and structural problems in Hong Kong, lacking any long-term commitment to education, healthcare, housing and such like issues which require planning. All in all, it is a failure to answer public aspirations.
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As a matter of fact, the Financial Secretary has presented seven Budgets ever since he assumed office in July 2007. One-off relief measures that can be called "candies" have used a total of $210 billion. But they do not reflect any vision on the long-term needs of Hong Kong. If the Government can use this sum of $210 billion well, to make social investments such as setting up a seed fund worth $50 billion to take forward retirement protection, it may have a greater effect than "handing out candies". And what is more, there will be no need to think of using a "future fund" now to prepare for any rainy day ahead.
Also, we think that the Government should not set up any rigid indicator that public spending must never exceed 20% of the GDP. At the time when Mr John TSANG assumed the office of the Financial Secretary in 2007, the fiscal reserves were about $360 billion. Now the amount has reached $745.9 billion, double the previous amount and equivalent to 21 months of government expenditure. While the fiscal reserves continue to accumulate, the Government refuses to use public money to solve problems confronting the grassroots and the middle class. The officials at the top are rich while the people below are poor. The citizens are unable to share the benefits brought about by this huge amount of reserves. Is this a correct way of public finance management? It is the view of the Democratic Party that it would suffice if the amount of fiscal reserves is equivalent to 12 months of government expenditure. Recurrent expenditure should be increased to solve problems like population ageing in the long run.
We consider that tax concessions offered cannot catch up with inflation. These tax concessions can well be said to be a drop in the vast ocean. Although measures like increasing the dependant parent allowance, tax rebate for salaries tax and profits tax are proposed, they are completely offset by inflation over the last few years. The Government has not increased the basic personal allowance and dependant parents' allowance in line with inflation. Those in the middle class therefore have to bear with inflation year on year, while their tax burden has never been reduced. So they are very disappointed. To the middle class, the Financial Secretary has again failed to deliver.
The Government has evaded talking about the proposal made by the Democratic Party to improve the tax regime. We demand that a fairer tax regime be set up by broadening the taxable income amount for the first three tax bands from $40,000 to $50,000, abolishing the standard rate and charging tax at the marginal tax rates capped at 17%. For profits tax, a two-tier regime should 9632 LEGISLATIVE COUNCIL ─ 9 April 2014 be introduced so that large corporations should bear greater liability while the SMEs can have a chance to develop their business because tax rates are lowered.
The idea to "hand out fewer candies" also lacks focus. About proposals made in the Budget to offer fewer sweeteners, the primary consideration should be to undertake long-term planning, including the retirement protection system and healthcare insurance scheme. But no mention is made of these in the Budget. Therefore, even if there will be a drop in surplus, there are still $745.9 billion of fiscal reserves. Can the Government maintain the same level of relief measures as in the past?
The waiver of rent for public housing tenants is changed from two months as in last year to one month this year. This will add to the burden of the grassroots under inflation. When the concession for government rates is cut across the board by half as compared to that of last year, we asked in the subcommittee whether the concession can be changed from two quarters to four quarters. But the Government refused. With respect to relief measures, can more consideration be given to the grassroots? The Government should use resources where they are due and it should set up a grading system for concessions in rates according to different levels of rateable value. We hope that the Government can accept the recommendation made by the subcommittee.
With respect to the Working Group on Long-term Fiscal Planning set up by the Government and which will issue reports on the subject, it will conduct a systematic examination of the future financial needs of Hong Kong so that public spending can be sustainable. We welcome this. Members of the Working Group include many experts, scholars, accounting professionals, and so on, such as Prof Francis LUI, Prof LIU Pak-wai, and so on. They are economists whom I respect highly. Having said all these, I would think that this Working Group has come four or five years late. During the past seven years, the Government has handed out $210 billion. Of course, the Financial Secretary was right when he said that this would have an effect of revitalizing the economy. But if the money is used to plan for the future and do a good job in social investment, especially with respect to problems like population ageing, we think that the pressure posed by a structural fiscal deficit in future will decrease as a result. If we are to save money, the earlier we do this will be the better. In the past few years we have had a huge surplus. But the Government did not made any good preparation but handed out money instead. Now the amount of surplus decreases and the Government begins to think about how savings can be made. LEGISLATIVE COUNCIL ─ 9 April 2014 9633
The Basic Law stipulates that budgets should be compiled by adhering to the principle of "keeping expenditure within the limits of revenues". But this may have dampened the wish of the Government to explore new sources of revenue.
The grassroots are most concerned about the possibility that the Government may use the report of the Working Group as a pretext for not increasing services which the grassroots think badly need improvement. This is because the implication of this principle of "keeping expenditure within the limits of revenues" is that there can be no increase in tax. When there can be no increase in government revenue means that future demand will have to be suppressed if the problem of structural fiscal deficit is to be addressed. In fact, what the Government needs to do is to examine how best services needed by the grassroots can be improved. Instead of talking about financial matters of the future, we should talk about future demand. In the report of the Working Group, the Government does not quantify future needs or the service needs in terms of education, healthcare, population ageing, and so on.
The first and foremost question to be considered by the Working Group is future demand and that means what the greatest challenges for Hong Kong in future are. The foreseeable problem of population ageing will be the greatest challenge for Hong Kong. Then there are challenges in areas like healthcare, care for the elderly, and so on. Examples of these are the number of hospital beds, and the waiting time for applicants for places in care and attention homes for the elderly. All these problems require urgent attention and solution, and we cannot afford to let the applicants for care and attention homes die before they are allocated a place. In the report of the Working Group, no effort is made to assess this kind of demand other than saying when a structural deficit will appear if service is to increase by 1% or 2%. If the focus of work of this Working Group is not on predicting future demand, I think that this will be a great defect. The Financial Secretary should urge Policy Bureaux to carry out an assessment on future demand and from such assessments, it can be learnt how much spending in the budget each year will have to be increased before this future demand can be met.
The report of the Working Group is based on projections of economic growth in different scenarios and a number of assumptions on government income and expenditure. First, I would like to talk about the fact that the assumptions on the economic outlook as made in the report are quite gloomy. It is predicted in the report that the average annual growth in GDP is 2.8%. But 9634 LEGISLATIVE COUNCIL ─ 9 April 2014 this prediction of a 2.8% growth in the economy has neglected factors like Hong Kong being an important window for China in its relations with foreign countries and the benefits brought about by the further integration of Hong Kong with the economies of the Pearl River Delta and Macao. Therefore, the higher growth scenario as depicted in the Working Group report should be considered as the standard scenario, and that is, 3.3%. With this new assumption on the economic background, as pointed out in the report summary, there will be no structural deficit for Hong Kong in this scenario. And this assumption in scenario also shows that Hong Kong will benefit from the factor of economic integration in the region.
Despite this piece of criticism I have just made, still I have to commend the job done by the Working Group. We think the Financial Secretary should make the Working Group permanent. The Financial Secretary has made a medium-range forecast in the Budget in which it is stated that the problem of population ageing will exert fiscal pressure on the Government long term. In my opinion, the Financial Secretary should make the nature of the work done by the Working Group permanent, such as even if a forecast is not made every year, it should be made every two or three years, or five years at the longest. This will be a tool on top of the medium-range forecast that can help maintain the financial sustainability of Hong Kong in the Financial Secretary's compilation of the Budget.
We consider that the first and foremost task of the Government is to draw down the fiscal reserves to improve the people's living. It should not only go after economic growth to the disregard of everything. This is because even the building or demolition of a bridge will both bring in growth in GDP, but in the end it will return to square one. It follows that improving the people's livelihood is most desirable. We must strive to predict the demand brought about by population ageing in the next 10 or 15 years and how much increase in spending this means for the Government. We think that the Government should quantify future demands in the report of the Working Group, including demands in education, healthcare and elderly services. If the Government can make a comparison between the actual future demand in these major policy areas, make a long-term projection and assess the long-term financial implications, I am sure the report of the Working Group will offer more foresight and reference value.
The Government has made a very good suggestion in the Budget, namely a "Future Fund". I agree that we should plan for the future when our fiscal reserves are abundant. This "Future Fund" is a belated winter, not spring. It is LEGISLATIVE COUNCIL ─ 9 April 2014 9635 not a new concept either. In fact, as early as in 2007 the Democratic Party already suggested the idea of a reserve fund for the elderly population. The idea is to set aside $50 from the surplus as a start-up fund and account half of the return from the Exchange Fund each year as the recurrent income for the fund. Based on the experience of surplus accumulated in the Exchange Fund, a period of about 10 years will be required to accumulate a considerable sum of money. By that time the fund can be activated to partly meet the expenses in healthcare and social welfare brought about by population ageing. Now in retrospect, while we put forward this suggestion seven years ago, the Government has been giving away candies to buy its popularity. In so doing the Government has missed the golden opportunity to plan ahead to cope with the problem of population ageing. This is why the "Future Fund" proposed by the Government now can be said to be a belated winter. As government surplus may decrease in future, will the attempt to save money now be impractical?
The Financial Secretary did not talk at length in the Budget on how problems related to the people's living can be solved. When the Government plans to set up a "Future Fund", it should inject more resources into healthcare, education and such like areas to cope with the problem of changes in the demographic structure. I cannot help but ask the Financial Secretary, when we have solved the problems of a structural fiscal deficit and a fiscal cliff, will we not be creating another cliff of problems in healthcare and population ageing?
President, the duty of the Financial Secretary is not only to ensure a balance in income and expenditure but more importantly, to urge the Policy Bureaux to make projections of future demands, make good use of the fiscal reserves so that our public financial commitment can remain sustainable in the light of the mid- and long-term development of Hong Kong, especially against a background of the rapid ageing of our population in the next 20 to 30 years. President, in sum, this report of the Working Group is a good report separate from the Budget, but it carries the defect of not having made any sound and long-term planning to incorporate all the major policy areas related to people's living like social welfare, healthcare, and so on, such that an objective assessment is made on future demands. This report by the Working Group offers reference value but the Government should not only pay attention to this report but also make good preparations to meet demands in the future.
I so submit.
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MS EMILY LAU (in Cantonese): President, the proposals put forth by the Democratic Party on the Budget have been set out in detail by Mr SIN Chung-kai just now. I believe the President may have noticed that these proposals are not proposed by the Democratic Party alone, for the several dozens of proposals for the medium-to-long term are put forth by Members of the democratic camp jointly. Unfortunately, many of these proposals have not been accepted.
President, in the fifth paragraph of the Budget speech, the Secretary pointed out that: "Last month, the Chief Executive delivered a wide ranging Policy Address with over 160 measures benefiting a broad spectrum of the community. The additional expenditure involved is $25 billion." He said he would ensure that "financial resources are adequate to fully support the early launch of the relevant initiatives to meet the aspirations of the public." It is definitely good if the Secretary can achieve that, for we know that grievances in society have come to a head for some time, and public outcries have arisen on various fronts, including those relating to the most fundamental facilities, education, medical, housing and transport. Why was it necessary for the Secretary to make such an early declaration? That should be attributed to the rumour doing the rounds in the community about the Financial Secretary and the Chief Executive being on less than friendly terms and holding different views. For this reason, the Financial Secretary has made such declaration.
Yet, in the Budget, the Financial Secretary has also mentioned the report of the Working Group on Long-Term Fiscal Planning which Mr SIN has mentioned earlier. In the Executive Summary of report there is this remark which is music to the Government's ear, that is, "to keep the public expenditure at or around 20% of the GDP." We have been hearing this remark for many years. However, members from the democratic camp, and even the Democratic Party, have voiced opposition to this for many years on the grounds that the public expenditure of many of our trading partners or other regions exceeds the level of 20% of the GDP. No one is urging the Government to adopt welfarism to make a commitment to public expenditure exceeding 40% of the GDP, but 20% is really too low. Perhaps they want to be on par with their favorite country, Singapore.
Besides, the Government is fond of commissioning people to say what it wants to hear. We have already experienced the skillfulness of these consultants, with the exception of Ms Jenny NG. In the same paragraph of the Executive Summary, it is pointed out that "In practical terms, it should entail a LEGISLATIVE COUNCIL ─ 9 April 2014 9637 much smaller year-on-year growth rate than that in recent years; it would imply a lower or even negative real growth through cutting back existing services, and offsetting extraordinary expenditure growth in one policy area group by reducing within or in other areas." It is said on the one hand that support will be given to the proposals of LEUNG Chun-ying, but on the other, it requested a cut in expenditure. No wonder people often criticize government officials for having four, five, six, seven and even eight mouths. At issue is that such an approach of handling can hardly convince the public that the Financial Secretary or the Chief Executive truly understands their needs and will render support in terms of expenditure and policy.
Moreover, as Mr SIN mentioned earlier, the Financial Secretary pointed out in the 143rd paragraph that the fiscal reserves currently stood at over $700 billion. Yet, more often than not, the Financial Secretary is unwilling to mention that the $700-odd billion accumulated surplus in addition. If Joseph YAM were still the Chief Executive of the Hong Kong Monetary Authority right now, he would have told Members of the Legislative Council and the general public that these funds are debt-free. The Financial Secretary added in his speech that in the fiscal reserves, $220 billion was the balance of the Land Fund, I wonder what he was suggesting, and $130 billion was held in various funds with designated uses. He reminded us again that at least $300-odd billion had to be set aside for the retirement of civil servants, making preparations for their future. It is good that the Government is kind to them. Regrettably, several million of people are left with no support for their future now. Even after deducting the abovementioned funds, the Government still has close to $1,000 billion as surplus.
On the one hand, the Government says that expenditure should not be increased for the financial support is inadequate, yet recently, it often says that increasing tax will be difficult. I have contacted many professionals in the business sector and general public in various sectors, and they all agree that "money should be spent when necessary". However, the authorities do not act this way. Instead, it chooses to be a skinflint, leaving the public to continue to dwell in "match-box" rooms and crammed in crowded and stuffy modes of transport. As for the quality of education, it is utterly ridiculous. Dr Helena WONG will speak on the issue later, bringing up the concern that the ratio of Mainland students greatly outweighs that of local students among the existing university student population.
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Moreover, recently, the Government has published the report of the Task Force on Manpower Development of the Retail Industry that carries a table on unemployment rate by age group which is worthy of examination. President, do you know the unemployment rate of the age group of 15 to 19? It is 14.1%. The unemployment rate of the age group of 20 to 24 is 10%. The unemployment rate of other age groups is normal, which is about 3% or so as is usually mentioned. Why are so many young people unemployed or not taking up employment? Some people attribute this to their preference to be "socially-withdrawn men", "socially-withdrawn women" or "Train Man". Why would it be so? Many employers have complained about the frustration caused by their young employees. Recently, I have had a similar experience. The employee had failed to report duty, and when I rang him up to enquire about the reason for his absence, he responded indifferently and hang up immediately. Why can the education system not nurture young people better, so that they can improve their lot and pursue their dream, just as the impressive remarks made in the Budget? Why can this not be achieved?
Furthermore, over the years, the policies adopted by the authorities have been economy-oriented, requiring people to serve the economy. By the same token, the Budget this year is also focused on "competitiveness". I do not oppose this from a certain perspective, yet we still have to be people-oriented. As such, even Prof Nelson CHOW made the criticism that there is a big problem with the population policy report of the authorities, for all issues are not considered from the perspective of the people but that of the economy, where people are required to make adjustments to achieve the purpose of making money. Even if it is possible to make money, there is the downside that most of the money will not be pocketed by the general public. Why are a million or so people still living in poverty? What is wrong with our system?
For this reason, we propose that public expenditure definitely should not be capped at 20% of the GDP. Additional funds can only be secured when the authorities try to waive this golden rule. On housing, we surely hope that Secretary Prof Anthony CHEUNG will make improvements, yet he has no other alternatives, for the authorities have not granted any site. Recently, I am handling the mandatory relocation of residents of Chuk Yuen Village in Ta Kwu Ling as a result of land resumption. I then found out that no housing arrangement had been made for them. I asked the Deputy Permanent Secretary just now whether these residents were expected to sleep on the streets. The LEGISLATIVE COUNCIL ─ 9 April 2014 9639 authorities should make better effort to build up greater political force to unite the community, so that residents will support the policies of the authorities. By then, when the proposals are implemented, things will be taken forward smoothly.
As for environmental protection, it is the aspiration of all. Regarding the proposal on "Extension of three landfills and construction of one incinerator" ("three landfills and one incinerator"), I did ask Secretary WONG Kam-sing at the meeting of the Finance Committee that day whether he knew many residents had strong views about the proposal. In fact, the Democratic Party does not oppose the proposal. We hope that even if the authorities may not secure the agreement of 100% of the residents, it may convince more residents to accept the proposal before implementing it. This will be more desirable. I did point out to the Secretary that many places offer compensation or remedial measures in introducing these notoriously obnoxious facilities. This is not complicated indeed. It may only involve the provision of various facilities like swimming pools, parks, community halls, libraries, and so on. The Secretary said that these facilities were offered in Tuen Mun in the past, and the Democratic Party had given its support back then. However, when I asked about the arrangement for the present proposal on "three landfills and one incinerator", he said that rehabilitation might be carried out at some of these landfills and the sites after rehabilitation might be used for various purposes, and they planned to work in this direction.
However, these are mere plans. Certainly, it is because there is no money, for the Budget has not mentioned these plans. President, you know how efficient the authorities are. The process that involves mooting and making of plans, submission of proposals to the panels of the Legislative Council and application for funding from the Finance Committee for the construction works will be extremely long. President, the construction works may not be completed even when your grandson has grown up. The Secretary said that these would not be a matter of concern, the primary concern was to accept the "three landfills and one incinerator" proposal. How can we handle the issue in such a manner? If the Secretary has the intention of implementing compensation measures, his bundling approach should not only be applicable to the "three landfills and one incinerator" proposal but should also include a proposal for compensation measures. He can then urge the public to be understanding and implore them to support the proposal by stating that desirable compensation not available to other districts will be provided. Can the authorities do so? Hence, I am angry about the incompetence of the authorities, and we are just trying to help.
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President, the Democratic Party will join the Liberal Party in going to the Hospital Authority (HA) tomorrow to request the recruitment of additional medical officers. I did mention to the Secretary and the HA at the meeting of the Finance Committee the present shortage of doctors in public hospitals, causing some members of the public unable to get the first consultation appointment despite a two-year wait. The authorities said that there were 300 vacancies for doctors currently. Despite the scheme to allow overseas doctors to apply for practice in Hong Kong and the receipt of over 100 applications, only a dozen of doctors have been employed in the end. What is actually happening? If the authorities are incapable of handling this, let us help and see whether we will suffer ― no, the public will be the one to suffer.
Another point which has filled the public with deep anger is about tourism. Secretary Gregory SO is not in the Chamber, yet he seemed to gain a moment of enlightenment recently and noticed the problems with the local tourism. In the Budget, the Financial Secretary mentioned that tourism has been making immense contribution to Hong Kong. This we all know. But when it comes to the concern about an excessive number of tourists, it is a totally different matter. Last year, the number of tourists reached 50 million passenger trips. People in Hong Kong and overseas are all astonished. Since Hong Kong has a population of only 7 million people, how can it accommodate 50 million passenger trips? In a report released early this year, the Secretary said that Hong Kong could cope with the surge. Yet, later, even Beijing officials said that Hong Kong could not cope with it and instructed the Hong Kong and Macao Affairs Office to investigate and handle the case. How shameful it is to Hong Kong? Why is the Government incapable of handling minor issues like this? Later, LEUNG Chun-ying changed his attitude and said that he would need to communicate with the Central Authorities. Secretary Gregory SO also changed his tone. How can the Government effect administration in such a manner? How can it make the public convinced?
I had once requested Secretary Prof Anthony CHEUNG to take the MTR personally, yet he said it was not too crowded after he had tried a trip. I want to tell him that residents here want him to inspect the MTR Station at Admiralty every day and see how crowded it is. Accommodation is poor here, and some people say that their dwelling place is just of the size of a coffin. Hong Kong is one of the wealthiest city in Asia and the world, why can the authorities fail to provide assistance to the public in meeting these basic needs?
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President, the Chief Executive definitely should take the blame for the poor administration. However, recently, some members of the public and even senior government officials have complained to me that one of the persons who should bear the largest share of the blame is the Director of the Chief Executive's Office, Edward YAU, who is earning a salary of $3.4 million per annum. Some people tell me that he is influential in the Government, and no one knows why even LEUNG Chun-ying heeds all his advice. Many issues have been brought to this pass because of him. We are outsiders, and government officials know better. We hope that all government officials will provide opportunities for the public to contact the Government and express their views instead of posing obstacles like a "tiger blocking the road" as Fanny LAW described. Moreover, they should iron out various issues, including facilitating their co-operation with Members, but not imposing hurdles.
Talking about the Chief Executive, we cannot skip the Executive Council. We asked about the attendance of Members of the Executive Council at the Legislative Council. I believe the reply must be drafted with the assistance of Edward YAU, for it was said that no statistics were kept, yet a comprehensive record was kept to jot down which Members had attended and which Members were required to abstain from the meeting, for many conflicts of interests are involved. These Members of the Executive Council, who are earning an annual salary of some $800,000, with that of the Convenor amounting to $1.3 million, could not even submit their attendance record to the Legislative Council. Can Members believe that? As such, I asked the Permanent Secretary, Ms Alice LAU, at the instance to follow up the issue after the meeting and upload all the information on attendance onto the website. It is indeed a most basic requirement.
In the case of licensing involving Ricky WONG, the reasons for the Executive Council refusing to issue three licences seemed to be a case of black-box operation. Unexpectedly, the attendance record of Members is also a case of black-box operation. As the saying goes, one tiny clue reveals what is coming. If the Government continues to go on the wrong track, allowing certain people to manipulate the scene and failing to make deep reflection, I think the Occupy Central movement and protest of all kinds will continue to break out.
I so submit.
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DR HELENA WONG (in Cantonese): President, I would like to focus on matters in areas relating to education, women, food and health.
Although the theme of the 2014 Budget is to enhance competitiveness, it is a great pity that the Budget lacks long-term planning for and financial commitment to education which is crucial to enhancing manpower resources in Hong Kong. With regard to investment in education in recent years, the Government is inclined to providing additional resources by way of a lump sum grant or the setting up of a fund. However, these short-term and unstable resources precisely reflect the complete lack of sincerity on the part of the Government in undertaking long-term planning.
The proportion of recurrent expenditure on education committed by the LEUNG Chun-ying Administration as a share of recurrent public expenditure has been dropping over the past two years, from 21.8% in 2012 to 21.1% in 2013, and even further to 20.7% in 2014. Does this reflect the Government's disregard for long-term planning and the injection of resources? Let us look at many of the advanced countries around the world, such as the United Kingdom, the United States, France, and so on. The proportion of education expenditure to their Gross Domestic Product (GDP) is approximately 5%. In some countries in Europe and the United States, the proportion is even close to 8%. According to the information provided by the Organisation for Economic Co-operation and Development, the proportion of the average public education expenditure to the GDP of its members was 6.3% in 2010, whereas the average of the developed countries among G20 reached 4.6%. We can thus see that the proportions of developing and advanced countries are somewhere between 4.6%, 6% and 8%. So, how many resources has the Financial Secretary in Hong Kong injected? In Hong Kong, a renowned World City, recurrent education expenditure accounts for a mere 3.03% of our GDP in 2014. President, being a member of the education sector, I really feel ashamed on seeing this situation in Hong Kong. After collecting tax from taxpayers, why does the Government spend so little on education, thus obliging so many parents to support their children in pursuing associate degree programmes on a self-financing basis?
President, I have actually repeatedly asked in a number of meetings a question concerning whether or not the precious education resources in Hong Kong are devoted to the children of local taxpayers, which is also a concern to the public. We can see from the information provided by the Education Bureau to this Council that an alarm has already been sounded in the proportion of local LEGISLATIVE COUNCIL ─ 9 April 2014 9643 students pursuing publicly-funded postgraduate or research programmes because there is no quota on the number of non-local students enrolled under the policy in recent years. This means that local students as well as students from the Mainland and other parts of the world may receive funding and are welcome to study in graduate schools in Hong Kong. Why would the Hong Kong Government foot the bills for these students?
Students pursuing Master of Philosophy or Doctor of Philosophy programmes in Hong Kong are currently receiving full level of subsidy. However, more than 75% of the students enrolled are not local students. Why have we come to this pass? At present, there are only 1 551 local students pursuing research programmes. Why do we inject so much money into subsidizing non-local students instead of injecting more money to subsidize local university students? President, although this question has been discussed in this Council and the Panel on Education on a number of occasions, I have not yet heard a good answer. The Government has merely responded that selection would be merit-based. So, does it mean that we have to foot the bills for academically strong students from all over the world who choose to come to Hong Kong for studies? Why do they enjoy such a great advantage? Are we very rich? If the answer is in the affirmative, why do we devote a mere 3% or so of our resources to local education? The opportunities for local students pursuing education and receiving publicly-funded education are thus sacrificed. I find this a most irresponsible practice.
If we have education resources, I very much hope that the Government can accord priority to spending them on local students. A lot of efforts can be made. As the Secretary for Education is not present today, I would like to ask the Financial Secretary to help look into the matter. We need to increase education expenditure in Hong Kong to a level which is at least not worse than that in a developing country. Can the proportion of total education expenditure be set at 4.5% of our GDP? Are we really incapable of raising the level by 1.5%? We should at least catch up with the level of a developing country. In the long term, the Democratic Party earnestly hopes that we can catch up with the level of a developed country, that is, 6.3% of our GDP.
Furthermore, if such resources can really be increased, I very much hope that the Government can use them to provide funding for whole-day and long whole-day kindergartens, and expedite the provision of 15-year free education by 9644 LEGISLATIVE COUNCIL ─ 9 April 2014 all means to prevent chaos such as that experienced by a kindergarten in Tin Shui Wai ― as it is unable to rent premises to run the kindergarten, parents and students do not know what to do. Can the Government make better planning for kindergartens to expedite the implementation of plans?
Furthermore, can efforts be made to address the state of instability faced by schools due to the decline in the intake of secondary students as a result of the dwindling population? Although the Education Bureau has vowed not to cull schools but retain teachers, schools and their strength, principals still come to this Council to seek assistance from Members, saying that they are unable to deal with the situation as many schools will have to close very soon. I hope the allocation of school places can be fine-tuned. Can the authorities step up their effort in progressively reducing the number of students allocated to each class in schools to enable the transition of schools amid challenges resulting from the declining population in the next few years? Is the Government willing to hear the views of the schools?
Furthermore, if we have more education resources, should we accord priority to supporting integrated education and students with special education needs? As we have heard the aspirations of many parents, we very much hope that the Government can respond to them vigorously.
Certainly, I am greatly concerned about the shortage of subsidized university places as I teach in a university. The number of students meeting the university admission requirements is 25 000 to 26 000 per annum, but only 16 000 subsidized university places are offered. As a result, the remaining 10 000 students have to spend more money on pursuing associate degree programmes or self-financed degree programmes, with the annual tuition fees ranging from $50,000 to $110,000. Although their parents are taxpayers, why do they have to pay $100,000 to $110,000 for admission to private institutions even though they meet the university admission requirements? Moreover, these private institutions vary in quality and lack regulation. President, there are indeed too many problems with education. I earnestly hope that the Government can make changes to the Budget and relevant policies.
Next, I would also like to say a few words about food and health. As its name suggests, the Cheung Sha Wan Temporary Wholesale Poultry Market should be a temporary venue that should not be maintained for an exceedingly long period of time. However, it has existed as a temporary market for four LEGISLATIVE COUNCIL ─ 9 April 2014 9645 decades. President, is there any other temporary premises which has existed on a temporary basis for four decades? So far, no decision has been made as to when this temporary wholesale poultry market for live chicken will be relocated. Why has it turned into a permanent temporary market?
Although Secretary Dr KO Wing-man has once stated that he will endeavour to identify land expeditiously, he has no confidence in achieving this target, and he is now looking at us helplessly. President, I really hope that the Government can expedite its effort in identifying land, allocating funds and relocating the Cheung Sha Wan Temporary Wholesale Poultry Market expeditiously because it is situated at the heart of the downtown area. Although the area might be quite remote in the past, it is now surrounded by densely populated buildings, and the wholesale live chicken market is just situated across the street. Not only are there live chicken raised locally in Hong Kong, but there are also live chicken from the Mainland. With the outbreak of avian flu from time to time, people have become jittery and sleepless every winter. Not only are the residents very furious, the Sham Shui Po District Council has also urged the Government to relocate this temporary wholesale market expeditiously. Nevertheless, there is absolutely no sign of the Government doing this.
Many people are angry about the provision of columbarium in Hong Kong. I wonder if people making grave-sweeping visits during the Ching Ming Festival have thought about the television scenes of many people making grave-sweeping visits to some coffin shops in Hung Hom. How can they make grave-sweeping visits there? Not only are there no tombstones, but cremains are still kept in a bag inside a plastic box. People simply have no idea how to go about burning paper offerings. Why do they have to keep their ancestors' cremains in the coffin shops and pay tribute to a plastic box amid confusions during the Ching Ming Festival? It is because there is no public columbarium. Some people say that they are still waiting despite having waited for four years. I believe there will still be no public columbarium when all of us have passed away because the Long Term Housing Strategy deals with housing for the living only. The present situation is that not only is there a shortage of housing for living people, but there is no planning on housing for the dead. So, all of us must not die because there will be no burial ground for us.
I have no idea whether or not the Government has reserved any sites for development planning, be they in the Northeast New Territories, Northwest New Territories or Lantau. What can be done after if we die if the Government is not 9646 LEGISLATIVE COUNCIL ─ 9 April 2014 required to do any preparation for our accommodation and death? The problem can simply not be resolved. President, I very much hope that the Government can provide additional public columbaria expeditiously and build permanent public columbaria to prevent people who cannot resolve the problem from being forced to patronize those private columbaria. Not only do these columbaria charge exorbitant fees, some of them have even violated the regulations by encroaching on Government land in a blatant manner, thus causing a lot of nuisances to nearby residents. We have received many complaints very often, but the complainants are invariably passed around among various government departments, including the Town Planning Board, Lands Department, Food and Environmental Hygiene Department and the Development Bureau. It is extremely annoying that no government department can resolve the problem of non-compliant columbaria. I hope the Food and Health Bureau can expeditiously introduce a bill on the regulation of columbaria into the Legislative Council in order to address this problem.
Let me come back to women issues. The Democratic Party has all along been actively promoting that the Budget should have a gender viewpoint. Although gender budgeting has never been done in Hong Kong, it is not a novelty. Many countries have gender budgeting ― their governments are required to analyse the impacts of the budget on different genders during the formulation of revenue and expenditure proposals on public finance to ensure the compliance of government policies with the needs of different genders for the purpose of promoting gender equality. The Democratic Party and some women groups consider that a three-pillar package should be put in place to support the development of women. So, what do the three pillars refer to? First, the provision of childminding services in the community; second, the provision of an allowance for home carers; and third, improvements made to family-friendly policies. Nevertheless, we have not seen the Government make any positive response in this year's Budget to these aspirations. The relevant measures, even if mentioned, are still inadequate.
With regard to childminding services, the Democratic Party has noted that the number of subsidized standalone whole-day child care centres (CCCs) provided in various districts across the territory has remained at 690 over the past three years, and the average utilization rates across the 18 districts has already reached capacity. Hence, during our meeting with the Government over this year's Budget, the Democratic Party made a humble request for the number of CCCs to be raised from 690 to not less than 1 000. The Government appears to have slightly responded to our request by increasing the number of subsidized LEGISLATIVE COUNCIL ─ 9 April 2014 9647 standalone whole-day CCCs by 32, I mean 32 only. Despite our request for the number of CCCs to be increased by more than 300, only 32 additional CCCs, representing only one tenth of the total number, have been provided. As a result, many housewives or women who are new arrivals in the districts have kept complaining to Members of this Council, "What is wrong with the Government? There are simply no places in the district where I live." However, when I talked to the Government, it would say that there were many places and suggest that people who could not secure a place in the district they live to go to another district. But how can they bring their children to schools and then go to work? President, the Government always adopts a delaying tactic and performs its duty in a perfunctory manner.
Furthermore, we earnestly hope that family-friendly policies can be improved. We welcome the enactment of legislation on paternity leave, but can the Government set the number of paternity leave at five days to bring it on par with the number of paternity leave enjoyed by civil servants? Can the Government be more generous and refrain from proposing a one fifth deduction of wages earned by employees during paternity leave? The Democratic Party considers that employees taking maternity or paternity leave should be entitled to full pay without any deduction. Although the Government encourages childbirth and is worried about an ageing population, it is so mean about these family-friendly policies. How deplorable! Can one-off drastic reform measures be introduced in a more generous manner? Certainly, the Democratic Party earnestly hopes that the Government can allocate more resources to looking after those rewardless family carers by granting an allowance for family carers, so as to prevent them from becoming targets of poverty alleviation.
President, I so submit.
MR LEE CHEUK-YAN (in Cantonese): President, the Labour Party opposes this year's Budget. We certainly hope that all Members will together veto it. But the pro-establishment camp will certainly not do so. If we do not veto it, we will never have any bargaining power to bargain with the Government. Why do we have to oppose the Budget? After the delivery of the Budget by the Financial Secretary, I stated that the Government and the Financial Secretary could only see bricks and mortar rather than human beings. They only know the importance of launching massive construction projects but are unaware of the 9648 LEGISLATIVE COUNCIL ─ 9 April 2014 people's predicament. We can see that there is no commitment in the Budget in respect of people's plights and social conflicts such as poverty, education, healthcare, housing and transport. It seems that the Government has turned a blind eye to these issues and simply ignored them.
Insofar as the Financial Secretary is concerned, I have all along criticized him over the past few years as stingy and mean for he refused to spend money at the expense of the people's well-being despite hoarding abundant fiscal reserves. Now, in a feigned manner, he said that a long-term "Future Fund" would be set up for the sake of our future. But in fact he is halfhearted in doing so. As he is halfhearted in doing so, why did he propose the setting up of a so-called "Future Fund"? Finally, we realized that the so-called "Future Fund" is set up for the construction of infrastructure rather than the people's well-being. So, in our opinion, the Financial Secretary does not have any vision at all.
Speaking of a lack of vision, the Government as a whole does not have any vision either. The Government functions as a team on the surface, but there are two factions which are diametrically opposed to each other. One of them is the "local communists" while the other is the real estate clique. LEUNG Chun-ying represents the "local communists" while Secretary John TSANG represents the real estate clique. Both of them work in the same team. LEUNG Chun-ying, who represents the "local communists", pretends to be pro-grassroots for the sake of maintaining stability and his popularity. But he is just a pretender. Certainly, he has also allocated funds to setting up the low-income family allowance which is also supported by us. But he does not have any vision. In other words, he does not have any comprehensive and genuine concept of governance. He does not cherish any genuine hope that the poverty problem can be solved and our society can become more equitable. He does not cherish such concepts. He only wants to do something superficial for window-dressing purposes because he has to spend money in order to enhance his popularity.
On the other hand, John TSANG refuses to spend money albeit there are reserves aplenty. Furthermore, he pretends to be pro-middle class, but in fact he protects the real estate hegemonists. The two of them are also very different in respect of procedures. LEUNG Chun-ying simply does not attach any importance to procedures. I wish to make it clear that we consider procedures very important because procedures enable us to have thorough consideration in policy formulation. LEUNG Chun-ying does not pay any regard to procedures LEGISLATIVE COUNCIL ─ 9 April 2014 9649 because he is too keen on buying enhancement of his personal popularity. So, he has decided to spend money without due regard to procedures.
Just now, I mentioned the difference between "local communists" and the real estate clique. Firstly, LEUNG Chun-ying, as I said just now, has simply ignored procedures although we consider procedures essential. But he has ignored procedures because he is too keen on enhancing his popularity. In contrast to him, John TSANG is on the other side of the balance. He has abused procedures. Although he has repeatedly said that he has to abide by the procedures, he does not do anything at all so as to protect the interests of real estate developers.
Therefore, Hong Kong is really unlucky due to the existence of these two men. In the absence of any vision, they are merely making calculations for their own political interests. How could Hong Kong have good luck in such a chaotic situation? Therefore, according to the Labour Party's long-standing belief, the universal suffrage system we need is one that allows various political parties to elaborate their philosophies and convince the public to support their philosophies. Finally, policies are formulated according to these philosophies. However, we in Hong Kong do not have such a system.
Just now, I said that the Financial Secretary is stingy and mean, refusing to spend money despite there are reserves aplenty. I will show this chart in every discussion on the Budget. There is another chart about the Financial Secretary. My chart presents the situation starting from 2003-2004, while the other chart indicates the situation starting from 1997. This chart indicates the situation from 2003-2004 to the present, a total of 10 years in which government revenue has increased by 100% while the GDP has increased by 70% and government expenditure has increased by 45%. It shows that the government revenue has increased by a substantial amount while expenditure has only increased by a small amount or 45% only. While the growth in government revenue is higher than the GDP, the government expenditure has also lagged behind the GDP. This explains why I always say that money is left idle by the Government. We can see that the government revenue is indeed higher than expenditure.
The other chart also indicates that government revenue is more than expenditure. It shows the percentage of cumulative government revenue and expenditure as a share of the GDP from 1997-1998 onwards. Here are the figures for 1997-1998, while this chart can indicate all data up to the latest. The upper part indicates the government revenue and expenditure, while the lower 9650 LEGISLATIVE COUNCIL ─ 9 April 2014 part indicates the operating income and operating expenditure. Now, the operating income is 15.2%, while the operating expenditure is 13.2%, representing a difference of 1.9%. Here, the government expenditure is 17.6% and government revenue is 19.1%, representing a difference of 1.4%. President, a difference of 1.4% is very significant, meaning that a lot of money is available for disposal. However, money is left idle by the Government. Worse still, John TSANG, on the basis of the Report of the Working Group on Long-Term Fiscal Planning, said that expenditure should be contained at 20%, meaning that government expenditure should not exceed 20% of the GDP. Under this principle, a lot of issues cannot be tackled because expenditure has been capped.
I wish to point out the consequence of his reluctance to spend money, stinginess and meanness. The consequence is that public services are facing a breakdown or verge on a breakdown. We can see that among the elders who are waiting for places in residential care homes, those who died while on the waiting list outnumber those who were allocated places. In 2013 when only 850 elders were allocated places, 1 729 had died while on the waiting list. The waiting time of new applicants for psychiatric service has increased from three weeks in 2000 to more than seven weeks now, representing a rise of more than 100%. Let us look at healthcare. On the day when I accompanied the hunger strikers to the Prince of Wales Hospital, I thought the Accident and Emergency Department (A&E Department) of the Prince of Wales Hospital was excellent because there were dozens of wards. But in fact many patients were put up in beds only. The waiting time in the A&E Department is certainly as long as seven or eight hours. But even for emergency patients, there is no ward available for consultation. They were all lying in the lobby. When I was leaving, some medical staff members told me that the scene of the upper floor was more terrible and could be described as hell. Owing to the manpower shortage, they were unable to take care of the patients. So, the whole hospital was like hell and scary, not to mention the poor service of the hospital. We can see that if the Government is willing to spend money on this aspect, the problem can be resolved.
We have all long urged that universal retirement protection be implemented to address the problem of elderly poverty. But the Government does not do anything. Now, a report by a committee is expected but no one knows how long we have to wait. Recently, when we discussed the manpower problem, we mentioned industrial safety. In the first quarter of this year, 10 construction workers have died, while the death toll of last year is only 22. But the death toll LEGISLATIVE COUNCIL ─ 9 April 2014 9651 for the first season of this year is 10. Do you not think it is alarming? Because our infrastructure can be described as being built on the blood and sweat of workers. Do we want such infrastructure?
Unsurprisingly, the Government said that more site inspections would be conducted. But more site inspections would imply that inspections for the catering industry will be reduced. As a result, the death toll due to accidents in the catering industry will rise. By analogy, the Government has only nine lids for 10 pots. There is always an inadequacy. In fact, I should say that there are five lids for 10 pots and it is impossible to cover all the pots at all. As many services are urgently needed, the number of civil servants has increased by 1.5%. But we request a substantial increase in the number of civil servants because the demand for civil servants has increased and the manpower shortage has indeed affected efficiency. But when we discussed the problem with the Government, the Civil Service Bureau said that the increase rate of 1.5% in manpower this year was the highest compared to previous terms of the Government. In fact, an increase rate of 1.5% is trivial. We are now …
(Mr MA Fung-kwok raised his hand)
PRESIDENT (in Cantonese): Mr MA, what is your point?
MR MA FUNG-KWOK (in Cantonese): I wish to watch LEE Cheuk-yan speaking. But my sight is blocked by those placards.
PRESIDENT (in Cantonese): Are Members who placed the placards not present? Would the staff please take away the placards. Mr LEE Cheuk-yan, please continue.
MR LEE CHEUK-YAN (in Cantonese): Dr Helena WONG mentioned education earlier. The tuition fees of self-financing sub-degree and degree programmes have almost "dried up" the financial resources of a family. But no one knows whether the young people can find any good jobs after getting an associate degree. As a result, the education system as a whole is gradually collapsing. Despite breakdowns in so many aspects, the Financial Secretary has 9652 LEGISLATIVE COUNCIL ─ 9 April 2014 turned a blind eye to and ignored the problem. Therefore, we believe if we have a competent Financial Secretary and a competent Government which is willing to resolve problems for the people wholeheartedly, our Government, which has plenty of fiscal reserves, is absolutely capable of resolving those problems. But it is just reluctant to put its capability to good use. This is even worse than a government which is totally incapable being asked to put its words into action.
Just now I criticized the Financial Secretary for being too stingy to spend money on public services. But he will spare no efforts in investing in large-scale construction projects. The expenditure on infrastructure in 2007-2008 was $23.1 billion, which was a small amount at that time. But in 2014, it has gone up to $76.9 billion, representing an increase of 250%. But the increase in recurrent expenditure is less than 55% over the same period. Why did the Financial Secretary not allocate funding to meeting recurrent expenditure or services for the public? I guess that in the Financial Secretary's viewpoint, it is a burden or debt if fiscal reserves are spent on services for the people. He prefers investing in infrastructure but is never willing to invest in the people. Such a concept is entirely poles apart from ours.
However, the Secretary has proposed a long-term fiscal plan, which is actually a long-term plan to shirk responsibilities. In fact, the long-term fiscal plan is an appalling suggestion. On the basis of the Secretary's projection, even if government services are maintained at the current low level, government expenditure will exceed 20% of the GDP in 10-odd years due to the ageing population alone. However, he said government expenditure should be contained at 20% or less. If government expenditure should be contained at less than 20%, the only way is … owing to an ageing population, even if the Government can maintain the existing services, it is still not sufficient and the expenditure will also be more than 20% of the GDP. Hence, the only result is that government services will be clenched and made more fragmented in future while service quality will deteriorate. Does the Government wish to see such an outcome? After staging a "grand show", the final proposal is to turn the Land Fund into a fund for infrastructure development purposes.
I would like to quote the remarks of the former Head of Central Policy Unit Leo GOODSTADT. He said (to this effect), "Various social problems in Hong Kong now can be traced back to the years of the Colonial Government which refused to expend resources on areas where allocation was due, procrastinated the LEGISLATIVE COUNCIL ─ 9 April 2014 9653 introduction of free education, opposed the implementation of a social security system and vetoed the pension scheme. As a result, the ageing population problem in Hong Kong cannot be resolved and the authorities cannot provide adequate protection to the elderly either." I would like to dedicate this to the Government. He further pointed out that the maladministration on the part of the Colonial Government in the past decade or so has resulted in adverse consequences extending to the present day. If the Government does not do anything now, our future generations will suffer adverse consequences. The so-called "Future Fund" is simply useless. What the Government should do is not to set up a fund. Rather, it should expend resources on areas where allocation is due instead of passing its responsibilities to the future.
President, after discussing a lot of macroeconomic issues, I would like to talk about some micro problems, which do exist in the Government. Let us look at this picture, which was taken by a newspaper in reporting a seminar on the Basic Law. In the picture, the participants were eating dim sums. I found that the seminar should be called a seminar on dried fish maw rather than the Basic Law because the participants were eating fish maw and grouper meat. The Government and TSANG Tak-sing are expending money in this way. At the so-called seminar on Basic Law sponsored by the Home Affairs Bureau and District Offices under the Home Affairs Department, the time for discussion on the Basic Law was very short. As we can see it, the participants spent only 30 minutes on the discussion on the Basic Law before helping themselves to fish maw. In the end, they had to "split the bills". They said that the District Council concerned had sponsored $28,000 for "hiring the venue". I did not know that restaurants would charge rents for their venues. I think Members all know that this is not the case. Such an arrangement only seeks to facilitate splitting of the bill. In our opinion, the Government is just willing to expend funds unwisely, thereby enabling the District Offices to transfer benefits to the pro-establishment camp, including the District Councils. Why was HUI Chi-fung prosecuted? Because he protested that the District Council had engaged in "pie sharing" on the sly. Unexpectedly, some people let security guards call in the police to take him away because they hated him for obstructing their "pie sharing". In fact, the District Council has been reduced to a mechanism of "pie sharing", and the Government is also willing to let them "share the pie", resulting in the aforesaid de facto seminar on fish maw.
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In our opinion, the Audit Commission should check the expenses incurred and the Independent Commission Against Corruption should also conduct an investigation to see whether there is any transfer of benefits. Only in doing so will public money not be squandered. We can see that the Government is reluctant to expend resources on areas where allocation is due. On the contrary, money is always squandered down the drain. Therefore, we will certainly oppose the Budget (The buzzer sounded) … Thank you, President.
MR RONNY TONG (in Cantonese): President, some people say that in this world, there are few things that money cannot buy. But I think that in this world, there is hardly any policy can be put into practice without money. Therefore, whilst the fiscal management philosophy or fiscal policy of the Government cannot be described as the soul of government administration, it is surely its heart because it is only through a suitable fiscal management philosophy and fiscal policy that the Government's administration can be taken forward.
However, nowadays, we can see a very strange phenomenon. Apparently, the LEUNG Chun-ying Administration has stated that its intention to make achievements in various areas but at the same time, our Financial Secretary is "throwing a cold blanket on it", pointing out that a structural deficit will occur in Hong Kong some years later. In other words, we must not make spendings indiscriminately. President, I really do not know if the two are collaborating with each other to hoodwink the public or there is really internal discord. It is indeed a ragtag band of people. However, no matter if they are collaborating with each other to hoodwink the public or it is just a ragtag band of people, Hong Kong people will not stand to benefit in any way.
One difference between the Budget this year and those in the past is that before the Financial Secretary had come to the Chamber of the Legislative Council to announce it, the attention on the Budget had been completely stolen by the views of the Working Group on Long-Term Fiscal Planning (the Working Group). President, why was it necessary to make public the report or the main views in the report of the Working Group before the presentation of the Budget? The Government may think that doing so would help dampen the expectations of the public and that this is an important aspect of expectation management but I think such an arrangement is deliberate and meant to serve a purpose. As I have said, no matter if the purpose has to do with the collaboration within the LEGISLATIVE COUNCIL ─ 9 April 2014 9655
Government in an attempt to hoodwink the public or it is because of the Government's ragtag make-up that their visions are polarized, and the public only feel apprehensive and uneasy.
President, several days ago ― sorry, I cannot remember very clearly and that was perhaps two days ago ― the experts concerned came to the Legislative Council to brief Members on their justifications. I was quite astonished at hearing them. Why? On the one hand, their conclusion is ― I believe the Financial Secretary also agrees with it ― if the recurrent expenditures in the three areas of education, social welfare and healthcare do not change, structural deficit will occur 15 years later; and if the relevant expenditures increase by 3% annually, the deficit will occur seven years later. President, I asked those experts if the factual basis for their assumptions was correct. President, the focus here is the problem of an ageing population in Hong Kong, which our Financial Secretary talks about every day and in the report, great lengths are devoted to the discussion on this problem. President, to someone as simple-minded as me, I would think that the ageing of the population cannot co-exist with a drastic increase in population, as the two are opposites. Therefore, if the ageing of the population occurs in our society, the demands in some areas will not increase drastically. If the population remains the same, the quality may increase because of a decrease in demand and the ageing of the population. To me, the logic is very simple, so I really cannot understand how the ageing of the population will result in drastic increases in demand in society.
Of course, different reactions will occur in various areas. In healthcare, I agree that we may have to increase the medical equipment and resources for the care of the elderly because of an ageing population, but what about education? President, what about housing? What about social welfare? What we must take note of is a point raised by me just now, that is, the ageing of the population is the opposite of a drastic increase in population and that they cannot co-exist. In other words, the expenditure on education may not increase drastically. However, if "large-class teaching" is changed to "small-class teaching", it is possible that the quality of education would be enhanced. The same applies to housing, President, as we cannot construct buildings infinitely. If we want to construct buildings infinitely, first, we have to assume that such a demand exists, that is, the population is ever increasing, perhaps from 7 million to 70 million or 10 million or 20 million; second, is there a corresponding supply of land? We may run out of land. Therefore, the factual basis for the assumptions of this 9656 LEGISLATIVE COUNCIL ─ 9 April 2014
Working Group is highly questionable. Why have we never discussed these logical issues? Not only have the contents of the report never been subject to discussions, they were publicized all at once to scare Hong Kong people.
In addition, President, the Conclusion of the Working Group ― at least in relation to the initial period ― is directly opposite to the direction of the forecasts made by the Financial Secretary. President, we can make reference to the Budget. The Financial Secretary points out in his medium range forecast that in 2014-2015, our fiscal reserves are estimated to be some $750 billion, accounting for 34% of the GDP; in 2015-2016, the fiscal reserves are estimated to be $720 billion, accounting for 31% of the GDP because he thinks that a slight deficit would occur; in 2016-2017, the fiscal reserves will increase to some $736 billion, accounting for 29.8% of the GDP; in 2017-2018, the fiscal reserves will be $750 billion, accounting for 29.1% of the GDP and in 2018-2019 ― here, it is rather strange because there is a discrepancy in the figure in his report ― the fiscal reserves will be some $790 billion, accounting for 29.1% of the GDP. This contrasts with paragraph 156, in which he said that in March 2018, our fiscal reserves would reach $850 billion, accounting for 31% of the GDP and would be equivalent to 21 months of expenditure. President, I find this very strange because if four years later, our fiscal reserves continue to increase and so does the GDP, how could a structural deficit occur three years later? I really cannot figure this out. Just now, I also explained why I could not figure this out, the basis being I do not accept that our expenditures on education, housing or welfare will all increase drastically year on year. President, I do not mean that it will not be necessary to increase the expenditures but my arguments for the drastic increases are different. You may consider it necessary to introduce relevant measures in order to improve the living of Hong Kong people, but when a certain extent and level have been reached, this kind of demand may cease to exist. This is very simple. Let me use housing as an example. When everyone has his own home, it would no longer be necessary to construct any more buildings. Does it mean that when all people have their own homes, it would still be necessary to continue to construct more buildings and leave them vacant? Housing construction is one of the major items of expenditure in future in the Budget, President. I raise this point simply because I query the direction of the fiscal management philosophy, rather than querying how each figure is derived under such a philosophy. The focus is on what kind of mentality we should adopt in implementing social policies.
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President, there is one point that we all know and it has also been raised in the legislature for innumerable times. If the forecasts and the actual revenues in all the Budgets since the reunification are compared and calculated by adding together the surpluses recorded in some years, then the total is deducted by the deficits recorded in other years, according to the result of our calculation, on average, the estimated revenue each year is less than $35 billion … sorry, or rather, it should be more than $35 billion. Members also have to take into consideration one point, that is, the period of time in which revenues are actually received and that in which the forecasts are made are different. A forecast is made this year on the figure next year, so in respect of the actual revenue received, it will be necessary to wait until settlement next year to calculate how much the actual revenue is, so a time lag exists.
President, another point that we also need to consider is: From 2007 to 2014, we handed out one-off "candies" at a cost of about $220 billion. President, I have to raise several questions: Firstly, did these so-called one-off candies have any effect on inflation? All of a sudden, a lot of people had more money, so they want to spend it and few people would think it necessary to deposit the money into banks or put it in piggy banks. Hardly anyone would do so. Even among the grassroots, very few people would do so. What they thought about was perhaps to have a good dinner outside, whereas young people wanted to go to karaokes, so what good did it do to society? This is the first point.
Secondly, with $220 billion ― President, I really am not very sure because I have very poor sense of figures ― may I ask the Financial Secretary how many hospitals and universities can be built and how many poor people can be assisted with this sum of money? I only wish to raise these very simple questions. In other words, what good did these one-off candies actually do? I really cannot see any benefits but some Honourable colleagues believe that instead of "handing out candies", the Government may as well give $10,000 back to me in one go. President, to some extent, such rationale is founded, even though I may not necessarily agree with them, nor would many people in society, but such a rationale is a logical extension of the Government's "handing out of candies" every year.
In addition, were the funds used by the Government to "hand out candies" each year included in the recurrent expenditure or non-recurrent expenditure? 9658 LEGISLATIVE COUNCIL ─ 9 April 2014
If, beginning with tomorrow, no more candies would be handed out, at least $10 billion or $20 billion could be saved each year, so is this sum of money regarded as additional recurrent expenditure? According to the table mentioned just now, if the expenditure increases by 3% annually, a deficit will occur seven years later, so has the $20 billion or $30 billion made available because of the decision not to hand out candies been factored into this 3%? If it is factored in, will a deficit occur? President, there are no answers to these questions. This Budget is typical in that it has raised many questions that arise every year and all of us are aware of them, but no answers are given.
President, I believe that the Budget has only two aims: First, how to reinvigorate the economy and increase revenue and second, how to improve the people's livelihood. The Budget only has these two aims and there cannot be a third one ― sorry, President, collaboration in hoodwinking the public is not an aim. On reinvigoration of the economy, what measures that can win my plaudits are proposed in this Budget? No measures in this regard can be found, President, so it has little merit and is devoid of such measures. When it comes to measures to improve the people's livelihood, there are indeed such measures but they all amount to tinkering and worst of all, before money is spent, we have been intimidated and told to think seriously about the deficit that will occur at any time a few years later and for this reason, we must not expect the Government to continue to spend money. President, does such an attitude really deserve our support? I am not criticizing the Financial Secretary alone, but also the whole Government and the administration by LEUNG's team.
President, I wish to cite a very simple example ― I know I have little speaking time left and 15 minutes really may not be enough but this does not matter ― I will use this simple example to elaborate my view. The Financial Secretary said that this year, many measures had been taken and that many poor people had been assisted, but we only have to look at some basic figures to find that some problems have never been solved. President, in the past few years, the numbers of elderly people waiting for residential care places in elderly homes and nursing homes have remained at the level of 23 000 people and 6 300 people respectively and the waiting time for such homes is more than three years. Each year, about 3 000 elderly people were not allocated residential care places even at the time of their death. They had waited until death without being offered any residential care places.
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President, these are government figures; the situation is the same every year and there has never been the slightest change. What about the situation this year? The Government said that in the next two or three years, funds for an additional 950 residential care places would be allocated but new residential care places provided by the Government will only number at 176, whereas the remainder will be bought places. President, this is very simple. We need only look at these figures to know that we have not dealt with the problem in any way. Worst still, since the focus is on the ageing of our population now, it means this problem will not see no improvement but deterioration. Since this problem will only deteriorate, what initiatives and proposals have been proposed in this Budget to improve such a heartbreaking situation? President, the answer is that there is none, so I can hardly support this Budget.
MR TAM YIU-CHUNG (in Cantonese): President, this year's Budget can be regarded as the most unadorned one in recent years. Several Members blasted it in their speeches earlier, and the Financial Secretary must have heard them all. But regrettably, he will miss the approving remarks I am going to say of him. Generally speaking, society does not see much of a surprise and thus will not give a thumb-up. However, the Financial Secretary has fully performed his duty by making complementary efforts in terms of financial provisions for the 100 or so economic and livelihood measures proposed in the Chief Executive's Policy Address released in January. Moreover, the Budget makes up for a shortfall in the Policy Address by responding to the call by the Democratic Alliance for the Betterment and Progress of Hong Kong (DAB) for supporting the middle class and small and medium enterprises (SME), including reducing salaries tax again, waiving rates for two quarters, increasing the allowance for dependent parents; and supporting the SMEs through reducing profits tax, increasing the sites for commercial/business use, extending the SME Financing Guarantee Scheme, setting up a matching fund to enhance the retail sector's productivity, promoting a centre for retail and wholesale fashion businesses at the district level, and so on. Hence, overall speaking, the DAB supports the Budget.
This year, the Government reduces the amount of "candies" by trimming the scale of the one-off relief measures. As the Government announced in the presentation of the Policy Address that an additional $7.04 billion would be earmarked for implementing several new recurrent measures dedicated to poverty alleviation, care for the elderly and support for the disadvantaged, including introducing a Low-income Working Family Allowance, regularizing Community 9660 LEGISLATIVE COUNCIL ─ 9 April 2014
Care Fund programmes, increasing the amount of the Elderly Health Care Voucher, increasing the recurrent funding for social welfare organizations and so on, an additional financial provision of $10.7 billion for implementing the Special Scheme on Privately Owned Sites for Welfare Uses, an injection of fund into the Child Development Fund and the Partnership Fund for the Disadvantaged, coupled with the lower fiscal surplus for 2013-2014 compared with the past, the DAB finds it acceptable to reduce the amount of "candies".
The Financial Secretary has dedicated a separate section in this Budget to the Government's views on public finances. He pointed out that according to the projection by the Working Group on Long-Term Fiscal Planning, given the different paces of growth in government expenditure, a structural deficit would surface in seven years' time the soonest. Even if no service enhancement is to be made, a structural deficit would surface in not less than 15 years. The Financial Secretary's approach to financial management has all along been prudent. Although he time and again highlighted in his speech this year the need to contain expenditure growth, preserve revenue base and save for the future, the tone of language was much milder than the stern expression of "adhering to fiscal discipline" used last year. As the SAR Government's chief financial controller, he is duty-bound to make proper financial projection for both the medium and long terms with a view to drawing up proactive measures expeditiously to cope with any possible crisis, as well as preserve and enhance government revenue to meet the increasing expenditure. In this regard, the Financial Secretary early warning gives no cause for much criticism.
On the basis of the projection made by the Working Group on Long-Term Fiscal Planning, the DAB holds that the Government has much room to improve services in respect of healthcare, social welfare and education. A large part of the growth in the Government's recurrent expenditure over the past few years was accounted to the one-off relief measures. Over the past seven fiscal years, the Government's expenditure on the one-off measures totalled $220 billion, which included $63.1 billion on waived rates and property tax reduction, as well as $55.4 billion on Scheme $6,000 and electricity subsidy. This $220 billion divided by seven is approximately $30 billion a year, which accounts for around 8% of the Government's annual total expenditure, 10% of the recurrent expenditure, or 1.5% of the GDP. The Government insists that these one-off relief measures are counter-cyclical in nature and subject to allocation in the light of the fiscal position of the year, but the DAB holds that such practice fails to concentrate the valuable financial resources on long-term measures needed by LEGISLATIVE COUNCIL ─ 9 April 2014 9661 society. According to the projection by the experts and academics from the Working Group, there is still some steady growth in the SAR Government's revenue in the medium and long terms, and such growth projection is more accurate in the sense that a medium-to-long-term projection is made regardless of the economic performance of a certain year. Although changes in the business cycle will have a direct bearing on government revenue every year, such changes can either be positive or negative, and the two will offset each other in the long run. Therefore, despite the discrepancy between projected and actual government revenue every year, the aggregate amount remains stable in the long run. With the aggregate amount being stable, the Government should minimize the expenditure on one-off measures by all means and commit such resources to recurrent measures on education, healthcare and social welfare where improvement is in greater order.
According to the financial projection for this year, total government expenditure amounts to $411.2 billion, which represents a 5.7% nominal reduction from the revised estimate and a 7.4% reduction in real terms. This pales in comparison to the 4.5% GDP growth and is rarely seen in recent years. The Government has all along emphasized the need to hold fast to the forecast nominal GDP growth rates over the medium term as planning ceilings for total government expenditure. Using this yardstick for assessment, the Government's practice is not up to par this year. It also shows that the Government has room to make further financial commitment when it comes to improving the people's livelihood. According to research done by this Council, the Government has consistently underestimated revenue and overestimated expenditure over the past decade. Between the financial years 2004-2005 and 2013-2014, the actual surplus for each of the years was higher than expected, and the amounts of revenue underestimated and expenditure overestimated totalled $442 billion and $140 billion respectively. Over these 10 years, the Government's operating revenue increased by 85.1%, vis-à-vis a mere 48.3% growth in recurrent expenditure, which has already taken into account the spending on various one-off relief measures. In other words, the Government's spending on livelihood matters was inadequate over the past decade, and is so for this year, too.
In face of the continually ageing population in the future, the Government has to exercise prudence in financial management, but it should also make the best use of its reserves to implement various long-term measures. In the Budget, the Financial Secretary mooted the idea of a "Future Fund" as a contingency fund 9662 LEGISLATIVE COUNCIL ─ 9 April 2014 in the event of a fiscal deficit. However, as for the question of whether the fund is dedicated only to infrastructure projects, we consider this negotiable. As early as the Government decided to include the Land Fund in its consolidated accounts in 1998, the DAB proposed a motion to call for dedicating the annual proceeds from the Land Fund to introducing new recurrent measures on healthcare, social welfare or education, and so on.
Now, the Government should expeditiously examine how to rationalize its various accounts for the effective use of its fiscal reserves, with a view to making a way out of the haze of structural deficit, introducing necessary livelihood measures in a more proactive manner, as well as supporting and fostering the development of various key and new industries.
Since the Chief Executive, Mr LEUNG Chun-ying, took office, the SAR Government has implemented numerous bold and sweeping initiatives on social welfare, so the expenditure on social welfare has been rising at a faster rate. For the year 2014-2015, total government expenditure on social welfare sees a further 8.7% growth from the previous year, amounting to $61.9 billion. Some are worried about the growth pace of social welfare expenditure, but I consider such worry unnecessary on the ground that the growth in these two years was predicated on the Government's inadequate effort in building up the social security system in the past. Hence, things had to start from zero in these two years, such as introducing the Old Age Living Allowance, the Low-income Working Family Allowance and the Community CareService Voucher for the Elderly, and so on, and this contributed to the sudden and abrupt growth in social welfare expenditure. With the introduction of these recurrent measures, the social security system will basically be complete, and there will not be any need for the Government to increase its social welfare expenditure abruptly.
The Government's determination to introduce reforms in social welfare is evident to members of the public. I wish to make one more point, where the Government has to enhance its implementation effort in order to speed up the work. One of the two examples I am going to cite is about elderly nursing home places. As early as 2012-2013, the Government estimated that 1 954 places would be provided, but the actual number provided over the past two years was merely 1 735, which was 11% lower than the estimate. The plan to purchase 219 places in 2013-2014 had to be deferred to this year. Another example is about hostel places for severely mentally handicapped persons. In 2013-2014, the Government planned to add 266 such places, but only 100 were added in the LEGISLATIVE COUNCIL ─ 9 April 2014 9663 revised estimate, and the outstanding 166 places were brought forward to this year. Such kind of shortfall occurred over and over again. Therefore, only through an enhanced implementation effort will the Government's financial resources be properly used for the benefit of the public in an expeditious manner.
The People Power and the League of Social Democrats filibustered over last year's Budget by proposing 700 or so amendments. This year, they have taken it even further with the submission of nearly 2 000 amendments to the Secretariat, with a view to paralysing the Government and pulling down the Budget. The DAB fully opposes any move that starkly runs against public interest.
Filibustering will put the Government on the brink of a financial cliff again. The amount of funds on account sought by Government is only enough to meet its expenditure until June. If the Budget is not passed by that time, all public services will have to come to a halt, and the public will feel the pinch. Other Agenda items of this Council for the coming two months or so will have to be postponed, and Members will have no way to follow up on the various urgent livelihood and economic policies in a timely manner. Tens of million dollars of public money will also be wasted on the repetitive action of pressing the voting buttons. Various measures to benefit the public cannot be rolled out. The double payment for 800 000 elderly people as well as 400 000 recipients of Comprehensive Social Security Assistance and Disability Allowance will not be materialized. Given the countless harm brought by filibustering, Members from the DAB fully support President in cutting off the filibuster as soon as possible, which is in line with the public aspiration and demand.
With these remarks, I support the Appropriation Bill 2014. Thank you, President.
MR WONG KWOK-HING (in Cantonese): President, the Hong Kong Federation of Trade Unions (FTU) supports the Budget, but we think that there is room for improvement.
In relation to the Budget and the Policy Address presented before it, I had held six meetings for the residents to collect views from the citizens and workers from all trades and industries. With this as the basis, I attended the special meetings of the Finance Committee which were held for five days and totalling 20 sessions. I raised 42 questions in the meetings. In the replies to these 42 9664 LEGISLATIVE COUNCIL ─ 9 April 2014 questions, seven of them are in the affirmative and carry a positive meaning. Three of them are related to the rights of wage earners.
First, the FTU strongly opposes expanding the scheme for importation of foreign workers. In the replies given by a number of Bureau Directors, agreement was expressed that the right to priority employment of local workers should be protected and they also agreed to continuing with the Supplementary Labour Scheme for importation of foreign workers. Second, the Government will recruit candidates to fill 2 556 civil service vacancies and some of these posts will replace 670 posts for contract staff. Third, with respect to the question of legislating on reinstatement order, and for which we have pursued for many years and the Government has defaulted for one year, the current-term Government has replied that the matter will be taken forward next year. A Bill will be introduced to this Council for scrutiny. We welcome this.
On the development of technology in Hong Kong and productivity, there are two points (that is, point four of the total), on legislating on the implementation of an original grant patent system, no timetable was given in the initial reply from the Government other than saying that active steps would be taken to prepare for it. But a timetable was given in the latest reply, stating the hope that legislation on an original grant patent system would be conducted in 2016-2017. This move is very useful in protecting local inventors and promoting the development of technology and productivity.
Fifth, we have pointed out many times that the industrial parks and the Hong Kong Science Park cannot meet the demands and there is a need for further development. The Government said in its reply that a full-scale review would be conducted and a report would be submitted at the end of this year. We also welcome this.
With respect to the people's livelihood, there are two points worth mentioning in the Government's response. First, on water tariff. I urged strongly in the meeting that if water tariff were to be increased, there should be a consultation exercise first. The Government should take the lead to economize on water consumption, solve the problems of leakage of water pipes and that seawater is still not used on a full scale to flush toilets. I hope that the Government can solve these problems first. In its reply the Government promised that consultation would be held and water tariff would not be raised before consultation is held.
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Lastly, on the long-term strategy on funeral services. I have asked about the contracting out of the right to operate municipal funeral parlours. This is because the arrangement will greatly add to the burden of the citizens and it cannot check and balance the fees charged for private-sector funeral services. I have written a couplet for the purpose of reminding the Government to follow this issue up. The couplet reads to this effect: "The door of government funeral services is wide open, but the poor people can only shake their heads and sigh". In fact, two years ago when I called a press conference together with the funeral service sector, I had displayed this couplet. The Government gave a promise that a review would be conducted. I hope that a report can be submitted soon.
Let me present a banner to the Administration and I hope that it can review its long-term strategy on funeral services and to take serious actions to deal with this problem. In addition to devising a long-term housing development strategy for the living, the Government should also devise a long-term development strategy to house the dead. It is only then that members of the public can rest assured.
President, in the second part of my speech I wish to speak on behalf of holders of electricity accounts with a low consumption of electricity and those elderly account holders with a surplus in the electricity subsidy.
President, before the meeting began today, a group of elderly persons and District Council members representing them made a petition outside the Legislative Council Complex and handed signatures and a petition letter to the Financial Secretary, Mr John TSANG. They demanded that the Government should accept their view on the electricity subsidy. In the past four years, that is, 2008, 2011, 2012 and 2013, a total of $9,000 in subsidy on electricity tariff was allocated to every household. The amount of subsidy each year can be used over three years, and 2.5 million holders of residential electricity accounts in total can benefit.
However, those elderly persons and those with low electricity consumption may not be able to use up their electricity subsidy within three years. According to the figures in 2011, 90% of the accounts can use up the subsidy whereas the subsidy is not used up in the remaining 10% of the accounts (about 250 000). The surplus from the subsidy is $380 million, which is more than what the Government expected. Most of the holders of these accounts are elderly persons. From this it can be seen that quite a number of accounts have not used up the subsidy for 2013 before the deadline on 30 June 2016.
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I wish to propose that the validity period for using the electricity subsidy should be cancelled. There are three reasons for it. First, the subsidy is already an expenditure item for the Government and there is no need for the Government to apply for supplementary appropriation and no extra administrative work is required. Second, there is no need for the Government to increase any manpower to handle the surplus in the subsidy for those accounts held by elderly persons. The two power companies can fulfil their corporate social responsibility by allowing the elderly persons to use up the remaining sum in their subsidy. I believe the power companies will agree. Third, most of the electricity accounts with a remaining sum in subsidy are held by elderly persons.
President, please look at this graph I have got. Some household appliances are shown here. Most elderly persons would just need lighting, boiling water and appliances for cooking. Most of the elderly persons do not use appliances with a large consumption of electricity because they are frugal. They get up and sleep early. During the daytime they would go to the library, centres for the elderly, and so on, and therefore most of them do not use up the electricity subsidy.
I have got here an electricity bill which is one of the bills collected by me and it has the largest remaining sum of subsidy. It is $7,380.15. The account holder only spends a few dozen dollars or less on electricity every month. If he is allowed to use the subsidy, how long can he use it? I have worked out the sum and that is, the subsidy of $6,600 suffices to keep him going for 27.5 years. If the Government does not accept this idea, I hope that the remaining sum of the subsidy can be encashed as a handout.
President, according to statistics, those households with a very low consumption of electricity and those green households only spend $44 monthly on electricity. In 2011, a competition was held for families which economized on electricity and had the lowest carbon emission. There was a three-member family which had a monthly electricity bill which averaged only $44. Owing to the above reasons, I hope the Government can formulate a four-win proposal, that is, which respects the elderly, assists them as well as being environmentally-friendly and energy-saving.
On 10 March, the Financial Secretary wrote to me in reply. He said to this effect: "We will pay attention to sums not used up in the subsidy and will decide on the relevant arrangement in line with the future economic and financial LEGISLATIVE COUNCIL ─ 9 April 2014 9667 situation." In other words, the door of the Government is still open and it is prepared consider the idea. I welcome this. I hope that the Financial Secretary can give serious thoughts to this sensible suggestion regarding account holders who are elderly persons or with low power consumption. I hope there can be good news for them soon.
President, I still have five minutes in my speaking time. I wish to speak on the abolition of the offsetting arrangement for the Mandatory Provident Fund (MPF) System.
In line with the trend of population ageing, it has become an urgent matter to devise a comprehensive retirement protection system. It is true that Members are waiting for the research findings of the task force headed by Prof Nelson CHOW which will be submitted in mid-2014. However, there are two points in the Budget this year that I must highlight and I hope the authorities can give them consideration.
First, the Government wants to set up a "Future Fund" by freezing $220 billion ― Land Fund. What is meant by "future"? We hope that consultation can be conducted first and in-depth studies undertaken. We hope that consideration can be given to the suggestion from the FTU, that is, the Fund should be a start-up fund or a seed fund for a comprehensive retirement protection system. The authorities say that the idea would be considered and it is not rejected. I welcome this. I hope the idea can be given serious consideration.
We are also concerned about the offsetting problem related to MPF. With respect to this, the employers and employees have different views. We can also see that there is still a long way to go for this problem is to be solved. But how can results be achieved? The Chief Executive said in his Manifesto when he ran in the Chief Executive Election in 2012 that, and I quote, "to progressively reduce the proportion of accrued benefits attributed to employer's contribution in the MPF account that can be applied by the employer to offset long service or severance payments". (End of quote) Since the Chief Executive talked about "progressively", and I think this is a right approach, then I would hope that the Government and this Council will take the first step and abolish the offsetting arrangement for contract staff of the Government and this Council in respect of the long service and severance payments.
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President, I have placed this picture of a piggy bank on the bench and this symbolizes the savings we have in the MPF accounts which enable us to lead a comfortable retirement life. Since the Chief Executive has made his view clear, I do not think it is meaningful to talk about abstract things. Now there are some 12 000 contract staff in the Government and 70 assistants to Members of this Council as well as contract staff in this Legislative Council Complex. Their MPF contributions will disappear when their contracts expire. As the Government and this Council do not have a relationship of an employer and an employee, I therefore believe that my suggestion would not give rise to much controversy. Then should we not take the first step and take the lead to put this into practice?
This is like the case of paternity leave introduced by the Government earlier. At first, it was introduced in the Civil Service and after some time when it was thought that the idea was practicable, then legislative work began. I think that the paternity leave case is a successful experience. Therefore, I hope that the Government and this Council can take the lead and cancel the offsetting of MPF. President, I hope you can lead this Council in taking this first step for all companies and agencies in Hong Kong.
President, in the remaining tens of seconds of my speech, I must point out that some Members and political parties have proposed 1 917 amendments to the Appropriation Bill 2014. This is a waste of taxpayers' money. One day of filibustering in this Council will cost $2.25 million and it will cause delay to matters that need to be discussed as well as meetings and Bills. The filibustering last year continued for more than 10 days and wasted $38.25 million. So President, I hope you can drum up the courage and be decisive. You should cut off the filibuster and this filibustering (The buzzer sounded) …
PRESIDENT (in Cantonese): Mr WONG, speaking time is up.
MR WONG KWOK-HING (in Cantonese): … should not be allowed to impede the operation of this Council and waste public money.
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PROF JOSEPH LEE (in Cantonese): President, in this debate on the Budget today, I will speak chiefly on healthcare services, such as health services for the elderly, as well as on the housing problem.
First, I am disappointed with the provision in the Budget for healthcare services. After Members have read paragraphs 124 to 128, if they can make a simple calculation, they will find out that about three fifths of the provision are spent on old items but not on new ones. Why am I saying this? Because some of the items mentioned are not new ones at all. Examples are the building of the Tin Shui Wai Hospital and the Hong Kong Children's Hospital, the redevelopment of Kwong Wah Hospital, Queen Mary Hospital and Kwai Chung Hospital. All these are old projects, without any novelty.
The largest provision is the funding given to the Hospital Authority (HA) and it has increased from about $44 billion to about $47 billion. Of course, we welcome this increase in funding, but we are worried about the situation after the increase in funding. Why? When funding for the HA is increased by some $3 billion, this is asking the HA to provide new services, new hardware and new equipment in addition to old projects like the redevelopment and construction of hospitals. If new services, new hardware and new equipment are to be provided in the existing healthcare system, there has got to be manpower as complement.
Ms Emily LAU said earlier that she would join the Liberal Party to make an appointment for a meeting with the HA or the related official agencies and demand an increase in the number of doctors. This shows that even if an increase in funding by $4 billion is given to the HA, there are not enough doctors to do the work. Apart from insufficient doctors, nurses are also not enough. Our rough estimate is that every nurse in the HA needs to look after 12 patients. According to certain more reasonable standards and those found in overseas countries, each nurse should look after six patients. The standard in foreign countries is that if in a ward, each nurse has to look after more than six patients, the ward should be closed and the patients concerned should be removed to other wards and there should be redeployment of nurse manpower.
President, I have talked about this here for as many as 10 years. But I am never tired of it. I will raise the issue again and again. According to our rough estimate, based on this international standard, apart from hiring 2 000 nurses each year, the HA has to hire an extra 2 000 nurses before the standard is met. When 9670 LEGISLATIVE COUNCIL ─ 9 April 2014 more funding is given to the HA but no increase is made in manpower to operate new services and equipment, this will only add to the workload of the healthcare personnel at the front line.
In a special meeting of the Finance Committee of this Council, I raised a question on the manpower of nurses. The reply given was, in the year of 2013-2014 just past, 980 nurses with less than five years' experience left the profession. Sorry, the number of 980 should be the number of nurses leaving the profession for that year. I got a bit mixed up. Young nurses with less than five years' experience account for 500 of the total. This means more than half of the young nurses chose to leave the HA? Is it because their work is too hard?
Certainly, this Budget does not touch on any long-term problems. But I think we must talk about long-term development this morning. Will there be a succession problem in the manpower situation of nurses? Do we have enough resources to hire more nurses and provide training for them? Now the Secretary is not in the Chamber. I think he will definitely repeat the same point and that is, the Government will undertake a manpower review. But a manpower review is not a panacea for all our ills. It is because after the review is completed, there is still a need to formulate long-term plans to train up talents. However, I fail to see any relevant provision for this in this Budget.
The Budget also mentions reopening the nursing schools. This point was mentioned in the policy addresses of the past. But that is meaningless. This cannot solve the problem of shortage of nurses in the long term. Together with the Association of Hong Kong Nursing Staff, we will hand in a formal report to various political parties in the hope that they can address squarely the problem of the shortage of nurses in addition to agreeing that doctors are in shortage. I hope that the political parties can study the problems and find out solutions. However, solving the problem of manpower shortage boils down to the question of funding. I therefore hope that the Financial Secretary can set aside resources over the long term to train up enough nurses. This can enable our public sector healthcare system to reach a reasonable and proper level of nurse manpower.
Also, a point is often mentioned and it was raised by Members this morning, namely the allocation of resources within the hospital clusters of the HA. This is a complicated problem and the point under contention now is whether or not the allocation of resources in the clusters should be based on LEGISLATIVE COUNCIL ─ 9 April 2014 9671 population or on a service-led approach. I am sure the HA is the one which knows best how its resources are allocated. Can we just put it simply that since in Tuen Mun, there are some hundreds of thousand people and so the funding Tuen Mun gets in its cluster is not enough? This may be related to service provision, an issue that should be included in the review exactly.
The Bureau now has set up a review committee for the HA to undertake a review on resource allocation in general. This is also an issue related to resources. The Financial Secretary sets aside $47 billion under the envelope system. He has the responsibility to see to it that the funding is used properly. About the funding for the seven clusters, is it based on a service-led approach? Can the funding meet the service demand in the particular districts? If the service demand for the districts can be met, there will not be the problem of patients having to wait for two years to see a bone specialist or three years for an eye specialist, whereas people living in the Western District in Hong Kong have only to wait for half a year. This causes confusion among the citizens and also a lot of inconvenience because they have to go to another district for medical consultation. This is most undesirable. It is imperative for the Financial Secretary to look into this problem after allocating this funding of some $3 billion to the HA.
In addition, I wish to raise the issue of chiropractors again. Why chiropractors? Because in the public sector healthcare system, the waiting time for an appointment in the orthopaedic department is the longest and it is the longest waiting time in any cluster. But there are chiropractors in the community. Though they are not large in number, they can provide very effective chiropractic healthcare services. I have raised this point for a long time and this first began during the time when Dr York CHOW was the Secretary. The HA should bring in these chiropractors in order to reduce the waiting time for an appointment in the orthopaedic department. However, with respect to this increase in funding amounting to some $3 billion … I have heard Secretary Dr KO say that chiropractors do not provide orthodox orthopaedic service. But I wish to say that if the Government is willing to provide additional funding specifically for the purpose of reducing the waiting time for orthopaedic service, it can work through a dedicated funding or specific funding for specific purpose approach and bring the chiropractors into the public sector healthcare system. If this can help shorten the waiting time, there is no reason why we should not go for it. So would the Financial Secretary see to it that this funding is used properly when he examines the funding?
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An important part of the healthcare funding in this Budget is to subsidize a pilot programme in colorectal cancer screening. We welcome this new idea. However, many experts have pointed out that the group which stands the highest risk of colorectal cancer is the group of people aged 55 or above, that is, about our age. However, the targets of this screening service this time are those above the age of 65. The idea behind this is obviously an attempt to find out those aged 65 or above who have contracted colorectal cancer and to provide treatment to them, instead of doing health education work and picking the age group of above 55 and giving them tests in order to reduce their risk of contracting colorectal cancer. Apparently, the aim of this funding item is not preventive but treatment-based. Can the Government think about whether any adjustments can be made to this? The aim of the programme should be preventive and it should not aim at providing treatment in the name of prevention. We should know that treatment is very expensive. President, the point is, we cannot consider the matter settled when we have spent $10 for a test. If the Government only gives tests to those high-risk age groups, that is, male aged 65 and above, and male aged 75 and above, and finds these people to have contracted colorectal cancer, but not providing matching treatment, then this will cause people to be very disappointed.
I wish to talk about another issue related to the HA, that is, mental health services. The problem has been around for a long time and now the HA has changed its approach and services are provided through case managers. We welcome this. But we have to ask, why do we have case managers? Because there are not enough community health psychiatric nurses. Hence there is a need for case managers.
However, there is also a problem with the case manager system because some case managers are nurses while some are not. With respect to their terms of reference, when the case managers conduct home visits, those who are not nurses cannot do certain things and these have to be handed over to community health nurses. Such a situation is most desirable. On top of this, there is another problem. Now the service has expanded to cover 18 districts and it is hoped that there will be 300 case managers to take care of about 15 000 serious mental patients. By simple calculation, we find that each case manager has to take care of about 50 to 60 patients and the workload is very heavy. Adding to this the delineation of terms of reference, that is, those who are nurses can do certain things while those who are not cannot do certain things, the programme is rendered less than effective. I think that when the Financial Secretary allocates funding to enhance this service, he should examine whether or not this is an effective approach.
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I have mentioned in debate on the Policy Address and in other debates that there are two types of patients who are not taken care of. The first kind is those patients suffering from rare diseases and the second kind is those elderly persons of ethnic minorities. I cannot see any provision in the Policy Address for the healthcare of these two types of patients. May be money has been given to the HA to help these two types of patients, only that we are not aware of it. This applies especially to those suffering from rare diseases. Many studies show that if those patients are diagnosed during their childhood, about 50% of such patients of rare diseases will have a much lower mortality rate and exposure to other risks. If we can formulate a policy to provide funding to help this type of patients ― of course, what I mean is a reasonable amount of funding and not as simple as assistance from the Samaritan Fund ― then we can reduce the healthcare burden presented by this group of children suffering from rare diseases. I hope the Financial Secretary can take this into consideration when he determines the provisions.
As for the health problem of elderly persons of ethnic minorities, the Legislative Council once held a motion debate on it and the motion is passed. But to date, there has been no response from the Government or the Financial Secretary and there is no specific provision for this type of elderly persons. The only kind of help they get is some professional translation service by some organizations not subsidized by the Government. This is not very helpful to them because it only helps them in communicating with other people. The problem is, since these elderly persons have a different cultural background, they may need certain special healthcare services. But these services are not provided to them. I hope the Financial Secretary can take this into consideration when he fine-tunes the provisions.
Also, the value of the Health Care Voucher is raised this time around and this increase in value is made on a permanent basis. This is really a good thing, but we still hope that the Government can encourage elderly persons to make more use of the increased value on health maintenance and disease prevention and such like areas, instead of using the sum of $2,000 for medical consultations. In the latter case, it would not be too meaningful at all.
I would like to talk more on the health problems of the elderly. On this question of health of the elderly, it is the wish of the Government to reach the goals of ageing at home and a healthy retirement life. Now the Secretary for Labour and Welfare is not in the Chamber, but I think he will say that many 9674 LEGISLATIVE COUNCIL ─ 9 April 2014 facilities have been added. It is true that hospital beds and residential places have increased substantially and this is something we are certainly happy to see.
But please remember that apart from residential places and institutional care, we hope that the elderly persons can age at home. This idea stems from the hope that elderly persons can stay at home and lead a healthy life in their twilight years. In this regard, we can see that the Department of Health has for many years not increased the funding given to health assessment for the elderly. Currently, the elderly persons have to wait for almost 28 months before they can get a health assessment in the community centres or health centres. This situation is extremely undesirable. The reason is that after the elderly persons have undergone a basic health assessment, they can know how great their risk of health degeneration is and whether or not they need any treatment or health maintenance. This can reduce the overall healthcare costs for the community. But the Government has not increased funding in this area.
Many Honourable colleagues have mentioned the problem of dental health of the elderly. On the question of dental health, the Secretary will certainly say that they have outreach teams to assist elderly persons living in homes for the aged. But please do not forget that many elderly persons do not live in these homes. Also, people aged 60 or 65 will start to have problems in their teeth, but do they have to rely on the Health Care Vouchers for dental care? These vouchers cannot help them because they cannot have these vouchers before they reach 70. Then what should they do with their teeth during these 10 years? Dental care service is not provided in the public sector healthcare system while the dentists in the private sector charge expensive fees. They do not know what to do. These are problems not dealt with by any provision in this year's Budget. I am really worried about the elderly persons. When something happens to their teeth or when they have a toothache, and so on, all they can do is to go to the accident and emergency department. This extends the queue of those waiting for treatment and it is really undesirable.
The Budget this year puts forward the idea of residential care service vouchers for the elderly. Although this is only a pilot scheme, I hope that the focus of this is not on delivering meals to the elderly, cleaning up the windows of their homes, helping them to take a bath, and so on. The focus should be on providing care and attention services at home in a comprehensive manner, which can really achieve the goal of ageing at home.
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On the topic of health of the elderly, I wish to say in the end that what we are talking about are the last years in the life of these people. And even if this sounds unpleasant to the elderly, this is a stage in life that every person has to reach. Our goal is that of hospice care at home. Now some voluntary organizations offer Celebrate Life Programmes or Celebrate Life At Home Programmes. The main purpose of these is to enable elderly persons to spend the last moments of their life in the place they know best and in the company of persons they know best. This is not just a concept, and money is needed to make it a reality. I hope the Financial Secretary will not just rely on the voluntary organizations. Instead, he should allocate funds to the public sector healthcare system to do this kind of work in hospice care at home. Apart from amending the law, a lot of manpower is needed to complement it.
Lastly, I wish to talk about housing problems. Once mention is made of rent control, the Secretary will prick up his ears and say that this is a topic which cannot be touched or consideration is needed. I do not wish to debate with the Secretary at this stage on whether or not rent control is necessary. I just wish to say that since the Secretary said that the issue should be studied or considered, can he say to the Financial Secretary, why not consider granting tax deduction for rent paid by the middle class? The Government defines middle class as people with a monthly income of $40,000. We are talking about those middle-class people who have no property and have to rent a flat. Secretary, please consider this suggestion. It would help these people. The Secretary said that the topic of rent control should not be touched and as he is here, I hope he can hear it and consider it.
Thank you, President.
MS CLAUDIA MO: Hong Kong's wealth divide ranks at the top of the world, but our Financial Secretary, the small scrooge, keeps talking about the need to save for rainy days. When people cannot even cope with today, how do we expect them to look forward to tomorrow?
Under the "one country, two systems" concept, we were supposed to be practising capitalism, that is, a free and open economy, but on many, many business fronts, we are instead seeing increasing signs of "Mainlandization". There is no such word in English, but since The Economist has started using it within quotation marks, I think it is quite acceptable now in English.
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If you just listen to stock reports on the radio on a daily basis, instead of the names of HSBC, Hutchison, CLP which we would hear in the olden days, nowadays, it is all Mainland Chinese concerns ― "China this", "China that". What has happened to our blue chips in town? It is very suspicious, is it not? And I strongly suspect that "Mainlandization" is indeed some unspoken economic policy.
One example of this is the Government's order to auction off chunks of 3G spectrum, held at the moment by other operators or service providers. The Government did that in the name of free market competition, but was it really the case? As everyone knew, the only interested party in town that would be bidding, other than the existing operators, would be China Mobile, and you call that fair competition? So much so that a right-hand man of Hong Kong's top tycoon actually made the following soundbite, and I quote: "How are we going to compete against this Mainland Chinese giant competitor?"
The second example of "Mainlandization" is what the Government has been doing to Ricky WONG. The Government has been employing attrition tactics, the battle after battle tactics, against Ricky WONG's television ventures. He wanted a free TV licence but the Government would not give him, because it is terrified that "red capitalist" ATV just might go bust. Ricky WONG wants now to operate mobile television, and the Government would do everything, anything, just to stop him. Is this fair competition? What sort of message are we giving the foreign investors? How would foreigners look at Hong Kong? Is that Hong Kong style of capitalist economy? Then, our political stability begs question to how stable we are. We need to actually discuss. Apparently, this Legislative Council has some sort of management committee. Members have had a discussion on the possibility of an occupation of the Legislative Council in Hong Kong.
What is going on in Hong Kong? The Government has been suggesting some political reform consultation. Civic nomination is demanded by the majority of the public, but the Government, toeing the Beijing line, says it is against the Basic Law. Curiously, civic nomination is a human right, but somehow, it is against the Basic Law. So, are you saying that the Basic Law is actually against human right?
Foreign investment in town would be scared of by all these factors. Our economy needs to go cosmopolitan, but no, we are shutting off as a result. The LEGISLATIVE COUNCIL ─ 9 April 2014 9677
Government is now saying that civil recommendation may be desirable. What does this mean? It means registered voters could actually recommend somebody, say "Long Hair", to the Beijing-anointed nominating committee, which has every authority to screen out that candidate's name. Do you call that true democracy? What is happening in this town? What kind of message are we sending abroad? And you call that political "reform".
When it comes to economic development, this Government keeps talking about how important tourism is to our development economically. Is that really? What problems have the Mainland tourist arrivals caused? As we all know, it has pushed up our property and rental prices. Of course we welcome tourists, it is the sheer number that is affecting Hong Kong's way of life on a daily basis. Could you listen when Gary FAN and I started talking about this issue towards the end of 2012, which is more than a year ago now? We got sarcastic remarks, very unfriendly responses, questioning if we were anti-tourism. People just cannot see the problem coming our way.
What has happened to our international tourists? Why is it that their numbers have kept dwindling? That is because it has been monopolized by Mainland arrivals. We suggested that we must keep a cap on Mainland arrivals for tourism. We suggested, we still do actually, that those tourists coming on multiple visas must be stopped. They are not here for tourism, they are here for shopping. And, what shopping? We know, it is this quasi-smuggling business that they are here for.
One big laugh should go to Mr Gregory SO, our Secretary for Commerce and Economic Development. One day, he said we should not worry about Mainland tourists in Hong Kong, and the Government would do everything to attract even more tourists. He is nuts. So, on the second day, the Chief Executive, C Y LEUNG, came out to negate what Mr Gregory SO said just one day earlier. He said the Government needs to study every impact of the problems brought about by Mainland tourists. The Government had better do it but God knows how long it is going to take. He kept talking about developing Lantau, building mega shopping malls along the border. This is fine as long as the residents would not or do not mind. But where is this "Mainlandization" process, this reliance on the Mainland, leading Hong Kong to? We are so dependant on the Mainland. What is going to happen if the Mainland tourists do not come anymore, or they are not allowed to come anymore? What is going to happen to all those empty shopping malls on Lantau? You would have 9678 LEGISLATIVE COUNCIL ─ 9 April 2014 destroyed Lantau by then. What are we going to survive on? How are we going to live on if our economy is so monopolized by one source called Mainland China?
Cosmopolitanism is supposed to be a feature of this particular city, but ethnic minorities always get neglected. Racial biases? There are plenty. Integration? Assimilation? No sense of belonging? Never mind those because they do not belong. Is it not the official mentality? They may have the right to vote ― careful though ― but we would not be sure what their allegiance, their loyalty lies. So, never mind them.
Hong Kong Unison has been fighting for years for a proper "Chinese as a second language" curriculum for ethnic minority children ― primary school students and high school students as well, but what has the Government come up with? The Government said they should learn Chinese as a second language, but at the end of the day, they would need to straddle over to the mainstream curriculum. Are you kidding? What are you talking about? We want a proper curriculum with proper examinations and academic accreditation, not just this half-hearted attempt of spending $30 million here and another $30 million there, then saying measures have been taken and we can sleep tonight.
Cosmopolitanism for Hong Kong, but our English education is more than miserable. Seriously, describing our English education as "miserable" is an understatement. Can we not stop the rote-learning approach? The Secretary for Education said there has been enough education reform in the past decade or so and we need to take a break. So, nothing is going to be done. Please, let us be honest with ourselves. Look at our young. Our university students are terrified of having to speak in English in class because they are not used to the actual usage of English. Textbook English and classroom English are fine to them, but everyday use? They are not used to that. What is wrong with learning English? It is a global language. It is not the language of the United Kingdom only and our young need to learn it properly to go around the world. However, we are not doing anything about it despite the fantastic sum of money being spent on education year after year to no avail.
Coming to press freedom, President, I am very, very skeptical of the proposed Innovation and Technology Bureau. I could not help thinking that it might just be used to help control online media and, probably, to suppress online journalism which is our "fifth estate". Meanwhile, C Y LEUNG, against his LEGISLATIVE COUNCIL ─ 9 April 2014 9679 election promise, has been evading the need for legislation on the freedom of information. He keeps blabbing about nothing when it comes to issues of the kind. And what about the archives law? How many documents, just how much history has been destroyed by this Government?
President, this Government is not to be trusted. Thank you.
MR CHRISTOPHER CHEUNG (in Cantonese): President, on the Budget for next year which was presented at the end of February, members of the public are concerned about the fact that fewer candies will be handed out when compared with previous years. Another focus of public attention falls on the philosophy of financial management put forward by the Financial Secretary, especially the report compiled by the experts and scholars in the Working Group on Long-term Fiscal Planning. The Working Group feels the pulse of public finance in Hong Kong and forewarns that a structural deficit will appear in the next seven to 15 years. It is also said that when 2028 comes, that is, 14 years later, the fiscal reserves which total $943 billion will be depleted. This is an extremely worrying situation.
(THE PRESIDENT'S DEPUTY, MR ANDREW LEUNG, took the Chair)
Of course, the public may doubt this and think that this is yet another case of crying wolf. But this is another matter. Over the past few years, the Government said that it had no money. But on the other hand, the public coffers were inundated year after year. As a result, candies had to be handed out. It is really not easy to make people believe that the state of public finance in Hong Kong will be that bad after some 10 years. Should we heed the advice of our experts and get prepared for the worst, or should we let their advice go unheeded?
These experts come from a diverse range of professions like economics, accounting, finance and actuarial science. They are top-notch people in their fields and it is like a consultation by a panel of famous doctors and a meticulous medical check-up has been carried out for public finance in Hong Kong. The result is that our financial situation in the long run is not as healthy as we have thought. It turns out that there are serious hidden ills.
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Deputy President, I do not wish to play the same tune of the Working Group and I would just want to point out that as the Working Group members have explained to the Panel on Financial Affairs this Monday, that with the ageing of the population in Hong Kong and the shrinking of the workforce, unfavourable situations as anticipated by the Working Group are very likely to emerge. If these happen, our momentum for economic growth and public revenue will suffer. Also, there is a considerable number of public expenditure items in the foreseeable future, such as the possible inclusion of kindergartens into free and compulsory education, the construction of the third runway, as well as the possible deferred retirement age for civil servants, and various welfare spendings brought about by an ageing population, and so on. Under such circumstances, it would come as no surprise that this huge amount of reserves may all be spent one day.
The Financial Secretary suggested using the Land Fund and part of the surplus each year to set up a "Future Fund". This is meant to accumulate as a contingency fund to finance strategic infrastructure projects conducive to Hong Kong's economic development in the future. Admittedly, the idea is commendable. But ordinary members of the public do not know very well what this Fund is about and what sort of infrastructure projects it will finance. So there are people who propose that the money should be used as a retirement fund. And there are also people who think that reference can be taken of other sovereignty funds and adopt a progressive approach to investment in order to earn more money for Hong Kong people. I hope the Financial Secretary can elaborate on his idea and tell us what the advantages of this "Future Fund" are. This can help forge a consensus on this early.
In any case, with this report of the Working Group, the Financial Secretary has at least reminded us of those principles laid down in the Basic Law on the formulation of public finance policies for Hong Kong. These principles are: Keeping expenditure within the limits of revenues, expenditure should be in line with productivity and low tax rates should be enforced. All these are important factors in prudent financial management. This is more so the case given the projection that the population aged 65 or above will increase drastically from the present 13% of the population to 30% of the population in 2041. And now we have a trend of going in the direction of a welfare society. In the past, it was held that taking care of the parents is a responsibility of the children, but now it is thought that the Government should take up the full responsibility. This will impose a heavy financial burden on the Government. The financial tsunami was LEGISLATIVE COUNCIL ─ 9 April 2014 9681 in part caused by this trend to spend ahead of our income. We must be vigilant of the risk.
Deputy President, at this point I come to think of the question of Occupy Central. This is because while the Working Group is worried that our economic development may suffer a lag and public revenue may be outpaced by spending, there are people who clamour for what they call democracy and want to occupy Central and paralyse our financial hub. They think that even if huge damage is done to our economy, they would not care about it.
But I wish to point out that once this Occupy Central takes place, it will severely damage our image as an international financial centre. Investors and visitors will become hesitant. The case is like Shutdown Bangkok or the occupation of the Legislative Yuan in Taiwan. These incidents dealt a serious blow to the image of the places and caused enormous financial losses. Recently, Credit Suisse Securities finished a study and compiled a report in which it is pointed out that Occupy Central will cause major damages to Hong Kong in four areas and the financial losses may be as high as $40 billion.
Moreover, this Occupy Central movement will spread to affect other aspects of people's living. This is because Central is the location of offices of many commercial firms and once traffic comes to a standstill, hundreds of thousand wage earners will be greatly affected when they go to work or leave their offices. There are also shopping malls in the district which are well-liked by foreign visitors. The Occupy Central movement will cause inconvenience to these visitors and lead to negative impacts. Also, there are numerous clinics there and the Occupy Central movement will affect the patients and may even lead to delays in diagnosis and treatment.
We can see that those advocators of Occupy Central, on seeing the occupation of the Legislative Yuan in Taiwan, were anxious to contact the organizers there. They said that they wanted to learn from them, and they also invited the organizers to come here for a lesson. All in all, it appears all they want is disturbance and chaos in Hong Kong.
Deputy President, I think this Occupy Central movement will encroach on the rule of law. This is because once civil disobedience is advocated, it is like encouraging people to break the law. If this important foundation of our society is rocked, it will definitely not do Hong Kong any good.
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On top of these, the United States is gradually effecting a credit crunch. Interest rates may rise in the first quarter of next year. The external market is volatile. Once the United States decides to raise the interest rate, there is bound to be a negative impact in the market. It is hard to figure out what will take place when the finance market becomes volatile. In that case, those financial predators will benefit and wreak havoc. It is therefore to the great disadvantage of the people of Hong Kong.
I therefore hope that those proponents of Occupy Central will think carefully, and they should not just want to achieve their own political ends to the detriment of the overall interest of Hong Kong society. I hope they can think twice about it.
On financial matters, I would like to talk about certain issues related to the industry. In recent years we have heard many pieces of good news such as the gradual opening of the Mainland market, foreign investments making their way into the Mainland through Hong Kong. The liberalization of Renminbi enables Hong Kong to become the largest offshore centre for Renminbi. The Hong Kong Government is also attracting many funds to come here and positive efforts are made in developing asset management services.
The Securities and Futures Commission (SFC) undertook a survey last year and found that the business situation of those in category C, that is, the SME brokers, had greatly improved last year. However, as I have found out after going about to gather information, the business of local traditional small and medium-sized brokers has not improved at all. This is because many China-capital brokerages have joined in as category C brokers and have taken the place of local traditional small and medium-sized brokers. And since these China-capital brokerages are on good terms with the Mainland companies, they manage to contract the listing activities of these Mainland companies in Hong Kong. And the commission for this kind of IPO is generally 2% and not the commission for stock transactions which can be as low as 0.05%. So while there is an increase in the income of those category C brokers, it is totally unrelated to the local small and medium-sized brokers. Moreover, they do not have any opportunity to take part in these IPO activities at all.
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The SME brokers want to make inroads into the Mainland market and open up new business opportunities. They waited eagerly for CEPA and every time when there was any news about CEPA, they would all give their applause. Every time we would be full of expectation. But our disappointment was likewise great. As of now there are 10 supplement agreements to CEPA. Although this means a green light is turned on for the local brokers and they are allowed to go into the Mainland, now more than four months since 1 January this year when the agreement formally came into force, there are still no details and we have not heard of anything.
Recently, there are rumours about QDII2, which is a through-train plan for capital which the industry has been waiting exasperatingly for. There may be some progress but this is only confined to small investors on the Mainland who can trade with the Shanghai Stock Exchange and the Shanghai Stock Exchange will trade with the Hong Kong Stock Exchange. But this kind of transactions bears no relevance to the local brokers. The situation is like when there is a drought in Hong Kong, people think that water from Dongjiang can save them, but it turns out that the water pipes are directly connected to the Hong Kong Stock Exchange. This means there is only water in the Hong Kong Stock Exchange but not a single drop of water for the SMEs which have supported the development of the finance industry in Hong Kong for so many years.
The Working Group has issued a warning that we have to plan for our future. We are reminded that we have to make the pie larger, so to speak. The finance industry is one of the four great pillars of the Hong Kong economy and last year it contributed 15.9% to our GDP, just a little less than the trading and logistics industries. The employees in the finance industry number 230 000 and the industry has always been a high value-added industry. So I hope that the Government can remove the barriers and relax the restrictions on the SME brokers in Hong Kong. The harsh regulations should be relaxed to create business opportunities for them and encourage the participation of SMEs. Only by doing so can this pie of the financial market be made bigger and more people employed. These will benefit the overall economic development of Hong Kong.
All in all, this Budget does not offer any big and pleasant surprise for us. But it is in line with the steady and practical style of the Financial Secretary. Of course, not everyone will like to heed a good piece of advice which may sound 9684 LEGISLATIVE COUNCIL ─ 9 April 2014 unpleasant to his ears. However, since the Financial Secretary is the keeper of the public coffers, he has the responsibility to remind us to exercise prudence in managing our money.
With these remarks, Deputy President, I support the Appropriation Bill 2014.
MR NG LEUNG-SING (in Cantonese): Deputy President, the Budget is a project which inherits the past and ushers in the future. In terms of public finance, not only is it a proposal on revenue and expenditure for that certain year, for while inheriting the past results, it also paves the path for future development, creates the conditions and plans for the future. As the continuity and stability of guidelines and policies are very important, substantial amendments are not appropriate in general circumstances. Therefore, the Government has to uphold the principles adopted in budgeting over the years, namely, it has to maintain effective fiscal management and discipline, adhere to spending within our means and commit resources as and when needed. Of course, depending on the specifics of the circumstances at different stages, the Government can make appropriate adjustments on the established foundation to cater for various economic and social needs at different stages of development. In that aspect, I now expound as follows.
First of all, when the Government is in possession of rather abundant fiscal reserves, it can make longer-term considerations and formulate stable guidelines and policies of public finance, different from some so-called developed countries which are facing fiscal deficits. The latter have to take short-term actions and even stringent measures to tighten expenditure and increase taxation. This Budget of the SAR Government is complemented by the Report of the Working Group on Long-Term Fiscal Planning. According to the views of this independent Working Group, in the long run, Hong Kong needs to develop its economy. At the same time, it needs to keep a balanced growth rate between the revenue and expenditure of the Government. This is totally consistent with the usual philosophy of the Government in fiscal management. The Report points out that there may be a structural deficit in the future. It has made a series of recommendations to solve this problem or to alleviate the seriousness of this problem. In this connection, I reckon that the four different scenarios projected LEGISLATIVE COUNCIL ─ 9 April 2014 9685 by these scholars and professionals are indeed substantiated, not shooting without aim. We can regard this as timely exhortations to which both the politicians and the public should, from the angle of risk protection, attach great importance.
The Government estimates that the balance of fiscal reserves as at the end of March this year is about $755 billion, and $220 billion of this amount is the balance of the Land Fund. This is the result of previous efforts made by predecessors. Since the value growth has been limited in recent years, it should be handled with caution. The Working Group proposes that we can consider setting up a "Future Fund" comprising the Land Fund as the base and a portion of the annual surplus as a contingency fund to finance strategic infrastructure projects. I basically concur with this kind of directional proposals and acknowledge that it is favourable to the sustainable development of the Hong Kong economy. However, it should be concretized as soon as possible and become an operational option, and this includes drawing up objectives, management policies, investment strategies, and so on. And its usage should appropriately carry vision and facilitate recovery.
According to the information, over the past 40 years, the annual expenditure of the Government generally did not exceed 20% of the GDP. However, for a period of time after the reunification, the revenue and expenditure had not been consistent in their growth rate. From 1997-1998 to 2014-2015, the accrued growth rate in total expenditure of the Government is 111.5%, and the accrued growth rate in recurrent expenditure is 105.8%, which exceed the accrued growth rate of 52.9% in total revenue and the accrued rate of nominal economic growth of 61.5% in the same period. As shown from the data concerned, it has, to a certain extent, deviated from the stipulation in Article 17 of the Basic Law that the budget should be commensurate with the growth rate of the GDP. The Working Group projects that if the public service level grows annually according to the historical trend, the real GDP growth rate has to attain 5.4% annually in order to avoid a structural deficit. And the Base Case assumes that the average annual growth rate of actual GDP from 2014 to 2041 is only 2.8%. During the meeting of the Panel on Financial Affairs on this Monday (7 April), Prof Francis LUI, a Member of the Working Group, told Honourable Members that 2.8% was a figure on the high side. In this respect, as observed from the angle of sustainable development of Hong Kong, I think public finance management should tend to be more prudent.
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The theme of the Budget this year is competitiveness. My concern is that the crux of whether the measures proposed in the Budget can really enhance Hong Kong's competitiveness lies in whether the three major factors restricting the future development of Hong Kong, namely manpower, land and population ageing, can be tackled.
Deputy President, economic performance is usually attributed to Government revenue. At the same time, it is also a crucial factor restricting Government expenditure. Hence, economic development is certainly a locomotive. Over the past 30 years, our GDP grew at a trend rate of 4.6% per annum, of which 1.3% was contributed by the growth of labour force and 3% by economic restructuring. Therefore, part of the distribution of government resources should be tilted to promoting a knowledge-based and high value-added service economy, in order to offset the adverse impact from the shrinking labour force in future as well as to boost the economic development further. From our observation of the situation in Germany, we find that it is a rather successful example worthy for our reference.
It is widely recognized that scientific research is the driving force for a knowledge-based economy. The Budget mentions "pursuing innovation and making good use of technology". This direction is right but the long-term investment in Hong Kong in this aspect is insufficient. In 2012, the total expenditure on local research and development (R&D) was only about $15 billion (including the part from public institutions). I notice that IBM's expenditure on local R&D in 2013 alone was about $48.5 billion. At the end of last month, the ex-Vice-Chancellor and President of the University of Hong Kong gave his parting words that in Hong Kong, the amount of R&D subsidy received by various universities from the Administration was far less than the amount received by Mainland universities. He said that in the existing competitive environment, the development of high-tech industries would definitely be beset with difficulties. The incumbent Chief Executive pointed out in his Manifesto that within five years, the total expenditure of the Government in R&D investment had to be increased to 0.8% of the GDP. However, we understand that that the amount of actual investment at present is still quite a distance from this target. Therefore, it is a matter of vital importance to increase R&D investment as well as improve the funding allocation mechanism. In my opinion, it is advisable to set up the Innovation and Technology Bureau as soon as possible so that the co-ordination unit can take up the responsibility of formulating a comprehensive and systematic policy on information and technology, which supports the development of a technology base and various LEGISLATIVE COUNCIL ─ 9 April 2014 9687 departments and institutions engaged in the Hong Kong brands, design and product R&D.
In 2014-2015, the recurrent expenditure on education is $67.1 billion, accounting for 21.8% of the total expenditure. This can be regarded as the item with the largest amount of expenditure in society, with an increase of nearly 80% compared with the year of reunification. This level of investment is relatively not low. Nevertheless, from the value for money angle, we have to review whether the investment is compatible with the needs of industrial development, and whether there is any mismatch. The Government should provide policy-based guidance and encourage various tertiary institutions to render support to innovative R&D and engage in self-enhancement. The Government, together with the enterprises, should provide vigorous support on the application front. With the co-operation of the Administration, the industry, the academic institutions and the R&D institutions, it is hoped that a virtuous cycle can be created and the effect of a knowledge-based economy enhanced.
Deputy President, as a representative of the finance constituency, I welcome the Financial Secretary mentioning in the Budget that professionals and skilled personnel in various sectors of the financial services industry are of vital importance to the sustained development and expansion of the industry. In this connection, the Financial Services and the Treasury Bureau will consult the industry and conduct an in-depth study on related issues, and submit recommendations to the Financial Secretary. On 4 April, the Financial Services Development Council (FSDC) published a report "Pilot Scheme for Training Courses". It shows that there is an increasing concern in the industry about the insufficient supply of middle/back-end talents. The report quoted the Vocational Training Council's Manpower Survey Report in January 2013, pointing out that the numbers of risk managers, compliance officers, and internal audit officers employed by banking and finance companies in January 2013 (at 3 324) were more than double of those in 2007. Besides, among the personnel in wealth management, the wastage rate among graduates entering such positions has been high. In view of this situation, I suggest that consideration should be given to suitably adjusting the places of tertiary institutions for a tilt to these areas.
Thanks to the long-term efforts of various parties, Hong Kong has become a world-renowned international financial centre. The direct and indirect contribution from the financial services industry is about 22% of the GDP in Hong Kong. A number of financial reforms are being undertaken in the 9688 LEGISLATIVE COUNCIL ─ 9 April 2014
Mainland which will create many business opportunities for Hong Kong. It is expected that Hong Kong can share its experience with the Mainland while also making participation and appropriate contribution. Since the Mainland is expediting its pace in the internationalization of Renminbi, Hong Kong needs to speed up the consolidation of its original first-mover advantages as a Renminbi business centre. However, we also have to note that over the past 10 years, the financial centres in various regions of the globe have been formulating and introducing new measures with a view to maintaining their own competitiveness in the long term and surpassing other centres. To meet this challenge, the FSDC as the adviser to the Government is responsible for assisting the Government in formulating an overall strategy for the financial services industry. It carries heavy responsibilities indeed. Hence, the Government should have long-term planning on the functions of financial development by making better arrangements in manpower establishment and financial resources.
Deputy President, in respect of the Budget this year, I have already consulted members of the industry and tried to understand their concerns. The feedback is positive. While they support the Government to keep on upholding the basic principle of living within our means, they also support the Government to put in efforts to boost Hong Kong's competitiveness in business as a financial centre. They also hope that the financial centre can maintain its original edge, strive for mutually beneficial co-operation with other regions and foster a multi-win situation.
Deputy President, I so submit.
DR LAU WONG-FAT (in Cantonese): Deputy President, no soon had the Chief Executive presented his Policy Address than there were rumours that he is at loggerheads with the Financial Secretary, Mr John TSANG, on financial management matters. Therefore, people from all sectors across the community and members of the public who have raised their different demands with the Financial Secretary all wanted to know what kind of a budget Hong Kong would have for this financial year and what kind of explanations the Financial Secretary would give for the decision he makes.
In the face of pressure from all quarters on easing the people's financial hardship, Financial Secretary John TSANG who has been at the helm of financial matters in the SAR for seven years seems not to be moved. All he utters are the LEGISLATIVE COUNCIL ─ 9 April 2014 9689 magic words of "living within our means, fiscal prudence, and committing resources as and when needed". He has delivered seamless strokes in close succession. In this Budget, he stressed right at the beginning that the growth of expenditure should be strictly contained, fiscal discipline upheld and sustainability of public finances ensured. Anyone who knows Tai Chi well enough must know that the next stroke is called "cross-hands", which is a defence stroke, but there is a possibility of making an attack. The Financial Secretary has practiced martial arts for many years and I believe he understands the art of making attacks and defences.
When fiscal returns are used properly and money is guarded properly, they will be beneficial to health and harmony in society. This is a blessing for the generations to come. Financial Secretary John TSANG stresses his financial management philosophy is to commit resources as and when needed, that is, striking a balance between squandering money and being a miser. On this question, different political parties and groupings have their respective views, and people from different social classes also hold divergent views.
In order to illustrate the legitimacy of his concepts of financial management, the Financial Secretary quoted in his Budget speech a warning sounded by the Working Group on Long-Term Fiscal Planning (Working Group) set up by him. The Working Group pointed out that "with an ageing population and a shrinking workforce, economic and revenue growth would decelerate; a structural deficit would be inevitable if expenditure growth outpaces revenue growth". This deficit problem will appear in seven years at the earliest.
Deputy President, I do not reject the warning effect of the Working Group report, but I will not harbour any fantasy on the accuracy of its long-term forecasts. As far back as in the British Hong Kong Administration era, I had criticized the officials in charge of financial matters that they often made wrong forecasts on surplus and deficit. After the reunification, the forecasts made on surplus and deficit in the Government are often even more inaccurate. Financial Secretary John TSANG has even made the record of having the greatest shortfall in his forecasts. When a forecast made for one year is so inaccurate, how can one expect a forecast made now will be valid after many years?
Now the fiscal reserves of Hong Kong stand at some $750 billion. I believe if the economic policies of the Government are correct, and if they do not head towards welfarism and that the problem of population ageing is promptly 9690 LEGISLATIVE COUNCIL ─ 9 April 2014 addressed, we need not be too worried that a structural deficit will appear in Hong Kong. In Western countries, the harms caused by welfarism are immense. As we all know, the most terrifying thing is that once put into practice, welfarism will only sink deeper into the quagmire and there is no turning back. In those welfare states, given the huge expenditure, they would often end up heavily in debt. When there is no other option available, the governments will resort to imposing heavy taxes and introducing new taxes. If Hong Kong is to go onto a wrong track like that, it will spell the end of the simple tax regime with low rates that we have had for so long. And for those measures introduced to boost our competitiveness, they will be rendered useless.
I am glad to hear the Financial Secretary say in his Budget speech that "Government's welfare spendings are meant to help the needy by providing them with short-term relief, so that those capable of working could re-enter the labour market, make a living on their own". But since Hong Kong has got a huge amount of reserves and it has been registering surpluses, there are troubles for the rich, so to speak. Owing to the above, there are increasing demands in society for the Government to do more in social welfare, which are inevitable. As election politics develops, can the Financial Secretary have the might and stamina to maintain this delicate balance and fend off welfarism? This we have to wait and see.
Deputy President, the Working Group is tasked to study how planning can be undertaken for public finance in order to cope with the problems of population ageing and long-term financial commitment. Last week, the authorities made a proposal on extending the retirement age of civil servants and launched a consultation exercise. It can be seen that the Government has turned increasingly concerned about the problem of population ageing. But what is regrettable is that that the Government only attaches importance to easing the problems brought about by an ageing population rather than adopting appropriate measures to address the problems at source and reduce the rate of population ageing.
The ageing of the population is attributable to more and more people becoming old and the birth rate falling continuously. Hong Kong is one of the places in the world with the lowest birth rate. If there were no tens of thousand Mainland residents coming to Hong Kong for settlement every year, Hong Kong would have long become a city of the aged. But it would not do if a society relies too much on immigrants. This is because it will inevitably bring about LEGISLATIVE COUNCIL ─ 9 April 2014 9691 many social problems. I think the best solution is to start with ourselves. I always think that the best solution is to encourage people to give birth to more children. A few years ago I suggested in this Council that an allowance for childbirth should be offered and that the functions of the Hong Kong Family Planning Association should be expanded to encourage local couples to give birth to more children and to provide the support for such.
The former Chief Executive, Mr Donald TSANG, had called on each Hong Kong family to raise three children. But it was nothing more than lip service. During the term of office of Mr TSANG, there was no measure introduced or any incentive given to complement his appeal.
Deputy President, this problem of population ageing is like a mountain crushing our heads. Financial Secretary John TSANG has said that public money should be spent as and when needed. Is there anything more necessary and worthwhile than using public money to curb population ageing and enhance the vitality of this society? It is ironical that in this Budget, the allowance for dependent parents is raised while the allowance for dependent children is not raised. People cannot help but ask: Does the Financial Secretary know the tremendous burden imposed on Hong Kong families in raising their children? Does he understand the relationship between this factor and the super-low birth rate in our society?
This is a simple argument. It is like the problem of waste treatment. A dual-track approach of reducing waste at source and proper treatment afterwards must be adopted before the best result can be obtained. The same truth holds for the problem of population ageing. The authorities should give serious consideration to formulating a number of measures to encourage childbirth, including increasing substantially the allowance for dependent children, introducing a childbirth allowance and implementing 15-year compulsory education. These measures, especially the first one, can help raise the childbirth rate and offer some concrete compensation to middle-class families which have long been treated unfairly by the Government.
Deputy President, instead of worrying about the shrinking of the workforce a number of years later as a result of population ageing, and the problem of a structural deficit, and so on, why should we not take swift and decisive actions to devise specific measures to reduce the chance of this problem emerging as well as its intensity? Of course, these specific measures entail public coffers and resources, but considering the immense impact posed by population ageing on 9692 LEGISLATIVE COUNCIL ─ 9 April 2014 society, the economy and public finance, I think these measures are absolutely justified and effective as investments and assurance for our protection in the future.
With these remarks, Deputy President, I support the Appropriation Bill 2014. Thank you.
MR YIU SI-WING (in Cantonese): Deputy President, the theme of the Budget this year is competitiveness. With the emergence of China as the second largest economy in the world and that the economies of Europe and North America have yet to recover, changes have happened in the set-up of world economy. In this new environment, we have to ponder over the question of what competitive edges we have and what are our inadequacies, and what adjustments we should make to adapt to the new order so that we can stay being competitive. This is a question we should think carefully indeed. If we are to enhance our competitiveness, the first thing we should do is to understand ourselves. Hong Kong has little land and a dense population. We have few natural resources and there are limitations on our development. For many years we owe our success to the fighting spirit of Hong Kong people, our rule of law and the free flow of information. On top of these, there can be no denying that we also benefit from the economic development and policy favours of the Mainland, such that we can make better use of our talents and geographical advantage and hence play a part in the international arena.
If Hong Kong is to sustain its development, apart from pursuing self-enhancement, we have to make good use of the advantage in resources of the nearby places. In the case of tourism, for example, last year we had a total of 54.3 million visitors. Of these Mainland visitors took up 75% and overseas visitors 25%. And among the overseas visitors, long-haul visitors took up a very small proportion, which is only 8% of the total. We have heard Members state on different occasions the hope that the proportion taken up by overseas visitors, especially those from Europe and North America, can be raised. However, if we look at the tourist resources in Hong Kong, we will find a heavy reliance on the Disneyland and Ocean Park. But such spots are also found in countries in Europe and North America. If Hong Kong just relies on the East-meets-West culture, the food and shopping, there is no way we can attract a large amount of visitors from Europe and North America to come here for spending and travel. There is no way we can make them stay longer either. If we can break our geographical limitations in perception and work together with Macao and the LEGISLATIVE COUNCIL ─ 9 April 2014 9693 major cities in Guangdong Province, if we can complement the unique character of the three places in tourism, and if we can join hands and advertise for multi-destination itineraries, so added to these the opportunities of development brought about by the commissioning of the Hong Kong-Zhuhai-Macao Bridge and the Guangzhou-Shenzhen-Hong Kong Express Rail, the overall appeal of Hong Kong will be enhanced, especially to long-haul travellers from Europe and North America. This example shows that if we were to pursue development, we must never chart a lone course. We should seize the opportunities available in regions around us in time and continuously upgrade our competitiveness in the market. It is only then that we can remain unbeaten in the world economic arena. Any advocacy for Hong Kong's independence and isolation, and resistance to co-operation with our neighbours, especially the Mainland, will only drive us down a dead end.
Deputy President, recently an Assessment Report on Hong Kong's Capacity to Receive Tourists was completed and in the face of this great surge in Mainland tourists, we can see no practical measures devised in the Assessment Report and in this year's Budget on the diversion of these tourists. Recently, the Chief Executive has agreed to study the control of the surge in the number of Mainland tourists. We hope that apart from making an assessment on our capacity to receive tourists, the authorities can also put in more resources to study the tourist districts in Hong Kong and residents affected by tourists in order to understand the tourists' shopping habits, areas of activities and choice of transportation in these districts. Scientific data should be collected to find out the problems and methods should be identified to solve the problems in a focused manner and do a good job in diverting the tourists.
In any case, as a hospitable tourist city, Hong Kong should provide a comfortable, convenient and pleasurable environment for the tourists. We must never make others mistake that we discriminate against Mainland tourists and want to select tourists. At present, many people hold different views on the excessive number of Mainland tourists. As a person born and raised up in Hong Kong, I can certainly appreciate the nuisance and inconvenience caused by the concentration of tourists to the residents of certain districts. I have always been concerned about the problem. Therefore, I have gone to places like To Kwa Wan, Hung Hom, Tsim Sha Tsui, Repulse Bay and the Lok Ma Chau border control point, and so on, together with Members of this Council from various sectors as well as people from the tourism industry, to understand the situation on a number of occasions. We hope that some practical solutions can be found. 9694 LEGISLATIVE COUNCIL ─ 9 April 2014
And with the help of relevant government departments, we managed to obtain some preliminary results recently.
As the representative of the tourism industry, I am duty-bound to explain to Members the contribution of the tourism industry to the economy and employment of Hong Kong. I will try my best to analyse the problems objectively and with facts and state the pros and cons in the hope that people from all quarters can work together to identify a solution. However, I have noted recently that some radical people have put the blame on the Individual Visits Scheme for all the problems in transport, rent, public order, and so on. These people staged protests against Mainland visitors and these activities are irrational and uncivilized. They harassed the visitors and the shops. This severely damages our international reputation. I am sure Hong Kong people understand that these are only some radical actions by a small number of people and what they do are not representative of the majority view. But this has tarnished our image as a civilized and hospitable place. I hope these people who caused the troubles can think carefully and cease doing anything to the detriment of Hong Kong.
Deputy President, the tourism industry is a pillar industry of Hong Kong, but few measures were introduced by the Government in support of the tourism industry in the last few years. In this year's Budget, we can finally see certain plans of support for the expansion and development of tourism. These plans include the launch of six plots of land in the Kai Tak Development Area for the construction of high class hotels; provisions amounting to $45 million and $50 million over the next two and three years to the Hong Kong Tourism Board on drawing convention and exhibition visitors and holding mega events; introducing 3D projection mapping technology to showcase the mega events, and so on. All these are pragmatic initiatives. I hope that the Government can continue to commit additional resources to supporting the development of tourism.
As for the artificial island at the landing point of the Hong Kong-Zhuhai-Macao Bridge, no planning has been undertaken until now. At last, a study was launched on the commercial development of the superstructure and underground space of the border control point there. It is better late than never. This is an important first step undertaken to build a bridgehead economy with the Hong Kong-Zhuhai-Macao Bridge. We welcome the Budget setting aside $60 million for a study on that. However, this is obviously belated LEGISLATIVE COUNCIL ─ 9 April 2014 9695 planning. Even if the construction works begin immediately after the completion of the study, we have to wait after the commissioning of the Bridge in 2016 before the works can be completed and the facilities open for use. By then part of the clientele from the Pearl River Delta would have been lost to Hengqin and Macao on the other side of the coast. It would be an uncertainty if the tide can be turned in our favour. I hope that the Government can learn from the experience and lesson this time around and avoid making the same mistake again.
Deputy President, on plans to take forward the proposals made by the Chief Executive in the Policy Address, it can be said that this year's Budget scores a fair pass. With respect to the development of human resources, input for pillar industries, healthcare and assistance to the elderly, the Budget has set aside a considerable amount of resources as support. This should be recognized. But with respect to the input in infrastructure and education expenses found in appendixes to the Budget, there is no increase at all. But there is even reduction. I hope that the Government can take account of the actual situation and make prompt adjustments to meet the needs of the public.
Moreover, the highlight of this year's Budget is land planning. For a long time, the shortage of land in Hong Kong has led to high property prices and grievances among the people, which is an undeniable fact. In the land sale programme this year, the Government has increased substantially the land supply to provide as many as 15 500 residential units. This amount is the largest in 14 years. With respect to mid-range and long-term planning, the Budget proposes to earmark funding amounting to $650 million in the next five years for the relevant Policy Bureaux and departments to enhance land planning. Also, the Government is prepared to fully develop the three areas near the border, namely, North East New Territories, the Loop in Lok Ma Chau, and Hung Shui Kiu. Various plans are devised to solve the problem of the shortage of commercial and residential land in Hong Kong, namely, the East Lantau Metropolis to be built on Lantau Island, the artificial island at the Hong Kong-Zhuhai-Macao Bridge and land reclaimed from the sea. This project will furnish the basis for the development of related industries and create a large amount of jobs. I hope the Government can really turn its words into actions.
Deputy President, each year when the Budget is presented, the people and various sectors across the community are concerned about what aspects of government expenditure are directly related to them, as well as whether or not positive responses are made to their demands. In order to meet public demand, 9696 LEGISLATIVE COUNCIL ─ 9 April 2014 the Government has since 2007 used part of the surplus to introduce one-off relief measures. For seven years in a row, candies are handed out. This has led to a habitual expectation among the people for these candies. In this year's Budget, not only are these candies reduced but the Government has also issued a warning that it is expected that "a structural deficit would surface in seven years' time". The criticisms made and discussions on the financial management philosophy of the authorities in the community have surpassed the concern about the contents of the Budget. Many people do not agree with the advance warning issued by the Government. They think that that since the Government possesses such a large amount of surplus, and provided that investment made is proper, fiscal deficits will not appear so soon. They think that a deficit warning is unfounded and it is an excessive worry. The Budget states clearly that "Manpower, land supply and an ageing population are the major constraints to Hong Kong's future development." These three factors really present the greatest crisis before Hong Kong. Of these factors, the most terrible is the problem of population ageing.
An imbalance in population structure will lead to insufficient manpower that will in turn undermine our competitiveness and income. Even if the economic situation is good, when there is not enough manpower to support economic development, it would be difficult to create wealth for society. In that case, there will not be enough resources to support various kinds of social welfare and a structural deficit is inevitable. In the end, the Government will land itself into a predicament from which it cannot get out. In the case of Japan, for example, in 1992 the debts owed by the Japanese Government were 66.5% of the GDP. Last year, it rose to almost 230%. There is an increase of new debts of more than 160% of the GDP in such a short span as 21 years. The chief cause for such an increase is population ageing. I hope that, for the sake of the next generation, the Government can adhere to the principles of "keeping expenditure within the limits of revenues" and "prudent financial management". Now the Government has set up the Working Group, it can gauge the financial situation of the Government and assess whether the various investments and expenditures will meet the requirement of cost efficiency in society. This would be a responsible approach to take.
Deputy President, Hong Kong faces a host of structural financial problems of an entrenched nature and they cannot be solved in a short time. Some Members have forewarned that a filibuster battle will be waged because they consider that the Government has failed to meet their requirements. I wish to advise these Members that using such a method of wasting public money and LEGISLATIVE COUNCIL ─ 9 April 2014 9697 consuming Members' time in order to exert pressure on the Government will not help solve the problems. It will only add to grievances in society. I hope these Members can think about it and refrain from doing anything harmful to others while not beneficial to themselves.
With these remarks, I support the 2014 Budget.
MR CHAN KAM-LAM (in Cantonese): Deputy President, the world economy in 2013 is described as "winter has gone but spring is yet to come". The impact of the financial turmoil on the world economy is receding and it can be said that we have left behind our backs the bleak and gloomy winter in the economy. But the economic momentum for the world is still weak and the United States, Europe and Japan are still plagued with the debt problem. The economy is inching in faltering steps.
The Financial Secretary mentioned in the Budget that revenue this year will be lower than previous years and so fewer candies will be handed out. But in such a macro environment, the performance of our economy is still encouraging. In 2013, the actual growth in local GDP was 2.9%. The export of services made a steady growth of 5.8% and this forms an important pillar for our economy. Local demand for consumption and spending by visitors are still strong, lending considerable support to the retail sector. Retail business turnover grew by 11% in 2013 and in January 2014 saw a year-on-year growth of 14.5%. The labour market is in short supply and for the three months ending February 2014, the unemployment rate after seasonal adjustments is 3.1%, which is the lowest ever in 16 years.
The fact that there can be such a good economic performance in Hong Kong is mainly due to the close ties of Hong Kong with the Mainland. Growth in the Mainland economy is the main impetus for economic growth in Hong Kong. This is actually not difficult to see because we can see that in the wake of the financial tsunami, only China can maintain rapid and steady growth in the economy. Actually, ever since CEPA was signed in 2003, the trade and economic arrangements with the Mainland have given a big boost to employment, investment and market expansion in Hong Kong.
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Ever since the reunification the Central Authorities have launched a series of measures aimed at bolstering Hong Kong, helping it to cope with the challenges and difficulties. These include concluding CEPA, expanding the Individual Visits Scheme (IVS), expanding the scope of the Renminbi business, listing of large Mainland companies in Hong Kong, promoting co-operation between Guangdong and Hong Kong and regional collaboration in the Pearl River Delta, accelerating the commencement of the major cross-boundary infrastructure projects and the strategic measures known as "36 strokes to bolster Hong Kong". All these have an important impact on the economic development of Hong Kong and improving the people's livelihood. This is evidence of the importance the Central Authorities attach to Hong Kong and their concern for Hong Kong people.
In 2003, Hong Kong was in an unprecedented economic downturn because of the impact of SARS. Many SMEs were closed and restaurants also folded one after another. Economists consider that the implementation of the IVS has served to revive the Hong Kong economy. At that time, visitors from other countries and places were still skeptical about the SARS epidemic here. But visitors from the Mainland flocked in. Over the past 10 years, they have brought $400 billion of financial benefits to Hong Kong. This accounts for the robust development of tourism in Hong Kong as well as related trades like hotel, catering, retail and transport, with a large number of jobs provided to the grassroots. As at 2010, the IVS under CEPA alone accounts for the creation of more than 54 000 jobs and companies reap substantial returns for their investment.
Honestly, the IVS has actually been a booster for our economic revival. Recently, the congestion in the Sheung Shui railway station caused by people who carried out trade in parallel goods made some people put the blame on the IVS as well as the multiple-entry permit. These people incite hatred between people from the Mainland and Hong Kong. They demand that the entry of Mainland visitors to Hong Kong should be restricted. This kind of opinion and action are most unwise. It is because any measure aiming at changing the IVS will affect the business of tens of thousand SMEs and the living of hundreds of thousand workers. What we should do now is to increase our capacity to receive visitors and improve the service quality of the tourism industry. The DAB urges the Government to make prompt adjustments in policy and increase funding so as to boost the capacity of the tourism industry and the related trades.
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Over the past 10 years, CEPA has driven the economic growth of Hong Kong. Our GDP has risen by 56% and in last year the composite growth rate was 5.1%. This is higher than the economic growth of major advanced countries like the United States, Japan, Germany and the United Kingdom during the same period.
At the initial stages of the implementation of CEPA, there was rapid growth in cargo trade between Hong Kong and the Mainland. As at the end of 2013, the value of Mainland cargo imported into Hong Kong under CEPA totalled US$7.661 billion. The amount of Hong Kong goods entering the Mainland under zero tariff has grown 10 times. This gives a direct impetus to the local manufacturing industries. Many of the well-known brands on the Mainland are made and created in Hong Kong.
With closer economic ties, the proportion taken up by trade in services is growing larger. As at January 2014, the Mainland has adopted 403 liberalization measures for Hong Kong and the number of departments opened to trade in services from Hong Kong now numbers 149, or 93.1% of the service trade departments classified by the World Trade Organization. Under CEPA, the amount of income from services as a result of Hong Kong's entry into the Mainland service trade market has grown from $1.5 billion in 2004 to an average of close to $67 billion every year during the period from 2006 to 2009. Also, the proportion of service income derived from the Mainland has been rising all the time.
As at the end of 2009, this rapid development of Hong Kong professional services on the Mainland made the Mainland the largest market for professional services outside Hong Kong. The business turnover of certain professions on the Mainland is even higher than that in Hong Kong. Many organizations in the service industries and the professionals have found a greater room of development. They have a greater chance of expanding their business in China and in employment. The additional income thus derived amounts to tens of billion dollars. It is thus evident that the opening up of the service trade market is very important to the Hong Kong job market.
The CEPA Supplement X brings new opportunities to the service industries of Hong Kong. These include legal services, financial services, testing and certification, audio-visual and communication services, and so on. The sectors 9700 LEGISLATIVE COUNCIL ─ 9 April 2014 believe that the Supplement X can strengthen co-operation of the two places in finance and facilitate investments in trade.
The finance industry and banking industry of Hong Kong also benefit from the relaxation of the requirements of doing business under CEPA. These include lowering of the requirements in asset and number of years in business for the purpose of opening branch offices. Permission is also given to enable companies to open branches within Guangdong. This expands the hinterland of Hong Kong banks on the Mainland. As at the end of 2011, local Hong Kong banks have set up nine incorporated banks on the Mainland and more than 400 branches and subsidiaries. These take up two thirds of the branches and subsidiaries of foreign-capital banks in China.
These figures show that in the 11 years since the signing of CEPA, Hong Kong economy has been forging ahead and achieving good development. The four major pillars in our economy have seen important changes. If it can recognize this fact, the SAR Government can undertake better planning in the development of the industries, thereby drawing up a design for Hong Kong economy.
Recently, there were student protests in Taiwan against the Cross-Strait Services Trade Agreement. Slogans like "Hong Kong today, Taiwan tomorrow" were shouted. Some radical people even shouted "Hong Kong is dead" and wanted Taiwan to use Hong Kong as a lesson in history. There were also people from the opposition camp in Hong Kong who staged a hunger strike in support of the students in Taiwan and what they were doing was another round of the so-called "de-China" movement.
It is not that these people are unable to see the advantages brought about by the liberalization of the services trade. What they did was to make use of the occasion and incite conflict between the two places. With the opening up of service industries in China, a good opportunity is offered to the world economy and many countries would want to seize this opportunity. For the past 10 years, China has given all kinds of concessions to Hong Kong through CEPA and these have provided job and investment opportunities for the professions in Hong Kong and other trades. Many countries are simply envious of Hong Kong for such concessions.
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It is not the first time the opposition camp tries to uglify the concessions given by the Central Authorities to Hong Kong. This includes slandering the National Twelfth Five-Year Plan as a move in which Hong Kong is forcefully included in the planning, that the Express Rail Link is an attempt to speed up the process of Mainlandization of Hong Kong, and the 36 concessions for Hong Kong being sugar-coated cannonballs. The IVS is smeared as occupation by locusts, hence the so-called movement to drive out locusts was initiated to attack Mainland visitors. All of these are attempts made by the opposition camp to smear maliciously those measures adopted by the Central Authorities to support Hong Kong. The idea behind these moves by the opposition is that if only conflicts are provoked between the two places and worries are aroused among the people of Hong Kong about communist assimilation, then these concessions granted by the Central Authorities would become bad things. Then they can undermine the prestige of the Central Authorities and the SAR Government.
In fact, this slogan of "Hong Kong today, Taiwan tomorrow" is not a warning but an encouragement for Taiwan. Hong Kong today should be the goal which Taiwan should strive for in future. Back in those days, South Korea, Singapore, Taiwan and Hong Kong are called the Four Little Dragons of Asia. But now the economy of Taiwan cannot be compared with that of Hong Kong or Singapore. The main reason being the degree of economic liberalization in Taiwan is far less than that of Hong Kong or Singapore.
Some people say that if Taiwan can solve the problem of the Services Trade Agreement, the GDP of Taiwan in the next five years can be increased by more than 35%, that is, a growth amounting to more than US$120 billion. If Taiwan decides to retract on the Agreement and start the negotiations all over again, it will have to face an economic slowdown and lose economic growth valued at more than US$100 billion. If the people there harbour an isolationist mentality and further marginalize themselves, then Taiwan tomorrow will certainly be much worse than today's Hong Kong. The merging of the economies of the world is the dominant trend and so Hong Kong should guard itself against this kind of isolation and the wrong notion of "de-China" in its economic development.
As compared to "Hong Kong today, Taiwan tomorrow", we are more worried about "Taiwan today, Hong Kong tomorrow". A trade agreement should be an economic issue but politicos with malicious intent have elevated this 9702 LEGISLATIVE COUNCIL ─ 9 April 2014 into a political movement. What we should really guard against is this kind of "democracy a la Taiwan" which is devoid of reason, confusing right with wrong and a destruction of democratic procedures and disregard of the rule of law, and which plunges the government into paralysis.
The democratic camp in Hong Kong plans to filibuster in the examination of the Budget. This is aimed at creating a financial crisis, and it is a good demonstration of their intents. The opposition camp has sent people to Taiwan to observe the Sunflower Movement. They want to learn from it and prepare for Occupy Central. They try to resort to a radical mass movement and undermine the stability of our economy and peace in our society. All this is done to achieve their political objectives. It is worrying.
The democratic camp always likes to say that a government cannot govern a place when there is no democracy. Also, it says that provided that there is democracy, a government will have a popular mandate of credibility. We need only look at the situation in Taiwan and Thailand to realize that democracy is not a panacea to problems in society. If we ask MA Ying-jeou or Yingluck, we can get a true answer and that is: it is not easy to govern a place even when there is democracy. As Prof Francis LUI has said to this effect, in a divided society, a democratic system cannot be expected to function well. The party which loses in an election will not admit defeat and it will try every means to disrupt the administration of its opponents. It will initiate some mass movements from time to time for election results are considered invalid by it. Such is the true picture of democracy.
Deputy President, I so submit.
DR PRISCILLA LEUNG (in Cantonese): Deputy President, "one failing to consider the posterity is incapable of considering the present, and one failing to consider the whole situation is incapable of considering a single aspect". In the Budget this year, efforts are made on various aspects to achieve some breakthroughs. However, all budgets should make both long-term and short-term considerations. In respect of long-term considerations, the purpose is comparable to taking Chinese medicine to maintain good health and tone up the body, through which the Hong Kong market can develop healthily without causing significant side-effects to society and the market. As for the short-term LEGISLATIVE COUNCIL ─ 9 April 2014 9703 objectives, the purpose is comparable to taking Western medicine to solve the immediate problems. However, some tactics, like tax increase, cannot be used extensively, for an overdose may cause side-effects on the market.
As such, in considering the long-term and short-term objectives of the Budget, I like to ask the Financial Secretary one question ― regrettably, the Financial Secretary may be having lunch and cannot hear this question in the Chamber, and I recall that he was not in the Chamber at this time last year. Last year, I asked him that question in this Chamber. This year, I ask him once again: What does he want others to remember him of for his seven-year tenure as the Financial Secretary? Among the Financial Secretaries of the previous terms, Henry TANG had to eliminate deficits and Donald TSANG had to "fight the predators". In the past, Ms Margaret THATCHER was famous for adopting the "small government, big market" principle. Then what does the Financial Secretary want people to remember him of? The Financial Secretary can be considered lucky, touch wood, that things have been going on smoothly during his tenure and he has the capacity to give away "cash handouts". What does the Financial Secretary want people to remember him of? He has a five-year term. He does not have to make some groundbreaking achievements. Neither do we want to see great storms and turmoils. Therefore, the most desirable approach is to implement some practical and achievable targets.
I would like to raise three little wishes with the Financial Secretary. First, I wish that he will be geared towards the target of raising the percentage of the middle class in Hong Kong from 30% to 50%. In the long term, at least in the several years to come, all policies should be directed towards this target. What does this target mean? First, the authorities should assist people now in the middle class to prevent themselves from falling into degentrification. The authorities should ensure that the middle class will not become proletariat, and they will not be excluded from the definition of the middle class because they can no longer maintain their present living standard. Moreover, they should be spared of having to live on Comprehensive Social Security Assistance (CSSA), which will not only increase the burden of society but will also be extremely distressing to the persons involved. Second, the authorities should lift the poor out of poverty, so that they will emerge and become the middle class, thereby increasing the percentage of the middle class in the population to 50%.
Here are some figures for comparison. At present, only 30% of the Hong Kong population is in the middle class, but the percentage in the United Kingdom is 46%, in the United States it is 51% and in South Korea it is 53%, which means 9704 LEGISLATIVE COUNCIL ─ 9 April 2014 the percentage of the middle class in Hong Kong is relatively low. Why did I mention this percentage? The middle class provides the force for maintaining the stability of society, economy and politics. They have to take care of the daily needs of the elderly and the next generation. Besides, the middle-class people have all along been self-reliant. They pay tax yet they seldom depend on the assistance of society. For this reason, increasing the percentage of the middle class in the population will do all good but no harm to Hong Kong society.
According to the figures indicating the current fiscal reserves, the recurrent expenditure of Hong Kong is $22.3 billion at present, and an estimated consolidated surplus of $9.1 billion will be recorded. How will this great sum be spent? All the issues mentioned earlier should be linked to this target, and the second short-term target is medical services.
In the past few years, I have heard disagreement among colleagues in this Chamber, stating that capitalism had been proved impractical, particularly after the Lehman Brothers' incident, where the system in Hong Kong had to undergo a major surgery and reform. In my view, a minor surgery and small reform is acceptable. Generally, I have reservations about any major surgery or major reform, particularly in the case of Hong Kong which is subject to constitutional restrictions. Articles 107 and 108 of the Basic Law stipulate that Hong Kong shall not implement socialistic system and policies, and shall maintain the capitalistic system unchanged for 50 years, fiscal balance and the low tax policy. Therefore, Hong Kong should ensure the continuous development of the capitalistic economy under "one country, two systems", whereas one of the requirements for constitutional development is to maintain an environment favourable for the development of capitalism in Hong Kong. As such, we must ask how to spend and how to make money. One of the major causes of concern is the ageing population.
By 2041, nearly one out of every three persons will be a senior citizen, and one out of eight will be in the late years, that is, elderly aged over 80. Regarding the expenditure on public medical services and the medical expenses to be borne by the elderly, I have heard the many views expressed in the community that this may be one of the causes leading the middle class to become the proletariat. According to some friends in the medical sector, all people will spend nearly half of their savings on medical expenses during their retirement. In the face of the enormous expenses on medical services, can Hong Kong afford more spending? LEGISLATIVE COUNCIL ─ 9 April 2014 9705
I have just talked about how to make and how to spend money, have I not? The welfare expenditure of last year was 13.9% and is expected to reach 15.1% this year. I think this percentage is still relatively low, so we should spend more in a focused and wise manner.
I think it is most worthwhile to spend on public medical services. Particularly, we should seek to ensure that the planning of the overall healthcare system will cope will the following objectives. First, to facilitate young people in taking out medical insurance for their parents, and second, to facilitate retirees who may not have children in continuing to pay their medical insurance premiums, so as to alleviate the burden on the public sector healthcare system. In respect of the healthcare system on the whole, I am most willing to spend on the medical system, be it on manpower, supplies or needs in other aspects, including the Drug Formulary, for these are the areas which the public are most willing to receive assistance from the Government in their struggle for survival and staying healthy in daily life.
Moreover, medical expenses are expectable. Based on the earlier estimate about the number of elderly in 2041, we will have many "silver hair" consumers by then. Indeed, we may consider encouraging them to return to society by creating certain job types for them, so that they may form part of the labour force and continue to earn some income for themselves. Certain elderly people are not old indeed. They are still very capable when they go into retirement at the age of 55, 60 or even 65. This is particular true for intellectuals with a higher educational attainment or people using brains, whose capabilities can be put into use further. For instance, they can serve as consultants ― the Secretary is now in the Chamber ― or even take part in the recent discussion on the setting up of schools for children of Hong Kong citizens in the Mainland. This kind of intellectual labour should be fully utilized, and they can earn some money for themselves too.
In the long term, I think the Government must spend a certain amount of money on the employment of a group of experts in economics to examine the possibilities of industrializing certain projectable long-term expenses, including elderly care services and medical services. In fact, these expenses will keep increasing and will not drop, and the amount incurred will be enormous. It is estimated that these expenses will be irrecoverable. According to the existing policies, there is definitely no way to recover such expenses in future and the public will have to rely on public sector medical services. The Government 9706 LEGISLATIVE COUNCIL ─ 9 April 2014 should identify ways to industrialize certain so-called long-term expenses, developing them into a source of regular income basically, so as to offset the expenses incurred. If the Financial Secretary can achieve this within his tenure, I think he would have done us great benevolence.
The third long-term target is to reduce the unpleasant stench coming from the seawater in the Victoria Harbour. Indeed, this is the second time I bring forth this objective, and I earnestly hope that the incumbent Financial Secretary will be more open-handed and allocate a handsome provision for this purpose. Recently, I wrote to the Marine Department, the Environmental Protection Department and the Drainage Services Department, and so on, in my capacity of an average resident and citizen, for Kowloon West, where I live, as well as the waterfront in Tsuen Wan and Ting Kau, are filled with a disgusting stench which people jogging will smell. For a few years, my family members have been comparing me to the girl selling flowers, who can only have bamboo leaves at home, for I am only concerned about issues involving Kowloon West. They thus asked me to help residents in New Territories West. So I wrote a letter to lodge my complaint and urge the authorities to do an on-site inspection.
I fully support the existence of waterfronts. These places are beneficial to the people's livelihood, which are an extremely healthy choice for the elderly and young people to go to. But if the air quality is poor, as in the case of Kowloon East where the air is filled with the smell from the exhaust of cruise liners, it will be undesirable. I have heard masters of Qigong and Taichi say that their health would worsen after working out in such an environment, and they would rather exercise indoor in an air-conditioned venue. Is this a waste of the most precious resource of Hong Kong? In the 51st paragraph of the Budget this year, it is said that the sewage treatment scheme on Stonecutters Island has cost $8.3 billion in Stage 1 and $17.5 billion in Stage 2. Yet this is only a recapitulation of a previous measure rather than a new initiative, so I will not accept this. I hope the Financial Secretary will provide more resources for this purpose. Water generates wealth. The poor or the wealthy, the inferior or the respectable, men or women, or the young or the elderly alike will all give a big applause to such an initiative, for this is good for the health of the community and conducive to reducing public medical expenses.
I would like to raise another point in passing though it is not directly related the issue under discussion. To many friends living in the coastal area, including the residents of Kowloon West, Hung Hom, Whampoa, Tai Kok Tsui LEGISLATIVE COUNCIL ─ 9 April 2014 9707 and Kowloon City, they are affected by the cessation or fare increase of ferry services at present. In fact, we hope that during the development of waterfronts, the Government will provide policy support to assist ferry services worthy of retention. Ferry service means more than the collective memory of many Hong Kong people, for it is an extremely desirable option for alleviating traffic congestion from the perspective of environmental protection and resource utilization. Once again, I urge the Government to consider this option seriously.
Deputy President, just now, I said I hoped that given the financial strength of Hong Kong, the Financial Secretary could fulfil these three little targets of our wish. In respect of short-term expenses on the people's livelihood, I think the Budget this year has actually taken a step forward in terms of the poverty alleviation policy. For instance, increasing the value of elderly healthcare vouchers to $2,000, constructing a Chinese medicine hospital and a children hospital, providing a low-income family allowance, increasing scholarships and providing a concessionary fare scheme of $2 per trip, and so on. I have to give special commendation to him for encouraging development in "blue collar" industries. I would like to share an experience of mine.
The bone-setter whom I consult has two sons who have just finished their senior secondary education. I witness the growth of these two boys. Recently, the bone-setter told me happily that he would soon retire though he was not yet 60. He said his elder son, who was not yet 30, was giving $20,000 to his mother monthly to support the family. His son is a blue-collar worker. He joined the construction industry right after graduation to learn about the trade while working, and he later became a contractor. This successful example tells us that blue-collar workers have prospects in Hong Kong. I asked him how much his son could keep for his own after giving the $20,000 to support the family. He said his son was earning $60,000 to $70,000 monthly, yet he has only six to seven years of experience in the industry.
In view of this, I think we should promote blue-collar jobs as a way out. This option does not only encourage young people to make handsome incomes but will also give them hope. Young people will see that there is hope no matter they join the construction industry or start their own businesses. I think one of the measures proposed this year is worthy of support, that is, the setting up of a "Future Fund" comprising the Land Fund and a portion of future surpluses. The authorities should continue supporting young people in starting their own businesses, employment, home purchase and further studies, which should be 9708 LEGISLATIVE COUNCIL ─ 9 April 2014 complemented by support from the business sector in managing finance and personal ties. Moreover, I would like to talk about unemployment and restructuring. I hope that the "Future Fund" will at the same time consider a group aged over 40 who are now unemployed, for they have failed to hold on during the economic restructuring and dare not tell their friends about their unemployment.
Finally, I would like to talk about the Pilot Scheme for Arbitration on Land Premium mentioned in the Budget this year. I think the Scheme should be further expanded rather than being confined to issues relating to land premium. I hope the Government will seriously consider extending the arbitration service platform to cover disputes involving other daily and livelihood concerns. Access to the platform should be provided to the grassroots in particular for settling their disputes, including disputes with owners' corporations, compulsory sale and other livelihood issues they often come across.
Lastly, the Financial Secretary's attitude of being alert to adversity in times of prosperity is good. However, I hope the Financial Secretary will not be called a skinflint after his retirement from office in future. Therefore, I hope that when the Financial Secretary presents his achievements in future, people will remember his effort and achievements. These should include: First, improving the water quality of the Victoria Harbour, so that residents in any district in Hong Kong will be grateful to him. Second, increasing the percentage of the middle class to 50%, and I implore him to propose more solutions to the Chief Executive. Third, ensuring that the future expenditure approach will carry on the past heritage and open up the future. In other words, he should examine ways of spending in a systematic manner in the long term and think about ways of making money by identifying opportunities to introduce industrialization to areas entailing expenditure. I hope the Financial Secretary will seriously consider these three little targets.
At last, I express my support for the Budget and oppose filibuster in any form, hoping that the Budget will be passed as soon as possible. I so submit.
MR CHEUNG KWOK-CHE (in Cantonese): Deputy President, before coming to the Budget this year, I would like to talk about the Report of the Working Group on Long-Term Fiscal Planning (Working Group). Since the title of the LEGISLATIVE COUNCIL ─ 9 April 2014 9709
Report includes the term "long-term" and "planning", it makes the direction of the Report attractive, which is extremely important to the future development of Hong Kong.
One of the recommendations made in the Report is that the Operating Account and the Capital Account of the Government should be segregated, stipulating that operating expenditure should not exceed 90% of the operating revenue, whereas the expenditure of the Capital Account should not exceed the capital revenue. The Working Group pointed out that the recommendation seeks to restructure the fiscal discipline of the Government. However, the analysis made by the Ming Pao Daily News subsequently pointed out that based on the recommended criterion, in 10 out of the 17 financial years since the reunification in 1997, the expenditure under the Operating Account exceeded 90% of the operating revenue. In other words, the Budget this year will not meet the said criterion either.
Broadly speaking, expenditure of the Government is public expenditure. Regarding the public expenditure of Hong Kong, welfare expenditure has been under the curse of "dying in a car crash" over the past 20 years, finding no room of development. When this recommendation to restructure the Government's fiscal discipline was announced, the welfare sector on the whole considered that the Government is trying to cap the expenditure on welfare services of the broad sense. It is also recommended in the Report that capital expenditure should only be met by capital revenue or by means of loan and financing. I am very much worried that our hope for small-class teaching and 15-year free education will perish, the expenditure on healthcare services will be further tightened, there will be privatization of the services, and the plan to increase public housing construction will come to a halt.
Regarding the objective of so-called "restructuring the fiscal discipline of the Government", I support this in some measure. The word "restructuring" induces in me some hope, and I think it is indeed necessary to correct the Government's present spending pattern of putting political motives first. However, the mechanism of "avoiding fiscal deficit being the priority" is too conservative. Under the mechanism, recurrent expenditure will remain very stable, meeting the requirement of the Basic Law of keeping the expenditure within the limits of revenues. As for the expenditure on infrastructure, I believe the Government will resort to loan and financing when it is necessary.
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However, in respect of welfare needs, I do not believe the Government will take out loans for development. As a result, either no development will be pursued, or it may expand the scale of privatization of welfare services currently. No matter which way it turns out, it will deal a fatal blow to protection for the living of grassroots in Hong Kong. I remind the Government that if it takes this path, it will only intensify the polarization of the rich and the poor in Hong Kong, and society will be more vulnerable to unrest. The co-workers in the welfare sector and I will oppose it vehemently.
First, the Budget this year reflects an over-reliance on the financial, tourism and service industries of the economy of Hong Kong. I propose that the Government should expeditiously examine ways to promote the development of high value-added industries and commercial undertakings rather than focusing on a single area. Second, the Budget has proposed many measures that can undeniably cater to the needs of the grassroots better. The proposal to introduce the low-income working family allowance eventually is one of the examples. I recalled that when Chief Executive LEUNG Chun-ying presented the Policy Address, he described that the Government would spend "lavishly" on poverty alleviation measures this year, so the Budget will have to render support, of whatever scale, to those measures.
Certainly, these relief measures are practical to the grassroots, yet I hope all the more that the Government will be sincere and willing to undertake its responsibilities in addressing the problem of disparity between the rich and the poor and to make continued efforts in this aspect.
Last year, the Hong Kong Council of Social Service published a report, pointing out that the problem of elderly living in poverty had further deteriorated. Among the population in poverty in 2012, the number of elderly aged 65 or above who were living in poverty accounted for 33.4%. The elderly population in poverty has exceeded 300 000, which means one out of three elderly people is living in poverty. If the Government does not solve the problem of ageing and growth in poverty population of Hong Kong system-wise, but continues to offer various kinds of allowances or concessions to deal with individual problems, it will only fail to put out the fire with a drop of water in the bucket.
Once again, I urge the Government to introduce a universal retirement protection scheme as soon as possible, and I urge the Government to adopt a long-term mindset in solving problems, to look far ahead and aim high. Take LEGISLATIVE COUNCIL ─ 9 April 2014 9711 the present long-term housing policy which only projects the housing production for the next 10 years as an example. It seems to be planning of a relatively long term, yet regarding the importance and complexity of the issues to be planning of handled, and the early satisfaction of the housing demand of the public, the policy is still inadequate.
The Budget follows the direction of the Policy Address. I would say that the focus of finance management remains the same as that in the past decade. The authorities only attach importance to the overall development of the economy but overlook the significance of fiscal policies in redistributing wealth in society and narrowing the disparity between the rich and the poor, and disregard social quality. On the whole, the people's livelihood is still neglected in the main theme of the Budget this year.
In fact, the Government should have known that the approach presuming "the livelihood of the public in general would improve when Hong Kong's development as a whole improves" over the years is wrong. According to the figures in the past many years, the overall economic development of Hong Kong has been prosperous and Hong Kong has been the most competitive city worldwide. However, the problem of disparity between the rich and the poor in Hong Kong has been worsening over the years. According to the Crony Capitalism Index of the Economist of Britain, Hong Kong continues to rank the first in the world in collusion between the Government and the business sector. Once again, I urge the Government to stop using the excuse that people's livelihood will improve by maintaining economic development. It should stop fooling the public with the trickling-down effect theory which has been proved invalid.
Regarding one of the so-called highlights of the Budget this year, that is, the "Future Fund", a few years ago, some scholars put forth a specific proposal on a fiscal stability fund, yet the Government has not responded in any way so far, losing tens of billion dollars of surplus in the past few years, which were spent on handing out "candies". I all along support the direction of examining the possibility of setting up a fund with the surpluses, yet the Government must state clearly how these surpluses will be set aside and allocated to the "Future Fund" and the specific details in differentiating earmarked fundings for specific purposes and projects. It is better to make the rules clear at the beginning and be lenient afterwards. I am extremely worried that the Government will take 9712 LEGISLATIVE COUNCIL ─ 9 April 2014 advantage of the arrangement to curb its expenditure on social services to create a surplus to be allocated to the "Future Fund", which the Government can use arbitrarily, and the "Future Fund" will eventually be reduced to "a piece of fat meat" for consortia.
The Financial Secretary has only proposed the setting up of the "Future Fund" to address the so-called "structural fiscal deficit" problem, yet he has not mentioned the consideration of reforming the tax regime. I have mentioned repeatedly that the current profits tax rate of 16.5% in Hong Kong is extremely low in the international community. Under the tax regime in Hong Kong, a progressive rate is not adopted. For a "king worker" earning tens of million dollars a year, he will be paying salaries tax at the standard rate of 15% as other wage earners earning about a million dollars or several hundred thousand dollars. LI Ka-shing can pocket all dividends amounting to $7 billion a year, which again reveals the ridiculous reality of capital income from stock and real estate speculation not being subject to capital gains tax.
Actually, the tax regime in Hong Kong is extremely unfair. If the Government increases the profits tax rate by 1%, expand the tax bands, levy tax on large-amount dividends or impose sales tax on luxurious commodities, the Government will receive a considerable amount of recurrent revenue. By then, it does not have to rely excessively on the proceeds from land sales. The Government may adjust its high land price policy to lower land prices, property prices and rental, so as to assist first-time home purchaser to improve their living conditions. If so, the tax regime of Hong Kong will effectively fulfil the purpose of redistributing wealth and upholding social equality. Moreover, the lowering of land prices and property prices will improve the business environment, which will be particularly favourable to the survival and development of small and medium enterprises, as well as the creation of employment opportunities.
Ageing population and increase in welfare expenditure may in fact be viewed as an opportunity for the community as a whole to review the tax regime, so that the finance of the Government will become more stable and healthy, to further fulfil the purpose of redistribution of wealth.
Before I come to the issue concerning the elderly, I would like to pointout first that in the 31st paragraph in the chapter titled "Hong Kong's Competitiveness", the Financial Secretary stated clearly that an ageing population LEGISLATIVE COUNCIL ─ 9 April 2014 9713 is one of the three major constraints to Hong Kong's future development. In the section titled "An Ageing Population", he only proposed certain improvement measures for elderly services, stopping short of setting the tone for the elderly problem.
We notice from the above that the perspective of the welfare sector concerning population ageing may not be fully consistent with that of the Government. When I heard the Financial Secretary say that an ageing population would constrain the future development of Hong Kong, I felt quite uncomfortable. I hope the Government will understand that the elderly have made great contribution to Hong Kong and society should reward them and enable them to live peacefully in their twilight years. They should not be regarded as a burden to Hong Kong when they approach senility. The Government should be more humane and creative in addressing the elderly problem in Hong Kong, so as to develop the talents of the elderly and bring their strengths into full play, such that they can continue to make contribution to society.
It is said in the Budget that $61.9 billion will be spent on social and welfare services this year, which represents an overall increase of 11.5% in comparison with the expenditure last year. Certainly, we all know that a significant part of the expenditure will be spent on Comprehensive Social Security Assistance (CSSA), "fruit grant" and the Old Age Living Allowance, expenditure items which will definitely increase. The actual amount spent on elderly care services is only $660 million, of which $85 million is used for providing 550 additional subsidized residential care places for the elderly, and $35 million for the purchase of 400 residential care places from elderly home in the Mainland. A total of 1 171 additional subsidized residential care places will be provided this year, so adding to this the places added under the plan last year, there will only be around 1 600 residential places.
However, there are 24 000 elderly persons waiting for care and attention home places at present, and the waiting time is as long as 20 months. As for nursing home places, the waiting time is much longer, which is 37 months. There are 6 373 elderly persons waiting for nursing home places and several thousands on the waiting list die before they are allocated a place. It is obvious that the newly added residential places can in no way meet the demand. In fact, persons with disabilities are also waiting for residential places and they face similar difficulties. The Government should introduce a living allowance for 9714 LEGISLATIVE COUNCIL ─ 9 April 2014 carers of persons with disabilities to alleviate the financial burden of families with persons with disabilities.
The specific relief measures proposed this year are somehow routine. It seems that the Government has stopped considering whether the measures can really alleviate the predicament of the grassroots. For instance, it was announced in the Budget that recipients of CSSA, Old Age Allowance, Old Age Living Allowance and Disability Allowance would be provided with an extra allowance equal to one month of the standard rate, or a double-pay so to speak, yet what is the rationale for granting an extra one-month allowance? How much can it help the grassroots in solving the difficulties they encounter in their daily life? Is it merely some sort of window dressing, demonstrating to the public that the Government has done something?
Indeed, social workers know that the one-month extra allowance is definitely better than nothing, yet it certainly cannot alleviate the pressing demand of the grassroots. Take CSSA as an example. Today, the Government is still using the living standard in 1996, nearly 20 years ago, as the reference for setting the CSSA payment, which is completely out of pace with our present life, causing families living on CSSA to constantly lead a substandard life. Even though the payment will be increased by 1% or 2% occasionally, it lags far behind the cost of living index. Besides, the so-called "double-pay" arrangement is not a permanent measure, which is offered only occasionally.
Once again, I urge the Government to first review the CSSA system and, prior to the completion of the review, discuss with the welfare sector on setting a monthly allowance of a fixed amount based on the existing CSSA payment
Deputy President, many references were made in the Budget to the economic policy of Hong Kong. I think it would be more appropriate to rename it as a "policy proposal on the economy". I implore the Government to focus on raising the standard of living of the people and make it the premise in its consideration of economic policies in the future. For example, reference should be made to the relevant international covenants, guidelines and visions of the United Nations in the Government's omnidirectional co-ordination of the formulation of housing, healthcare, education, social welfare and home affairs policies. Taking the elderly people as an example. The Government should proceed from the angle of increasing the supply of public housing units to enable the elderly to age at home and undertake planning for out-patient and specialist services in the light of population information and needs of society. Moreover, LEGISLATIVE COUNCIL ─ 9 April 2014 9715 it should carry out planning for the provision of more cultural and recreational facilities in the communities, increase the vigour of facilitating and promoting the development of elderly people and enable the elderly people to make use of their capabilities to serve society.
Deputy President, I so submit.
MR CHUNG KWOK-PAN (in Cantonese): Deputy President, competitiveness is the theme of the Budget presented by the Financial Secretary this year. In fact, everyone is aware that the competitiveness of Hong Kong is dropping, and the business sector is deeply worried about this. I look forward to the Financial Secretary's proposal of more concrete solutions in the future in a bid to enhance our competitiveness overall.
In fact, I believe the construction of a third runway, if materialized expeditiously, is definitely a project that can enhance the competitiveness of Hong Kong. A very good example is, without the construction of the Chek Lap Kok airport in the 1990s, I do not know what would have become of the economic development of Hong Kong today. The development of a third runway, if materialized expeditiously, can definitely pull the economic development of various sectors.
The Budget proposed to support the innovation and technology industry and looked forward to the early establishment of the Innovation and Technology Bureau as proposed in the Policy Address. I believe the public at large support the development of the innovation and technology industry, yet our final decision will hinge upon the specific details to be released by the Government in the future. A comparison between Hong Kong and foreign countries in terms of the resources dedicated to the innovation and technology industry shows that currently, our input is only 0.7% of our GDP, or several billion dollars, which already includes the expenses on providing subsidy to universities. This ratio lags far behind other countries as developed as Hong Kong, which on average dedicate 2% to 3% of their GDP to the development of the innovation and technology industry. In other words, should we want to boost the development of our innovation and technology industry, an investment of at least $3 billion to $4 billion per annum is appropriate and necessary. Can the Government make such a commitment?
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In addition, the Financial Secretary mentioned in paragraph 102 of the Budget speech that the Government will render appropriate assistance to industries with potential for further development, including the fashion industry. Both myself and the trade are glad to hear this and we find this remark encouraging. However, the Financial Secretary fell short of elaborating what actions the Government will actually take and what specific measures it intends to roll out. He only made the general remark that the Government will render appropriate assistance. I hope the Government can speedily propose concrete measures to help industries with potential move ahead.
As at March this year, the Government has fiscal reserves standing at $745.9 billion. Given that the Treasury is still "flooded", the Government should allocate more resources to promoting the development of industries and make long-term planning for our economy. Small and medium enterprises (SMEs) eagerly look forward to seeing concrete actions and specific measures from the Government to support the development of various industries. The motion on "Encouraging the return of the industrial sector for development to make Hong Kong's industries more diversified" moved by me last month was extensively supported by Members from various political parties and sectors. It shows that the Government is duty-bound to promote the development of various industries in Hong Kong.
Besides, the Budget has proposed seven measures to lend support to SMEs through financing, market expansion, brand building and productivity enhancement. Nonetheless, five of these measures are an extension of existing policies, for example, extending the application period for the special concessionary measures under the SME Financing Guarantee Scheme, continuing the implementation of the Small Business Policy scheme and the Hong Kong Mortgage Corporation Limited's Microfinance Scheme, and extending the network of the Design Gallery.
The remaining two relatively new measures are "earmarking $50 million to support retailers on a matching fund basis for the use of IT and other technology solutions to increase productivity"; and "promoting cloud computing applications among SMEs and providing training to help them adopt appropriate and affordable IT solutions". However, these support measures are inadequate indeed in the light of the harsh operating environment and changes in the global economy faced by SMEs.
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Apart from inadequate support to SMEs, the Budget proposes to cut instead of increasing support for the middle class, thus many members of the middle class find this very disappointing. The Policy Address delivered by the Chief Executive earlier on handed out "candies" to the grassroots generously ― of course, we absolutely support this as some members of the grassroots do need assistance ― but this Budget does not provide any support to the middle class.
We do not expect the Financial Secretary to hand out excessive "candies" to the middle class, we only wish that the support measures for the middle class can be more or less the same as those of last year. In this Budget, the Financial Secretary only proposed to slightly raise the allowance for a dependent parent or grandparent and the waiving of rates will be subject to a ceiling of $1,500 for the first two quarters, as compared to last year's tax rebate of $10,000 and waiving of rates for a full year. In fact, housing and education for children are two major expenditure items for the middle class, yet the Government does not provide any subsidy for these. It has even abolished the electricity tariff subsidy. This cut instead of enhancement in support measures brings great disappointment to the middle class.
In recent years, the Government has kept handing out "candies" and money, but it has not mentioned how to earn money or thought about ways to increase the sources of revenue. The report released by the Working Group on Long-Term Fiscal Planning appointed by the Financial Secretary pointed out that using the current policies and operation as the projection basis, Hong Kong will record a structural deficit within seven years at the soonest, and our fiscal reserves will be used up by 2028. In the light of the problems now faced by Hong Kong, such as an ageing population and shrinking labour force, coupled with the absence of planning for economic development and strategy to increase government revenues, I think that a structural deficit will likely emerge in Hong Kong in the future.
Nonetheless, the Budget failed to propose any method by which the Government can tap more sources of revenues. It only proposed to turn the $220 billion-Land Fund into a "Future Fund", hoping to make money by making use of the "Future Fund". But what I do not understand is, the monies that they are playing with are all government monies in the reserve, who will be responsible for the management? I believe the "Future Fund" will be managed by the Monetary Authority eventually. If so, what is the reason for setting up a separate fund instead of integrated management?
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The Government, failing to embark on economic development and enhancing the competitiveness of Hong Kong, will not resolve the problem of structural deficit. Currently, Hong Kong has a total of almost $3,000 billion in its coffers ― $740 billion in fiscal reserve plus an Exchange Fund of over $2,000 billion. The Government should make good use of this enormous sum of money for long-term economic planning and investments with a view to increasing government revenues and addressing the problem of structural deficit that may arise in the future.
In addition, the Financial Secretary frequently emphasizes strict adherence to the principle of fiscal prudence. But everyone knows that all major infrastructure projects initiated by the Government in recent years are characterized by serious overspending problems. Those projects are not only under budget, many of them have incurred a significant amount of overspending to the extent that they have to apply for supplementary provisions from the Legislative Council, and as a result, up to tens of billions of public money were squandered.
The Government should monitor the infrastructure projects properly and improve the tender system in order to avoid project delay. If shortage of labour is one of the factors that affect the progress of works, my view is that to ensure the projects can complete as scheduled and avoid overspending problems, we should face the reality of the need for importation of labour to fill some of the vacancies. Members should note that the overspending of infrastructure projects usually involves several or tens of billion dollars. If this sum of money can be saved, I believe it can be used as expenditure on other areas, such as medical services, education and social welfare. Hence, I opine that the Government should conduct a proper review of the problem of overspending.
Thank you, Deputy President. I so submit.
MR FREDERICK FUNG (in Cantonese): Deputy President, this time around, I can point out more clearly than before that the Financial Secretary is untrustworthy. First, the financial concepts of the Financial Secretary cannot be trusted. Members may see that the Budget this year is the presentation of mere written words without any new initiatives. Comparing the Budget this year with that of last year, apart from the cancellation of some of the relief measures, what other difference can be found? We may again compare it with the Budget of the year before last, which was the final year of the term of office of former Chief LEGISLATIVE COUNCIL ─ 9 April 2014 9719
Executive Donald TSANG. Is there any significant difference? Nearly 80% of the content of the Budget is similar. The office of the Chief Executive has changed, yet the Financial Secretary is still the same person. Members should compare the manifestos of former Chief Executive Donald TSANG and the incumbent LEUNG Chun-ying. Their manifestos are different, if so, why are the Budgets presented during the different tenures so similar? Is the Financial Secretary following the practice of former Chief Executive Donald TSANG or that of the incumbent LEUNG Chun-ying?
Deputy President, the Financial Secretary is only trying to bluff us. According to the findings of the studies conducted by the Working Group on Long-Term Fiscal Planning under the Financial Secretary, the present number of elderly persons is 1 million, which will increase to 2 million 15 years later. The increase in the number of elderly persons will increase the expenditure on healthcare and welfare service, which will cause problems and result in a structural deficit, making it necessary to set up the "Future Fund". However, the "Future Fund" is set up not for caring for the elderly, nor is it for handling the future retirement protection of Hong Kong people, not to mention the universal retirement protection. The "Future Fund" is set up for settling project expenses in future. If the authorities can bring up the discussion on the elderly problem and on the setting up of the "Future Fund", why has it not considered benefiting retirees in Hong Kong?
Basically, the Financial Secretary is shifting the blame to the elderly for problems in the future. The Financial Secretary has overlooked the fact that compared with the elderly 10 years ago, the elderly persons now know better about planning for their retirement and their retirement life. The Financial Secretary may also have missed the point that an increasing number of elderly people 10 years later will come from the middle class and they may be professionals, who know far better how to handle their assets and their retirement life. Elderly people are not a burden. On the contrary, they may be new targets of industries and new consumers with good spending power. In fact, in view of the change of economic background of the elderly in the next two to three decades, we should examine properly how to initiate new promotion efforts and set up platforms to induce the emergence of new industries. Regrettably, the elderly people have been made scapegoats for the Financial Secretary now.
(THE PRESIDENT resumed the Chair)
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President, some experts have criticized the Working Group for underestimating the future investment return of Hong Kong. Even Dr LAU Wong-fat, the veteran senior member of the pro-establishment camp, has queried that when the Financial Secretary made a mistake in the Budget for just one year, how he could plan the Budget seven years ahead.
President, the Financial Secretary often imposes caps on expenditure but fails to open up new sources of wealth for society. Since John TSANG took office as the Financial Secretary, the average expenditure in the Budgets in the past and in the next five years had been and will be capped at or within 20% of the GDP. In order to keep the expenditure at 20% of the GDP, he had been unwilling to spend the surpluses of the past seven years, which amount to an average of $500 million a year, to promote new industries. For instance, the Legislative Council has discussed promoting the development of green economy, arts and creative industries and the IT industries, and so on, a number of times, so as to promote a variety of industries other than the finance and real estate industries in Hong Kong, thereby creating a new Hong Kong.
Moreover, Members all know that the fiscal reserves of Hong Kong now stand at $745.9 billion, which is equivalent to the government expenditure for 22 months, in which the accumulated surplus of $637.3 billion is not included. I recall that at a special meeting of the Finance Committee, the Secretary for Financial Services and the Treasury Prof K C CHAN, told us excited that the highest level of reserve since the reunification was recorded in 1998, equivalent to 28 months of government expenditure. It seemed that he was most eager to further enlarge the existing reserves of 22 months of government expenditure to the target of 28 months. I wonder if this is the target of the Secretary. Why did he have to mention the 28 months? Perhaps the Secretary has forgotten that during Anthony LEUNG's tenure as the Financial Secretary, detailed discussions had been conducted in the Legislative Council and a consensus reached that the fiscal reserves should be maintained at a level equivalent to 12 months of government expenditure, which was the expenditure for a year. In other words, if the Government does not get any revenue in a certain year, the amount will be adequate for the SAR Government to maintain its operation for a year. Twenty-two months, have we discussed that? Twenty-eight months, the Financial Secretary and the Secretary, is this your goal? Have you two been aiming too high? Have you two focused merely on money? Have you two paid any attention to the life of the grassroots and people in the lower-middle stratum in Hong Kong currently?
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President, the second reason for the Financial Secretary not to be trusted is that his estimate is untrustworthy. In the past seven years, none of the estimates made by the Financial Secretary had been correct, and the discrepancy ranged from some $10 billion to over $100 billion. The amount of surplus accumulated in the past seven years exceeds $350 billion, which is half of the total fiscal surplus. Now, he has made the estimate for the coming year. Let me analyse the estimates he made. The Budget of 2014-2015 is another "cry wolf" attempt. We can do a comparison of those figures. In the year 2012-2013, the surplus for the first nine months was $40 billion, and the surplus reached $64.8 billion by the end of the year. In the year 2013-2014, the surplus for the first nine months was $31.4 billion, and the surplus turned out to be $12 billion according to the Financial Secretary. For the first nine months of the two years in question, the difference in surplus was only $8.6 billion, but it turned out that the difference in surplus by the end of the year was $52.8 billion. Why? Why would the surplus in the last three months of the previous year, 2012-2013 have increased from $40 billion to $60-odd billion? Why would the surplus of this year have dropped from $30-odd billion to $10-odd billion? The Financial Secretary has given no explanation on this. Though only the Secretary is in the Chamber now, the Secretary definitely knows that on the day before the announcement of the Budget, that is, 25 February, two sites at Kai Tak were sold for $10 billion, and I believe that when he drafted the … He would not have been that smart to foretell that the Government would make over $10 billion in revenue the day before the announcement. In my view, the Budget this year will be wrong again, for I believe the surplus will surely exceed $12 billion. Under this circumstance, how can I trust you? Will this Budget in my hand, which had been incorrect for the past seven years, be particularly accurate this year? It is crying wolf. Even primary students have heard of that. Do you think we Members have covered our eyes and know not it is crying wolf?
The third point which is "untrustworthy" is the relief measures proposed by the Financial Secretary. In fact, for the year 2013-2014, after the implementation of the one-off relief measures, the authorities still had a surplus of $12 billion and fiscal reserves relief of $745.9 billion. This amount does not include the enormous Exchange Fund with total assets amounting to $3,030 billion as at the end of 2013. It is evident that the SAR Government has strong financial strength to support the one-off relief measures to benefit the middle and lower classes, and to provide for a long-term plan at the same time. Society needs these and the Government can fully afford them. However, the Government has opted for an opposite course of action by cutting a number of 9722 LEGISLATIVE COUNCIL ─ 9 April 2014 relief measures, including the electricity subsidy which has benefited all strata of society, and waiving rates only for two quarters and only one month of rent for public housing tenants.
Regrettably, for long-term planning, the Financial Secretary has only proposed the setting up of the "Future Fund" and the objective of it is to ensure that infrastructure projects can be implemented even in times of financial stringency. However, for long-term social policies, such as universal retirement protection, not a single word was mentioned. How should Hong Kong develop humanity industries? How should we start up engines and set up platforms to facilitate the establishment of all kinds of industries, thereby creating a new Hong Kong?
In gist, the Financial Secretary has stuck to his usual practice of "crying wolf". He continues to underestimate government revenue and overestimate government expenditure, adhering to the skinflint philosophy in finance management. Apart from the unreasonable cuts in relief measures, he has repeatedly quoted the report of the Working Group on Long-Term Fiscal Planning, that Hong Kong may have a fiscal deficit seven years later to intimidate the public, driving us to support the Government's financial principle of maintaining its expenditure at 20% of the GDP. He has turned a blind eye to the concern of enabling Hong Kong people to lead a better life.
President, I would like to point out another mistake which the Financial Secretary has made in his estimates. Members all know that the Financial Secretary's estimate on future revenue includes $700 million to $800 million of revenue from land sales. The land sales this year amount to $80 billion. However, the land sold this year falls short of the original projection for land sale, which aims at providing sites for the construction of 20 000 private flats. Now, the Government, the Secretary for Development, makes continuous announcements to the public that it will remain determined in identifying sites for housing construction.
Theoretically, the land sold in the coming year should certainly be adequate for the construction of 20 000 flats or more. If the sites sold for housing construction in the coming year can produce more flats than this year, why will the Government only get $70 billion from land sales in the coming year when it is getting $80 billion this year? If it is not because of an underestimate, it is LEGISLATIVE COUNCIL ─ 9 April 2014 9723 because the projected number of flats cannot be built on those sites. No matter it is because of underestimates or the impracticability to build the required number of flats, it means untrustworthiness.
President, let us look at the response of the public after the announcement of the Budget. According to the findings announced by the Public Opinion Programme (POP) of the University of Hong Kong on the second follow-up survey on the Budget, it is found that the average rating of respondents for the Budget is 48.8, which is one point slightly lower than the rating obtained in the survey on people's instant reaction, but 0.3 point higher than the rating recorded in the first follow-up survey conducted last month. The latest satisfaction rate for the Budget is 25% and the dissatisfaction rate is 44%, which is similar to the results of the first follow-up and the second follow-up.
Between the 17th and 20th of this month, the POP successfully interviewed 1 027 Hong Kong citizens and the results of the survey indicate that: a high percentage of the respondents, 61%, considered the measures proposed by John TSANG in the Budget to relieve people's stress inadequate, and only 33% considered the measures adequate.
Another survey was conducted by the Hong Kong Research Association (HKRA) in early March. The HKRA successfully interviewed 1 092 citizens six days after the announcement of the Budget. Among the respondents, 39% were dissatisfied with the Budget, which was 5% higher than the result last year, and only 26% were satisfied with the Budget, a decrease of 2%. The results of the survey reflect that the public consider the Budget this year less desirable and their impression of the Budget is more negative.
The SAR Government has deliberately cut down on the "candies" in the Budget this year, cancelling a number of one-off relief measures. As a result, 52% of the respondents considered the relief measures implemented under the Budget too few, the ratio is 3% higher than last year, and only 23% considered it reasonable and 15% considered the measures excessive. Moreover, 69% of the respondents considered that the Budget had failed to address the needs of various strata, and the ratio is 6% higher than that of last year. Many respondents queried that the Budget "focuses on the grassroots and overlooks the middle class."
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Regarding the report of the Working Group on the Long-Term Fiscal Planning as quoted in the Budget, which warns that the Hong Kong Government may face a structural deficit in seven years' time, 61% of the respondents said that they were not anxious or not quite anxious about it and only 34% were anxious about it. As for the option of increasing tax to cope with public expenditure in the long run, 45% of the respondents were against that and 42% were for the option. For the setting up of the "Future Fund", 52% supported using part of the surplus for the setting up of the fund and 34% opposed it.
President, based on the contents of the Budget, the estimates and the responses of the public to the Budgets over the years, we and the public in general have to express our dissatisfaction with and lack of trust in the estimates made by the Financial Secretary in the past many years.
MR ANDREW LEUNG (in Cantonese): President, the Financial Secretary presented the second Budget of the current-term Government in February this year. He announced measures to address the concerns in various aspects, such as competitiveness, industrial development, manpower, land supply, ageing population and public finance and, at the same time, issued the advance warning that Hong Kong faces the hidden worry of a structural deficit for the first time. The objective of the Budget is consistent with the proposal put forth by the Business and Professional Alliance for Hong Kong (BPA), which carries the theme "Creativity, Upward mobility and Hong Kong's future". In fact, promoting sustainable economic development that facilitates the upward mobility in society is a solution to the structural deficit of Hong Kong in the long run.
In the Policy Address presented by the Chief Executive in January, poverty alleviation is the main theme. Now, in the Budget, the Government makes financial commitment in support of the content of the Policy Address. Meanwhile, proposals have been made to contain expenditure and open new sources of revenue, which include enhancing Hong Kong's competitiveness through investment in infrastructure and encouraging people with working capacity to remain self-reliant to spare Hong Kong from stepping further into welfarism. I have to stress that the authorities should vigorously promote the development of Hong Kong in order to maintain sustained economic growth, for this is the effective way to open new source of revenue for the Government, which will at the same time reduce the pressure for tax increase. Though the LEGISLATIVE COUNCIL ─ 9 April 2014 9725
Budget is on the right track in terms of the main direction, it lacks details. As such, I hope the authorities will take some practical actions to facilitate the economic development of Hong Kong. I will put forth some proposals in this regard in the hope that the authorities will actively consider them.
President, it is easy to spend money yet difficult to make any. The Working Group on Long-Term Fiscal Planning (Working Group) published a report some time ago, pointing out that if the quality of service of the Government remained unchanged and the growth rate of government expenditure was 3% per annum, Hong Kong would face a structural deficit in seven years' time the earliest. According to Article 107 of the Basic Law, "The Hong Kong Special Administrative Region shall follow the principle of keeping expenditure within the limits of revenues in drawing up its budget, and strive to achieve a fiscal balance, avoid deficits and keep the budget commensurate with the growth rate of its gross domestic product." The BPA has all along supported and urged the Government to adhere strictly to the principles of fiscal prudence and keeping expenditure within the limits of revenues. We are concerned about the increase in recurrent expenditure of the Government, for we should not let the next generation bear the burden of fiscal deficit. As such, the BPA considers it opportune to review and discuss the necessity to maintain the ratio of public expenditure as a percentage of the GDP at 20%.
I understand that the Financial Secretary has effected significant cuts in measures of "handing out candies" this year. Although this has aroused widespread discontent among many people, the middle class in particular consider that the Government has once again ignored their needs, "handing out candies" is comparable to chronic poisoning and the money in the coffers will eventually be used up. By then, the Government will have to increase tax to meet its expenditure. Eventually, the middle class will be the one footing the bill. If the Government does not plan to increase the tax rate, it means the Government has to levy new taxes. When neighbouring countries and regions, such as Singapore, Nansha or Macao, reduce tax, Hong Kong will lose its established advantage and competitiveness of low tax rates. Besides, Hong Kong's credit rating may be lowered because of this, leading to a rise in interest rate which will trigger the collapse of the property market and create negative equity assets again.
To prevent Hong Kong from being dealt another blow by the onslaught of a financial tsunami, the Government must maintain stable and healthy finances as 9726 LEGISLATIVE COUNCIL ─ 9 April 2014 backup. Only with this can the Government proactively make investments for the future, engage in vigorous infrastructure development and introduce policies and measures to support small and medium enterprises (SMEs), thereby enhancing the competitiveness of Hong Kong.
President, during the period between 2003 and 2012, Singapore maintained a growth rate of 5.9% in GDP, yet Hong Kong could only achieve a growth rate of 2.8%. Though Hong Kong is lagging behind Singapore in GDP growth rate, I believe Hong Kong enjoys relative edges in creativity and productivity. Therefore, the authorities should introduce more concessionary policies to encourage enterprises to upgrade and restructure in the direction of displaying creativity and achieving high value-added targets.
All along, SMEs are the backbone of the economic development of Hong Kong. I welcome the Financial Secretary once again accepting a number of proposals put forth by the BPA. These measures include the extension of the application period for the special concessionary measures under the SME Financing Guarantee Scheme to February next year, the increase of the loan amount under the Microfinance Scheme to address the needs of SMEs, the continual implementation of the Small Business Policy scheme, the stepping up of the promotion of Hong Kong brands and the promotion of cloud computing applications among SMEs. The BPA believes that the relevant measures will facilitate SMEs in lowering their operation costs and enhancing their efficiency, so that SMEs will play a more prominent role in promoting diversified economic development and investment in R&D. However, as I have emphasized repeatedly to the Federation of Hong Kong Industries, only if expenses on product design and R&D are granted tax deduction of three times of the expenses will enterprises be attracted to invest more resources in these aspects. As for talents training, I am glad to know that the Government supports vocational education with action by allocating $130 million to subsidize the retail industry to increase productivity and assisting the Vocational Training Council in strengthening its vocational education and talents training. However, the sum of $130 million is inadequate for comprehensive enhancement of talents and skills. Therefore, I hope the authorities will increase the provision on the one hand and step up the support for the Qualification Framework to enable capable persons below 40 years of age to attain the third-level of the Qualification Framework through further studies. As my colleague, Dr Priscilla LEUNG, said earlier, many blue collar workers can make outstanding achievements and there is prospect for vocational education.
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As for the finance industry, I support the Financial Secretary in proposing a reduction in the profits tax of the business of insurance of offshore risks of captive insurers to attract more enterprises to set up captive insurers in Hong Kong. However, there is one point which baffles me. Though tax concession is also applicable to offshore funds, our proposal to review section 39E (of the Inland Revenue Ordinance) is not given the same treatment. Why? I think the Government should not practise favouratism and ignore the needs of local conventional industries. It should seriously consider our proposal.
Land is the prerequisite for enhancing the competitiveness of Hong Kong. In January last year, Singapore published its "Land Use Plan". It is mentioned in the plan that by 2030, the area of land will be increased by 10% to 766 sq km to cope with the growth in population which may reach 6.9 million. It is also stated in the report that among the sites of the Singapore Government, 58% will be used for housing, industrial and community facilities purposes in future, whereas industrial and business sites will account for 17%. In comparison, the utilization rate of land in Hong Kong, which has a greater area than Singapore, is far lower than that in Singapore due to restrictions in various aspects. According to the land use review conducted by the Planning Department in 2012, the built-up area represents only 23.7% of the total land area in Hong Kong, whereas industrial and business area represents only 2.7%, measuring about 30 sq km, which is smaller than Hengqin which measures about 106 sq km after reclamation. Therefore, the authorities should identify ways to increase available land, examine reclamation on an appropriate scale and develop the rock caverns to release more land. It should also examine afresh the zoning of "green belt" areas and speed up the scrutiny and approval time of applications for change of land use. The authorities should work on both the hardware and the software, so as to ensure that Hong Kong will not fall behind other countries.
As for infrastructure, the Government has set a target for housing construction to provide 470 000 units in 10 years, of which 60% will be public housing. Based on the cost of around $1 million per unit, the expenses incurred will amount to some $200 billion. At the same time, other large-scale projects including the construction of the third runway, railway and information and technology enhancement are on the way. The magnitude of the financial burden and pressure to be borne by the Government in the future is thus evident. The BPA agrees with the request in the Budget on the Housing Authority to examine a feasible long-term financial arrangement. We also urge the Government to enhance the Supplementary Labour Scheme in view of the constant increase in 9728 LEGISLATIVE COUNCIL ─ 9 April 2014 works projects to address the shortage of manpower in the construction industry, ensuring that progress of housing construction will not be affected and result in increased project costs.
When it comes to housing, we cannot but mention the "double curbs" measures. Since the Government introduced the "double curbs" measures, we notice a drastic drop in the volume of transactions, but property prices remain at a level unaffordable to the general public. Due to the ambiguity and many loopholes in the provisions on the curb measures, the legislation cannot fulfil the initial objective set by the Government in controlling property prices. Since enterprises purchasing property for business expansion will be liable to heavy tax, the determination of overseas enterprises to take root in Hong Kong is thus undermined. As the Government has not laid down any objective indicator for the withdrawal of the measures, this has added a factor of instability to the property market. Property owners worry that their property will be turned into negative equity assets, whereas people without a flat keep waiting and dare not purchase any property. Therefore, the Government must be extremely cautious in handling this issue. The property prices in Hong Kong have all along remained at a high level, and expensive construction cost is one of the reasons for this. The Chief Secretary for Administration, Mrs Carrie LAM, pointed out in January this year that about six years ago, the construction cost in Hong Kong was around $1,000-odd per square foot, but it had increased to $4,000 now.
The Financial Secretary has admitted in the Budget that there is a manpower shortage in individual industries, inhibiting the development of the relevant industries. The Government has the responsibility to ensure an adequate supply of manpower to cope with the demand. Therefore, in addition to the enhancement of training, the Government should speed up the processing of applications for importation of labour lodged by industries facing an acute manpower shortage to ensure that overall economic development will not be affected. Importation of labour is no scourge. In this connection, we can draw reference from the policy on importation of labour of Singapore. Secretary Prof K C CHAN said some time ago that in recent years, the economic growth in Singapore had been faster than Hong Kong, and its land production was 10 times that of Hong Kong. He said the rapid growth should be attributed to the employment of a large number of imported workers, which accounted for one third of the working population there, to keep construction cost at a level lower than that of Hong Kong, thereby controlling property prices and speeding up development.
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To make the public sense that the importation of labour will not merely bring forth disadvantages, the Singapore Government addresses the concern by means of taxation. It levies an imported worker tax on employers, which provides job security for local workers on the one hand and generates an enormous income for the treasury on the other. The revenue from the imported worker tax charged is spent on training Singaporeans, so that they are equipped to take up high-skilled and high-pay jobs, whereas low-skilled jobs will be filled by imported workers, thereby maintaining the vitality of the economy and promoting upward mobility in society. According to the estimate of the Government, the working population in Hong Kong will reach its highest in 2018 and then diminish gradually, so importation of labour is no longer a taboo subject of discussion. I hope all sectors in society will engage in rational discussions to identify a solution to the problem.
We are facing the problem of an ageing population. Though the Government proposed some time ago that the retirement age of civil servants be extended, it is inadequate to address the problem of labour shortage in the long run. In future, we will be facing an increasing demand for medical and elderly care services, and the public expenditure thus incurred will rise continually. The elderly have made great contribution to the development of Hong Kong in the past, the Government is therefore duty-bound to ensure that they can live in dignity in their retirement. In the long run, we should review the issue of sharing medical expenses, and the review should be conducted properly as soon as possible. In view of the increasing expenses, the authorities should identify ways to enable the sustained operation of public medical services long term.
Moreover, under the influence of globalization, Hong Kong may be affected by changes in external economies. In view of this, the Government tries to prepare for adversities in times of peace by proposing the setting up of a "Future Fund" based on the Land Fund and a portion of the annual surpluses. The arrangement is made to prepare Hong Kong for a rainy day and save for the famine. It is well-intentioned. However, if a portion of the surplus each year is set aside for the "Future Fund", it may reduce the Government's capacity to introduce measures to enhance Hong Kong's competitiveness, such as measures to lower profits tax and support enterprises. Besides, investment carries risks and there is no guarantee that the Government will make a windfall from fund transactions. Hence, I hope the Government will weigh various factors carefully and conduct extensive consultations on this proposal.
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President, the Budget this year can still be regarded as pragmatic. It has the foresight to point out that for Hong Kong to maintain its fiscal sustainability in the long run, the Government must contain its expenditure and open new sources of revenue, keep expenditure within its limits of revenues and enhance Hong Kong's competitiveness to address the structural deficit that may surface in future. Hence, apart from increasing housing supply, the authorities should also make vigorous efforts to increase industrial and commercial sites, encourage SMEs to upgrade and restructure and to develop high value-added industries, and to train up talents to cater for the needs of future economic development. Population ageing is a problem which all developed countries and regions have to face. The key to the problem lies in recruiting talents in an extensive manner to maintain a strong labour force for Hong Kong. However, to enhance the competitiveness of Hong Kong, the authorities should not focus only on absorbing professionals, for it must understand that low-skilled workers are also needed for the infrastructure development of Hong Kong.
With these remarks, President, I support the motion.
MR MICHAEL TIEN (in Cantonese): President, both Hong Kong and Singapore are renowned as two of the Four Little Dragons in Asia because of their high-speed economic growth. As both places are Chinese societies with an externally-oriented and mature economy, naturally people often make a comparison between them, as Mr Andrew LEUNG just did. We will compare these two places in various aspects, such as their economy, talents, land, education, and so on.
As an economy becomes more mature, its economic growth will generally slow down. But over the past decade, this dragon of Singapore has broken the convention as it has been flying ever faster and higher. In respect of industrial development, recruitment of talents, reclamation and investment in education, Singapore has taken bold and resolute measures all the same. In comparison, over the past five years, the real economic growth of Hong Kong was only 2.72% on average but that of Singapore was already up to 4.82%, which was two percentage points higher than that of Hong Kong. I hope that the Financial Secretary can bear in mind these two key figures. As a saying goes, "we should learn from the good examples of other places to overcome our shortcomings". In drawing a comparison between the two places, I am not suggesting that Hong Kong should copy wholesale the Singaporean model. Rather, I hope that by LEGISLATIVE COUNCIL ─ 9 April 2014 9731 making reference to their advantages, we can find out our inadequacies and identify the areas for improvement, so that this dragon of Hong Kong will not be flying too slowly.
The Government said some time ago that a structural deficit may arise in Hong Kong in seven to 15 years. In view of this, apart from cutting down on spending to control expenditure, it is more important to open up more sources of revenue, in order to speed up the pace of economic growth. Let me say this once again: That the Singaporean economy is growing faster than ours is attributed to their population policy and reclamation. At present, Singapore has over 800 000 foreign workers, accounting for 30% of the total workforce. A sufficient number of foreign workers can fill jobs that are shunned by local workers but indispensible to the overall development of society, and this will ensure stable productivity in Singapore. It is because of this reason that Singapore, despite being a mature economy, still managed to achieve sustained growth in the economy.
On the contrary, in Hong Kong, we can see that there are only 3 000 foreign workers, representing 0.1% of the total workforce. Whenever the importation of labour is discussed, most people and most political parties will become panic-stricken, thinking that they are about to hold the tiger's tail and insisting that not even one more foreign worker should be admitted. Individual industries, such as the construction, elderly care and catering industries, are persistently faced with a shortage of manpower but everyone is turning a blind eye to this. The Government itself is aware that as society ages, the workforce will shrink in 2018 and this will further affect the productivity in Hong Kong. If, at this point in time, the Government does not plan ahead, review the population policy and replenish the labour force, when is it going to take these steps?
Reclamation is another area of work in which Singapore has been outpacing Hong Kong. The Secretary for Development has pointed out that in Singapore, the reclaimed areas accounted for 20% of the total area, compared to a mere 7% in Hong Kong. As I have said many times, we must rely on reclamation to maintain a stable supply of land in the long term. As we can see from the development of North East New Territories New Development Areas, it has taken 20 years now but it can provide housing for only some 60 000 people and to date, not even 30% of the project has been completed. Should we continue to take this path?
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I have asked the Government whether it has a timetable for reclamation, but they have not given any reply at all. A few days ago I asked the Financial Services and the Treasury Bureau whether it would admit that the shortage of manpower and land in Hong Kong is the main reason for the Hong Kong economy lagging behind that of Singapore. The Secretary surprisingly admitted right away that land and manpower are the constraints faced by Hong Kong in economic development, but then he added that Hong Kong may not necessarily have to copy Singapore. It really beats me indeed. Why did he stress the need to identify our inadequacies on the one hand but rule out the need to prescribe the right cure to the problem on the other? He also mentioned the issue of structural deficit, pointing out that it may arise 15 years down the line the latest, the same time when the landfills will reach capacity. What does this mean? Should we just sit here to wait for the arrival of the doomsday? I really do not understand what he was trying to say.
The economy of Singapore has achieved rapid development not only because they are fast, resolute and focused in taking forward their population policies and reclamation projects. More importantly, Singapore has attached great importance to investment in education. They understand very well that education is not a short-term expenditure but a long-term investment. Education can have an extremely huge impact on the long-term competitiveness of a place. If the Government is willing to plough in resources today, it is certain that greater results can be reaped in the future.
Here, President, let me make it clear right from the outset that I am asking the Financial Secretary for money on behalf of the students and the elderly. Let me first talk about the students. The proportion of the education expenditure in the total public expenditure can fully reflect that the Government's commitment for education is shrinking. If we compare Hong Kong with Singapore, we will see that in the five years between 2008 and 2012, the expenditure on education in Hong Kong accounted for an average of 20% of the total expenditure of the Government, compared to 38% in Singapore. This is clearly indicative of the insufficient commitment made by the Hong Kong Government for education. Of all the education measures in Singapore, their investment in education is the most valuable reference for Hong Kong. The Education Bureau in Hong Kong has all along been unwilling to increase the number of subsidized degree places. Financial Secretary, you should have a good memory, and you should recall that I raised this issue last year when I was a newcomer to this Council. I am raising it LEGISLATIVE COUNCIL ─ 9 April 2014 9733 again this year, and I will most likely do the same next year until we have seen measures taken by the Government.
In 1989, the Hong Kong Government set the target of providing 14 500 university places each year. This target has remained unchanged for two decades, and the number was pitifully increased by 500 to reach 15 000 in total only recently in 2012, which means that less than 20% of students of the appropriate age can study in universities subsidized by public coffers. This target is obviously outdated and below the international par. Let us look at Singapore. The proportion of students of the appropriate age studying in publicly-funded universities is 27% at present, compared to less than 20% in Hong Kong. Is Singapore satisfied with this figure? They have already planned to increase the percentage to 30% by 2015. They have further vowed that the percentage of students of the appropriate age studying in universities will be increased to 40% by 2020.
I am not asking the Government to take steps in order to be on a par with Singapore, such as setting a target and drawing up a blueprint to gradually increase the admission rate. All I hope is that the Government can expeditiously increase the admission rate to be close to the current level of Singapore, which stands at a humble rate of 27%. I can imagine that the Government may probably say in response that Hong Kong may not need to copy Singapore given that our situations are different. But this is basically the responsibility of the Hong Kong Government. The Government cannot evade the inadequacy of the education system in Hong Kong. No matter in which country, a student who meets the requirements for university admission should be provided with a university place subsidized by public coffers, except that the Government is caught in financial difficulties. But is our Government in financial stringency?
Recent figures have shown that in the 2013-2014 school year, 16 000 students who can meet the requirements of university admission are not provided with a university place. What can they do? Most of them have chosen to take associate degree programmes in the hope that they can enrol on university conversion programmes in the future. While the students' examination results are far above the basic requirements, they still have to take associate degree programmes for two years at their own expenses. What has the Government done for them? All it has done is to add 1 000 articulation places in universities for associate degree graduates and worse still, these places will be increased 9734 LEGISLATIVE COUNCIL ─ 9 April 2014 progressively in a few years with the aim of providing 5 000 articulation places in universities in the 2018-2019 school year. Assuming that 5 000 of those 16 000 students can be articulated with university programmes, there will still be 11 000 students facing an uncertain future.
The Government makes students take one examination that determines their fate. When they have eventually obtained good results in the examination and met the requirements of university admission, they have to take associate degree programmes because of inadequate university places and yet, they may not be able to go to university after completing the associate degree programmes, and they are like being trapped in a cul-de-sac. Burdened by the qualification of being associate degree graduates, they face difficulties both in pursuing further studies and seeking jobs. Society and employers have misgivings about the recognition of their qualification. I have asked the Secretary for Education what these students should do. The Secretary said that they can pursue self-financing programmes. I would like to ask Eddie NG how he does not feel shameful in making that remark.
In order to increase the percentage of students studying in subsidized university places to be close to the current level of Singapore, the Hong Kong Government has to make the present rate of 19% increase to 27%, meaning that the number of subsidized degree places has to be increased by about 5 600. According to the statistics provided by the Education Bureau, the average unit cost of a degree place is about $200,000. If we use a four-year programme for calculation, the provision of an additional 5 600 degree places will entail an increase of $4.4 billion in the total annual expenditure of the Government. The current $77 billion expenditure on education takes up a share of 3.8% in the overall GDP and to meet an increase of $4.4 billion, the Government need only increase the share of the education expenditure in the overall GDP from 3.8% to 4%, which involves an increase of a mere 0.2%. Let us look at Singapore. Their expenditure on education currently accounts for 4.1% of the GDP, but they have already said that by 2020, the percentage of students studying in universities will be increased from the present 27% to 40%.
Singapore realizes the importance of making investments in talents. They understand that the expenditure on education must not be cut even in times of stringency. The Hong Kong Government has been sticking to the old rut, but what good will this do to our future? We are not suggesting that the percentage of students of the appropriate age studying in universities should be increased to LEGISLATIVE COUNCIL ─ 9 April 2014 9735 the levels in European and American countries, which can reach 50% or 60%. So, with regard to this increase of 0.2%, why does the Government still insist on the attitude of scrimping on spending?
Financial Secretary, please bear in mind that the investment in education is not an expenditure on social welfare. With an increase in the percentage of the education expenditure as a share of the GDP today, an equal percentage of growth will be generated in the future. This is why I strongly believe that investment in education has merits.
Lastly, I wish to talk about the elderly. Apart from students' education attainments, the teeth of the elderly is another issue about which I am more concerned. As a saying goes, "a toothache is much worse than a serious illness". To the elderly, their teeth is like everything to them. At present, the 11 dental clinics under the Department of Health (DH) provide dental out-patient services for non-civil servants. In 2011-2012, they provided services to over 100 000 attendances, of which elderly people aged over 61 accounted for 50% or constituted about 50 000 attendances. However, there are 1 million elderly aged over 61 in Hong Kong. In other words, 95% of the elderly cannot access public dental services. Is it reasonable for a Government with commitment to take care of the teeth of only 5% of the elderly people? As for the remaining 95% of the elderly, those who can afford the cost will visit private dentists, but what about the grass-roots elderly? They can only endure the pain and refrain from consulting a dentist.
An organization conducted a survey in 2013 and found that 80% of the elderly suffered from at least one kind of dental illness, but most elderly did not consult a dentist even when they had a toothache and preferred to endure the sufferings. Why? It is because the fees are expensive. In order to obtain a disc from a dental clinic of the DH, these elderly have to queue up at two o'clock in the morning. They have to stay on the street enduring the elements only to obtain a disc.
In view of this, I urge the Government to expeditiously incorporate elderly dental services into the public sector healthcare system. By a rough estimate ― the Financial Secretary will certainly say that my calculation is wrong and if so, I would listen with all ears how he is going to do the calculation ― the provision of dental out-patient services to about 50 000 elderly now costs around $20 million, and in order to provide the same dental services to all elderly people aged over 61 9736 LEGISLATIVE COUNCIL ─ 9 April 2014
(about 1 million in number) in Hong Kong, the cost will increase by around $500 million. At present, the annual expenditure on healthcare services is $50 billion. An increase of $500 million accounts for only 1%, which is insignificant indeed. The Government is duty-bound to make this commitment. It cannot drag its feet; nor can it scrimp on this expenditure.
Supporting the old and rearing the young is a traditional virtue of Chinese people. Today, it seems that the Government has not adequately taken care of the health of the elderly and the education of the young people. We should learn by drawing on the experience of other countries, so that after learning from their experience, we realize our inadequacies and after recognizing our difficulties, we can strive for improvement. Instead of refraining from seeking treatment in order to avoid the reality, the Government should prescribe the right cure to the ill, in order to make amends to the inadequacies of the economy, public education and the public sector healthcare system in Hong Kong.
President, I so submit.
MISS ALICE MAK (in Cantonese): President, the two Honourable Members who spoke immediately before me have cited Singapore as an example to illustrate their points and they have specifically stated that reference should be made to the policy of the importation of labour implemented in Singapore. If Hong Kong has to follow the example of Singapore in addressing the problem of labour shortage, how should we handle other problems? In order to relieve the problem of traffic congestion, Singapore has restricted the number of vehicles and the registration tax imposed on private car is very heavy. There is a period of validity for the licence issued to every vehicle, which is subject to renewal and there is no guarantee that its owner would be allowed to use the vehicle forever. Should Hong Kong follow the practice of Singapore in this regard? The Government of Singapore has, out of concern for the health of children and the reluctance to impose food restrictions, prohibited the sale of chewing gums. Again, shall we follow the footsteps of Singapore in this regard? I hope, in suggesting that reference should be made to the example of Singapore, regard would also be given by Honourable colleagues to the situation of Hong Kong.
The situation of Hong Kong is totally different and there are still a few groups of people in the territory who are unable to join the local labour market. LEGISLATIVE COUNCIL ─ 9 April 2014 9737
There are low-skilled people in their middle age who are still out of work, teenagers who have just graduated from school who are still hunting for jobs and there is also a potential manpower supply of 500 000 female workers. Assistance should be rendered to these people to help them re-enter the labour market and, as long as their employment problem remains unresolved, consideration should not be given to following the example of Singapore. If we really want to follow suit, we should not stick to one area only but should copy everything wholesale. In Singapore, a tube of toothpaste would cost twice as much as that in Hong Kong and so would the selling price of a packet of brown sugar. Shall we also borrow such practices from Singapore? Are Honourable colleagues aware of the level of Singaporeans' discontent over the policy of the importation of foreign labour currently in place in their country?
Let me come back to my views on the Budget of this year. For the information of the Financial Secretary, I have held a number of residents' forums at the district level and set up booths on the street in different districts to collect public views on this year's Budget. When asked about their opinions on the Budget of this year, attendees of all residents' forums instantly replied that the Government had not "handed out candies" this year or had only handed out a meagre amount. They had queried the absence of electricity tariff subsidies and the provision of public housing rent subsidies of one month only, but I believe these are within the Secretary's expectation. In the face of such responses, I posed a question in return and asked during those days of hardship in the 1970s and 1980s or 1960s and 1970s, when most of the people in Hong Kong had to work like a dog on two jobs at a time and live in cubicle apartments with shared kitchen and toilet facilities, had anyone ever counted on the Government for rent subsidies and electricity tariff subsidies? Why did people in those trying times not ask the Government for anything but we have such keen demands for these subsidies nowadays?
There is only one major reason for this actually. Although life was very difficult for Hong Kong people in those days when Hong Kong was a poverty-stricken place and people had to work like a dog on two or even three jobs every day, there was a belief in eventual success through hard work. However, in these days, no matter how industrious, persevering and determined Hong Kong people are, they have no hope for eventual success. There is an increase in our GDP every year and we witness the economic growth of Hong Kong, but there is no way for us to share the fruit of economic success. Only a small group of people here become rich, but a majority of the grass-roots people 9738 LEGISLATIVE COUNCIL ─ 9 April 2014 are still living in an abyss of misery. This is the reason why when people realize that the Government, given such a colossal financial surplus, has no intention to achieve optimal use of its financial resources, a call is voiced to ask the Government to "hand out candies". For this reason, we request the Government to "hand out candies". Financial Secretary, I think it is a very important question. When people are urging the Financial Secretary to "hand out candies", he should ponder seriously over the reason why Hong Kong people have fallen back to a state of asking the Government to "hand out candies". Hong Kong people have all along been self-reliant and our primary school textbooks have also told us that the most invaluable asset of Hong Kong is, apart from the natural Victoria Harbour, our talents. Why do Hong Kong people have to sit back now and wait for the Government to make "cash handouts"?
In the Budget this year, after the parts on the introduction, economic performance and economic outlook, the Financial Secretary has focused on the ways to enhance Hong Kong's competitiveness. A lot of people in the grassroots or of the sandwich class nowadays tend to have the feeling that the status of Hong Kong people has been declining. We are no longer held so dearly and no one is particularly interested in engaging people of Hong Kong for career development elsewhere, such as the Mainland. We all feel that as far as the status of Hong Kong people is concerned, what we have now can never be compared with the past and the competitive edge we once enjoyed is gradually vanishing.
The Financial Secretary pointed out in the Budget that local development in Hong Kong had long been supported by the four pillar industries and an account was also given of the development of such industries. However, to my disappointment, much of the length in the paragraphs on the four pillar industries has been devoted to financial services, an industry of speculative activities. I of course understand that as an international financial centre, the development of financial services in Hong Kong will definitely foster economic growth and promote the prosperity of our society. Nevertheless, we should not forget that a lot of grass-roots people are still unemployed. We hope that there would be adequate job opportunities in Hong Kong so that people can look to the future and rest assured that despite all the hardships endured, there will be eventual success and they will be able to move upward and make more money. In these days, though a lot of people are prepared to suffer, they can see no way out. It is impossible for them to work hard on three jobs every day like everybody did in the past because it is already a blessing now to secure even one job. They do not even have the chance to suffer hardship and persevere in toil.
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Take the logistics industry as an example. It is revealed in the Budget that our logistics industry, as I have pointed out in this Chamber before, faces keen competition from neighbouring regions. Such being the case, the Financial Secretary has put forward some suggestions or countermeasures to address the problem and these include, planning and developing relevant sites on the Airport Island, making good use of the three logistics sites at Tsing Yi and better utilizing the many "brownfield sites" scattered throughout the territory to provide multi-storey buildings to accommodate the operations of the logistics industry. Nevertheless, when the development of "brownfield sites" was discussed at the special meeting of the Finance Committee held earlier, something interesting happened. With the appearance of the term "brownfield sites" in the Budget, I had used the same in my questions to the Administration but was told by colleagues from the Planning Department (PlanD) that there was neither an established definition for the term "brownfield sites" nor information at hand on the current number of such sites in the territory. Under such circumstances, is it merely empty talk or a mission to be completed for the Financial Secretary to suggest in the Budget the better utilization of "brownfield sites" to facilitate the development of the logistics industry?
Moreover, we should bear in mind that it is due to cheap rents and the vast area of land available that operators in the logistics industry are attracted to rent sites generally known as "brownfield sites" to run their businesses. These are the reasons why they are willing to rent these sites for their operations though the sites are located in remote areas of the New Territories. The Financial Secretary might have looked at the matter only from the perspective of management concept and suggested the provision of multi-storey buildings with container truck parking and storage facilities for easy management, but are these "brownfield sites" suitable for use by practitioners or operators in the logistics industry?
What is the fate of the few logistics sites in Kwai Tsing District? These sites are once again occupied by large consortia after the tender and then leased by operators in the logistics industry at high rents. In the end, persons engaged in the logistics industry still face the problem of expensive rents and cannot find a suitable place for operation. Some veteran operators in the industry, feeling so dispirited, have chosen to wind up their businesses while newcomers have no alternative but move to the increasingly remote places. Since they cannot benefit from the few logistics sites available in Kwai Tsing District due to their expensive rents, they are forced to identify those so-called "brownfield sites" and move to the increasingly remote places. Although the PlanD has denied the 9740 LEGISLATIVE COUNCIL ─ 9 April 2014 existence of "brownfield sites", the Financial Secretary has indicated otherwise. Practitioners or operators of small and medium-sized logistics businesses have no choice but to identify "brownfield sites" in remote areas asking cheap rents, but the Government is now planning to resume their lands. Does the Government has any policy in place to assist the logistics industry? Or is it the Government's intention to make the industry decline and vanish?
With regard to the policy in this regard, an organization named the Hong Kong Logistics Development Council (LOGSCOUNCIL) has also been set up. According to the Financial Secretary, the LOGSCOUNCIL is tasked with the responsibility of assisting the Administration to conduct researches on important planning projects but it is interesting to note that only three to four meetings are convened by the LOGSCOUNCIL every year. We have made some web searches to find out what research reports have been published by the LOGSCOUNCIL, but the most recent one was completed in 2009. Under the circumstances, on the issue of the opportunities and challenges faced by our logistics industry currently, what kind of latest and updated information does the LOGSCOUNCIL have got at hand for it to make recommendations to the Administration? Members of the LOGSCOUNCIL should of course never be blamed for this since they are just volunteer advisers who offer advice and suggestions to the Government, but the most important point is, does the Government have any long-term development policy in place for the logistics industry?
I have only talked about the logistics industry in the four pillar industries because it is an industry that creates a lot of job opportunities. The former Kwai Chung Container Terminal in Kwai Tsing District alone already generated numerous job opportunities for the district back in those years in various areas such as clerical work, transport, accounting, shipping and warehouse management, and so on. These opportunities had benefited a large number of people in the district so that both low-skilled workers in their middle age and youngsters freshly graduated from school were able to secure a job. Only through this can Hong Kong people achieve eventual success with hard work, the competitiveness of Hong Kong be maintained and the competitive edge of our talents be reinvigorated.
Moreover, I would also like to say something about medical services. In the face of the problem of population ageing, the provision of medical services has of course posed a major challenge to our society, but why is it that most elderly people of this generation are in poor health? Actually, their health LEGISLATIVE COUNCIL ─ 9 April 2014 9741 problems can be attributed to the debility caused by the many hardships they had endured when they were young. While talking about our current medical costs, most people would think that with an ageing population, the medical expenditure on those aged 65 or above should be very high. However, when I asked about the medical costs for people aged 65 or above during the examination of Estimates of Expenditure for the Budget of this year, the Administration replied that such figures were not available. In the absence of such figures, how can the relevant Working Group figure out the increase rate of our medical expenditure vis-à-vis an ageing population? What kind of forecast is it when the Administration does not even have the necessary figures at hand? It seems that everything is just fantasized.
Furthermore, the value of healthcare vouchers for the elderly has been doubled this year and we were told by the Government that the increase was made in response to our request since the Hong Kong Federation of Trade Unions has been urging for the provision of dental care vouchers for the sake of the dental health of the elderly. As the Government does not consider it necessary to provide dental care vouchers and maintains that elderly people have other needs to be addressed, the value of healthcare vouchers for the elderly is increased to $1,000. Nevertheless, according to the standard determined by the World Health Organization, an elderly person aged 80 should have 20 functional teeth which are neither decayed teeth nor filled teeth. But the results of the Oral Health Survey 2011 reveal that the dental health condition in Hong Kong actually falls short of such a standard. It proves that we cannot wait until we reach the age of 70 to start protecting our oral health. But we have to start early and remind the elderly specifically to pay attention to their oral health, or else medical expenses in other areas might still be increased. Therefore, it is hoped that dental care vouchers will be provided as soon as possible and the age limit be lowered to 60 so that more elderly people will be benefited.
Besides, the Government has claimed that the health insurance scheme will be introduced this year but, honestly, I do have expectation about the scheme but I hope it will not give us disappointing results since it is still an unknown whether the scheme can enlist the support of those in the sector and the general public. No matter what, the Secretary should honour his promise in the Budget next year and introduce a medical insurance tax allowance so that the middle class will be able to enjoy more benefits.
Lastly, insofar as dental healthcare is concerned, the Kwai Tsing District Council has earmarked $100 million for subsidizing elderly people to seek dental 9742 LEGISLATIVE COUNCIL ─ 9 April 2014 and ophthalmological treatment so that they can receive dental care treatment at an inexpensive price. However, as we all know, some Honourable colleagues of this Council have already announced their intention to filibuster. I hereby urge them to object to the Budget in a fair and square manner if they are dissatisfied with it but not resort to filibustering. This will only delay the implementation of measures that have a bearing on the people's livelihood. Elderly people can wait no more to have their teeth properly treated and the mere sum of subsidy granted by the District Council, though can offer no enormous help, is better than none. It is hoped that there will be no more delay and filibustering so that the health of elderly people can be taken care of as early as possible.
President, I so submit.
MR LEUNG YIU-CHUNG (in Cantonese): President, this is the seventh Budget presented by the Financial Secretary within his term but unfortunately, as in the past, nothing new or pleasantly surprising can be found in the Budget this year and it is a similar disappointment.
Apart from the Government's intimation beforehand that fewer "candies" would be offered, it was also said that a "Future Fund" will be set up to cope with the structural deficit problem arising from an ageing population. Since this is the focus of the entire Budget, what else can there be said? In fact, the contents of the entire Budget are more or less the same as those of the past, so the extent of negative opinion on this Budget is unprecedented, whereas the net satisfaction level, standing at only 49.8, is also at its nadir since 2003 and the lowest since the Financial Secretary began to present Budgets in his tenure starting from 2008. President, I believe these findings are justified.
Doubtless the Budget this year is constrained by the need to tie in with the some 160 measures costing $25 billion in additional expenditure proposed by LEUNG Chun-ying in an attempt to salvage his popularity, but this is not the most important point. What causes the greatest discontent is the terrifying forecasts made by the Financial Secretary in the Budget. He cited the projections made by the Working Group on Long-Term Fiscal Planning (Working Group), saying that in the next two or three decades, if the Government's annual revenue increases by an average of about 4.5% and the annual expenditure increases by an average of 5.3%, a structural deficit will occur 15 years later. If the annual expenditure increases by an average of 7.5%, a structural deficit will occur seven years later. For this reason, it is necessary to consider setting up a LEGISLATIVE COUNCIL ─ 9 April 2014 9743
"Future Fund" to cope with the future situation of not being able to make ends meet. At the same time, according to the same reasoning, the support provided to healthcare, education and even to persons with disabilities and the elderly, whom we talk about frequently, will also be subjected to constraints, such that greater support cannot be provided. In view of this, how can one possibly support this Budget?
President, just now, I cited the figures and arguments of the Working Group as mentioned by the Financial Secretary and they are really frightening and worrying. However, President, as the Financial Secretary, can he possibly carry out future financial planning according to such simple linear increases? Is it possible to ignore the dynamic developments in society and simply make mechanical forecasts? Have these figures and such an exposition discounted the importance of the Financial Secretary's abilities and responsibilities? At the same time, have they insulted the intelligence and common sense of Hong Kong people?
More than a decade ago, the SAR Government also said that the problem of structural deficit would occur in Hong Kong, moreover, it was said that the annual deficit would be as high as $60 billion and that the reserves would be exhausted very soon. In 2005, the Government even said that the tax base was too narrow and that the over-reliance on revenues related to the real estate sector was unhealthy, so it was proposed that the tax base be broadened and a goods and services tax introduced. However, President, we may as well look in retrospect at the situation in the past decade. In fact, economic development, and even the expenditures and revenues of the Government, did not show linear development or linear change as forecast by the Financial Secretary and the Working Group. In fact, the economy showed erratic development in the past decade, with ups and downs within this period, taking the form of a curve. Therefore, the impression we got from the projections of the Financial Secretary and the Working Group is one of crudeness and irresponsibility, with no intention whatsoever of resolving the long-standing and deep-rooted conflicts in a society characterized by wealth disparity and as a result, an economic setting of the rich getting richer and the poor getting poorer has been created. I believe we should strongly condemn the Financial Secretary and the Working Group.
President, let us look at the following examples. In 2004-2005, government revenue was $263.6 billion, whereas expenditure was $242.2 billion and in 2005-2006, government revenue was $247 billion, whereas expenditure was $233.1 billion. In other words, if the situations in these two years are 9744 LEGISLATIVE COUNCIL ─ 9 April 2014 compared, revenue decreased by 6% but expenditure also decreased by 3.7%, However, if 2006-2007 is compared to 2005-2006, we will find that surprisingly, revenue increased by 17% while expenditure decreased by 1.5%. President, such great changes occurred in the short span of two years, so would the change in 10 to 15 years' time be even greater? Will the changes be as simple as those described by the Financial Secretary? However, President, you may think that I have only cited the situations of a couple of years or two to three years as examples and that they are not representative enough. For this reason, I also randomly chose the figures for 2010-2011 and 2011-2012 to make another comparison and found that in terms of revenue, the increase was as high as 16%, only that expenditure also increased by 20%, so these increases were not small.
President, of course, the focus today is not on understanding the changes in revenues and expenditures that were cited by me just now, but my aim in citing the relevant figures is to prove that the projections made by the Financial Secretary and the Working Group are totally untenable and totally unscientific, lacking any logic. They amounted to entirely fallacious reasoning, so I believe one cannot but doubt what the real intentions of taking such a course of action are.
There is no doubt that the possible occurrence of fiscal deficits in Hong Kong is something we should pay attention to, and we should also prepare for a rainy day. But the question remains whether or not we should make deductions in such a shallow manner and furthermore, prepare for a rainy day without thinking carefully. At the same time, should we also ignore some existing deep-rooted social problems and deliberately distort or compress expenditures currently?
An ageing population and declining labour force in Hong Kong are indeed a picture of the future. Moreover, it is also doubtful if the annual nominal growth of 4.4% in GDP can be sustained. In addition, the income growth among the public may also show a declining trend, thus making it difficult for the Government to maintain the target of an annual growth of 4.5%. However, I believe that social changes are dynamic and economic development will also change according to many factors, including political changes and changes in the various factors in neighbouring regions. They are also related to the policy directions and strategies of our Government, so there are variables in these aspects. Therefore, we should not be overly pessimistic and of course, we cannot be overly optimistic either. However, one point that the Financial LEGISLATIVE COUNCIL ─ 9 April 2014 9745
Secretary has failed to mention for a long period of time is related to our reserves. President, we have really been fortunate. In the past few years, the wealth of the Government and the public has increased considerably and even though the growth in revenue will decline in the future and there will be imbalances in revenue and expenditure, the financial pressure arising from the ageing of the population in the future can be dealt with through the optimal use of the existing reserves. In fact, if the existing fiscal reserves and returns from the investments of the Exchange Fund are added together, the total is as much as $1,400 billion, so if appropriate investments are made, so that a steady return of about 5% is made each year, an additional annual revenue of $70 billion can be generated to help ease the financial pressure arising from an ageing population. I believe the Government is capable of shouldering the expenditures in this regard.
President, in fact, even if the Government has to face the problem of structural deficits in the future, it should not solely stress the need to tackle it from the angle of controlling the rate of increase in expenditures. More importantly, it is necessary to review in earnest if various expenditures are being used appropriately at present. Apart from considering if genuinely needy people are being assisted, it is all the more necessary to consider if Hong Kong's competitiveness can be enhanced. The Government should also review if the existing tax regime is outdated and unreasonable and make timely changes.
President, government officials often point out on various occasions that the existing sources of public revenue are limited and that apart from land sales, the Government has to rely on a small number of large corporations and high-income people. Undeniably, their claims are not without grounds. Take 2011-2012 as an example, 200 000 people who paid the highest amounts of salaries tax accounted for 81.7% of the salaries tax and less than 1% of registered companies paid close to 70% of the profits tax. Of course, judging from these figures, it is true that a small number of companies and people contribute a large share of the tax revenue but unfortunately, the Government has never analysed why such a situation has arisen. Our Government actually dares not face this problem, nor has it given us a clear account of why a major share of the tax is borne by a small number of people. All it has done is to advance this claim of a narrow tax base.
President, who does not want to find himself in financial circumstances that necessitate the payment of large amounts of tax, just like that group of people? However, the incomes of the majority of companies and people are relatively 9746 LEGISLATIVE COUNCIL ─ 9 April 2014 speaking low, so they do not need to pay large amounts of tax, or it can be said that their circumstances do not oblige them to, or they do not have to, pay large amounts of tax. This precisely shows how great the extent of wealth disparity in society is and how wealth is concentrated in the hands of a small number of people. If the incomes of more people can be raised, not only will it obviate the need for them to rely on government support, more revenue can also be generated for the Government. Therefore, we should not just be preoccupied with studying how to enlarge the tax base. Instead, we should explore how best to break this system causing the unreasonable distribution of resources in society and how best to solve the problem of an over-concentration of wealth.
Taxation is an important tool to effect the reasonable redistribution of social resources and reduce the concentration of resources in the hands of a few people. Unfortunately, not only has our Financial Secretary not stepped up the efforts in this regard, on the contrary, he has even allowed those tycoons and shareholders in consortia to also benefit from rates waivers and tax reductions, so if this is not going in the opposite direction, what is it then?
All along, we have stressed that the aim of the profits tax is to redistribute the economic fruits of society properly. Of course, we understand that the pressure from costs and expenses on SMEs are very great and if their profits tax liability is raised, this will be unfair to them. But the policy of our Government is such that no matter if a taxpayer earns one dollar, $100 million or $1 billion more or even more than that, the same profits tax rate is applied, so the consequence is that wealthy people become wealthier. Is such a social situation actually fair? In fact, President, even though we think that there are still inadequacies in the tax regime, we also know that the existing regime for salaries tax is a progressive, that is, people with higher incomes have to pay more tax, so why do people doing business not have to pay more tax if they make greater profits?
Moreover, the Government can also try and consider how to introduce many other types of tax, including property vacancy tax, capital gains tax and taxes for bridging the wealth gap. Unfortunately, our Government has all along refused to do so. On the one hand, the Government dares not target people hoarding wealth, and on the other, it turns a blind eye to the needs of the grassroots, including retirement protection at old age, child care services, medical treatment for the elderly, dental services, and so on. All of these are neglected by the Government. The Budget gives us the impression that the Government is LEGISLATIVE COUNCIL ─ 9 April 2014 9747 again biased in favour of the upper classes, so that they can benefit from the fruits of economic success in society and as a result, the wealth gap continues to widen.
President, how can anyone accept and support such a Budget? For this reason, I will cast an opposing vote.
Thank you, President.
MR JEFFREY LAM (in Cantonese): President, in this year's Budget, the recurrent expenditure on social welfare has increased and one-off relief measures have been reduced. Many people think that there should be more measures to help the SMEs. The business sector also thinks that there is not enough support given to the sector, especially the SMEs. In this Budget, the report of the Working Group on Long-Term Fiscal Planning is cited in particular. This report points out that if government expenditure growth outpaces revenue growth in a persistent manner, a structural deficit will appear in seven years at the soonest.
President, in these past few years we can see that the SAR Government has registered fiscal surpluses. Many people describe the situation as a reservoir overflowing with water. Members of the public hope that more "candies" can be handed out each year. They have never thought of the question of fiscal deficit. Looking back at the past few years, however, we find that government expenditure was growing all the time. And there is also the problem of population ageing. This means the welfare and healthcare expenditures on taking care of the elderly will increase every year. We have really to be very careful in handing problems in public finance because no one will want to see Hong Kong face a deficit problem in the future. We can see that in Europe, many countries used to be rich and had a lot of reserves. One example is Greece. Now the country has to live on loans. Do we wish to see this in Hong Kong?
President, I agree with the Financial Secretary's reference to the principle of prudent financial management. This is because under Article 107 of the Basic Law, principles like "keeping expenditure within the limits of revenues", "strive to achieve a fiscal balance", "avoid deficits", and so on, are guidelines on prudent financial management. In order to avoid a fiscal deficit in the future, the Government should do a proper job of opening up sources of revenue. This includes promoting the development of emerging industries, improving the 9748 LEGISLATIVE COUNCIL ─ 9 April 2014 business environment here, attracting more investments from China and overseas, assisting the local SMEs and so on. The most important thing is to make this pie of our economy bigger and once this is done, the possibilities for income and spending will increase and more opportunities for upward mobility will open to the young people. Then we will all have good opportunities of development to work for a better life and we will have no worries.
President, on the problems of persistent growth in expenditure and the fiscal commitment caused by an ageing population, I think that there is no single measure which can solve our problems. The SAR Government should adopt a multi-pronged approach before a solution can be identified to the problems faced by us.
In the Budget, the Financial Secretary against a background of more than $10 billion of surplus decided to cut by half or remove the relief measures which have been adopted for the past few years. These measures include rates concession and electricity tariff subsidy, and so on. I think that this move is meant to change the established mindset that "candies" should be handed out once there is a surplus. The Financial Secretary cites a line from the lyrics of a song by the father of rock music in Hong Kong, Danny Summer. The words are to this effect: "Believe in opportunity, not fate". I think it is the wish of the Financial Secretary to encourage Hong Kong people to stand on their own feet and be self-reliant.
President, the middle-class people in Hong Kong have all along been working hard quietly. They contribute to society and pay tax every year. They have never thought of living on government handouts. Now prices go up because of inflation. The middle class is beset with problems like housing and living expenses. I think the Government should do more to ease such pressure faced by the middle class and see what can be done to help them more.
I agree that the Government should help people who need help. But I would also hope that the Government can understand the hardship and feelings of the middle-class people as they face their problems. The middle class is the backbone of society and middle-class people are playing an active part in the development of our economy. They spend money, but they seldom make their voice heard. However, they have become more outspoken during these past few years, and for good reasons. They pay tax but the tax revenue is not used on them. They really have a strong opinion. The Government must indeed not LEGISLATIVE COUNCIL ─ 9 April 2014 9749 neglect their feelings and demands. It should consider our suggestions such as introducing tax concession for contributions made to private medical insurance policies, as well as raising the child allowance.
Moreover, I think the best way to tackle a crisis is to create wealth constantly. The Hong Kong General Chamber of Commerce and I have suggested to the Government many times that more investments should be placed in areas with potentials of value enhancement. The business environment of Hong Kong should be improved. We are glad to see that the Budget this year has taken on board some of our proposals, including helping the SMEs upgrade their IT capabilities and in cloud computing, extending the SME Financing Guarantee Scheme, offering subsidies to the export trade for developing new products, as well as promoting R&D by the industries and universities. These are in line with the proposals made by us on upgrading our competitiveness.
President, we still think that the Budget has not given enough support to the business sector. Since cash flow is crucial to the survival of SMEs, we have always suggested lowering the profits tax rate to 15% and that a double-tier profits tax regime should be introduced. That is to say, only a 10% profits tax will be charged on the first $2 million of taxable income. It is unfortunate that the Budget did not mention this proposal. We believe that this proposal will not affect the simple tax regime of Hong Kong but can also attract inward investments instead. Very often we can see that a reduction in figures does not mean a real reduction. The cases at hand are waiving the wine duty and estate duty. The result is an increase in financial returns for Hong Kong. So we should not think that reducing the income in a certain area will lead to no increase in the overall income or even a reduction.
President, since the Financial Secretary says that he wants to create opportunities in society so that people can give play to the spirit of upward mobility, the Government should improve the business environment, encourage more people to start up businesses and make investments. These can make more people work hard to strive for success.
About the Financial Secretary's proposal of using the Land Fund and part of the surplus to set up a "Future Fund" so that strategic infrastructure projects can commence when expenditure outpaces revenue and that economic development can sustain, my idea is: Should these only be done when we are at a 9750 LEGISLATIVE COUNCIL ─ 9 April 2014 critical juncture or when our revenue lags behind expenditure? Is there any better arrangement than that? We need to plan well ahead and decide on what and when should be done. We should not commence with these strategic infrastructure projects when we meet such circumstances.
What are these strategic infrastructure projects? I would think that if the "Future Fund" is used to pay for infrastructure projects, the SAR Government should bear in mind that now there is a severe shortage of labour in the construction industry and construction costs are rising all the time. If costs keep on rising, I am sure the construction costs may have soared by many times 10 years later. I am not sure by then if this Fund can cope with the problem. Can it give full play to the functions envisaged by the Government? I hope that the Financial Secretary and the relevant departments can study the uses of the Fund and how the Fund is to operate. I hope that work can be done to secure good returns for the Fund so that the money can be placed on the construction of Hong Kong in the future.
President, the Budget this year uses Hong Kong's competitiveness as its theme. Our problems are a shortage of workers and specialists, which affect our competitiveness. Although the Budget says that efforts will be made to train talents, this needs time. Now the construction, nursing and retail sectors are short of staff persistently. This not only leads to a surge in costs but also affects service quality and economic development.
We can see that our neighbouring countries and places are brave enough to import labour and they have devised relevant policies. But the Hong Kong Government has yet to do this, despite repeated delays. What is it afraid of? Is it afraid of being scolded by other people? Or does it think that prices in Hong Kong are not high enough? If the situation goes on, our economy will certainly be affected. This is especially the case because we have to take forward a large number of major infrastructure and housing projects. If the Government does not solve this problem, I am sure it will be Hong Kong citizens who will stand to suffer. Even if land prices are cheap, if construction costs rise every day, the price of flats will never come down. How are we to solve this problem? How can residential flats be provided to young people and the middle class? We therefore urge the authorities to import labour for a certain number of major infrastructure projects and in certain trades. Certainly, the major premise is that workers in Hong Kong will not be affected.
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To solve the problem of shortage of talents in Hong Kong, I think that an effective way is to change the immigration policy to attract more young people to come here and to relax restrictions on professional qualifications. An example is to allow doctors trained overseas to open practice here. We have discussed this issue for a long time and we should know that doctors should not be confined to the place where they have studied medicine to practise the profession and that if they go to other places for practice, the patients will die. We can see that in Hong Kong there are people who suffer from all kinds of rare and strange diseases. They cannot get their diseases cured here and so they have to go overseas for treatment. Such examples really abound. Why can we not attract some well-qualified doctors who graduate overseas to come for practice here? Is there a problem with our system? Besides doctors, there are also problems with other professions. I think that we should be more open-minded and examine what best can be done for Hong Kong.
Recently, I can see that some people have advocated localism and incited hostility among the people against the new immigrants and even professionals from abroad. Their action will make our economy and tourism pay a heavy price. President, Hong Kong is an international financial centre, so this kind of localist sentiments will only affect our economic development and our image as a hospitable city.
This time when this Council examines the Budget, there are Members who claim to engage in filibustering. They have proposed about 2 000 amendments. This practice of theirs will similarly make the citizens feel disappointed. I hope the President can handle this properly so that we would not have to sit here for dozens of days. President, with your wise leadership, we certainly do not mind sitting here with you to handle the Budget so that it can be passed as soon as possible. For this will enable the Government as well as members of public to have the money to meet their expenses.
The filibustering last year continued for 15 days and some $30 million of public money was wasted. Those Members who plan to filibuster this time around have said that they may delay the examination of the Budget to May or even June. President, the expenditure estimates in the Budget involve government departments, healthcare, education and the grassroots. Once funding is delayed, both the Government and the grassroots will have their money supply stopped. Besides, filibustering will cause many meetings in this Council to stop. Last year, I proposed a motion and it did not have the chance to be 9752 LEGISLATIVE COUNCIL ─ 9 April 2014 debated in this Council because of the filibuster. Likewise, the operation of many Bills Committees and panels will come to a standstill and many urgent issues related to the people's livelihood will not have a chance to be discussed here. I hope those Members who claim that they filibuster for the well-being of the people should ponder over their action and stop it. They should sense the urgency of the people and think the way the people think.
President, I also hope that you can act decisively and appropriately. I have just said this and I just want to repeat it now. I am sure you are wise enough to handle matters in this Council and you will not waste public money and time on certain remarks and amendments which are not constructive other than being repetitive. This is because the operation of government departments will be affected, and so is the life of the ordinary public. The operation of this Council will be impeded. It will undermine this Council as an institution and encroach on its dignity.
President, I so submit.
MR LEUNG CHE-CHEUNG (in Cantonese): President, even though the housing policy is a key point in the policy address every year, housing is nevertheless not a key point in the Budget.
In respect of housing, apart from reducing the "candies" in relation to rates concession, the Budget is not much of a surprise; nor is it much of a shock to the speculators. While the Budget has not aroused public discussion on the housing policy, it absolutely does not mean that the public are satisfied with the current housing policy. At the end of last month, the DAB conducted a survey on the degree of public satisfaction with the Government's housing policy. Results found that the public have remained dissatisfied with the overall housing policy, and public dissatisfaction has even worsened when compared to the results of a similar survey conducted last year.
Over the past year, the overall property prices and rental have continued to hover at high levels. People of the middle income group have still found it impossible to buy their own property. The number of applicants on the Waiting List for public rental housing (PRH) has increased continuously and as there has been no breakthrough in the supply of public housing, the demand has been outgrowing supply by a widening margin. People who are paying expensive LEGISLATIVE COUNCIL ─ 9 April 2014 9753 rental while waiting for PRH allocation certainly have a lot of complaints and grievances.
Although the Budget is not the Policy Address, it can still put forward new initiatives to increase supply, in order to demonstrate the resolve of the SAR Government to increase the supply of housing. I remember that last year, the Government announced the abolition of the Application List mechanism the next day after the announcement of the Budget, in order to show that the Government had control over land supply. But one year has passed and while the Government has actively provided land, we have not seen complementary support from the developers or even the MTR Corporation Limited (MTRCL). As a result, the Tai Wai Station project which was unsuccessfully tendered in 2012 was not re-tendered last year, and the project of Tin Wing Station in Tin Shui Wai had even been unsuccessfully tendered twice.
Summing up the statistics of the Transport and Housing Bureau and the Hong Kong Property Review 2013, we can see that between 2012 and 2014, whether from the number of flats under construction or the actual or estimated production rate, the annual production figures can in no way meet the target of supplying 18 800 flats in the long-term housing strategy. Simply put, we are certain that this target cannot be reached in the first few years after the launch of the long-term housing strategy. It seems that it will not be easy to meet the target of developing 180 000 private residential flats in a decade's time.
Since it is predictable that the target will not be reached even before the commencement of the long-term housing strategy, I do hope that the authorities will think about taking one step further by building flexibility into land supply. If the private housing supply is expected to be far lower than the original projection, the authorities should make changes to the sites reserved for private housing developments or railway development projects by re-designating them for Home Ownership Scheme (HOS) or other subsidized housing developments. Take the project of Tin Wing Station in Tin Shui Wai as an example. This site, which measures about 2 hectares, is enough for developing four blocks of buildings which can provide about 1 500 flats, but the project had been unsuccessfully tendered twice. If the authorities can negotiate with the MTRCL and convert the site for HOS development, an additional 1 500 HOS flats can be provided in around 2018. Of course, financial arrangements will be involved in the process, and I hope the Financial Secretary can throw great weight behind it.
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President, while the cessation of the "Hong Kong Property for Hong Kong People" measure was not proposed in the Budget, it is a focus of discussion at the special meetings of the Finance Committee. The "Hong Kong Property for Hong Kong People" measure is one of the initiatives proposed in the Chief Executive's Manifesto in respect of housing. It was said at the time that the" 'Hong Kong property for Hong Kong residents' policy will be introduced if and when the property market becomes overheated, to assist those home buyers whose income exceeds the limits prescribed by the Home Ownership Scheme. Under the proposed policy, new sites will be selected which are suitable for middle-class housing and in the relevant land lease a restriction will be included to the effect that the completed housing units can only be sold to Hong Kong residents (including non-permanent residents)."
With regard to the policy intent, my understanding is that apart from imposing restrictions on people outside Hong Kong in buying properties in the territory, a more important objective of the "Hong Kong Property for Hong Kong People" measure is to assist those people formerly known as the "sandwich class" to buy their own homes, so that they can live in peace and work with contentment. Certainly, given that the "flour" is expensive, while the "Hong Kong Property for Hong Kong People" measure has deterred "outsiders" from buying properties, it has failed to assure home purchase opportunities for the sandwich class. Under such circumstances, whether the "Hong Kong Property for Hong Kong People" measure will be brought to an end or shelved does not make a big difference. The key actually lies in what policies the authorities will take forward to complete the unfinished task of the "Hong Kong Property for Hong Kong People" measure. In helping the sandwich class to buy their own homes, the Hong Kong Housing Society has accumulated a decade's experience and also completed and put up for sale 10 Sandwich Class Housing Schemes. Since the Government has decided to put an end to the "Hong Kong Property for Hong Kong People" measure, it should actively consider reintroducing Sandwich Class Housing Schemes or similar schemes to assist home buyers whose income exceeds the limits prescribed by the HOS more directly and effectively.
President, in respect of welfare, the Government's expenditure on social welfare is increased at an unprecedented rate to $56.9 billion this year, accounting for 18.5% of the Government's total recurrent expenditure, which is only second to education. Particularly, the expenditure on elderly care services is increased to $5.4 billion, representing a 40% increase and showing the Government's commitment for the disadvantaged. I very much appreciate and support this.
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Having said that, many elderly people at the age of 60 who have just retired have conveyed to me that although the Government is committed to improving elderly welfare, such as extending the coverage of the $2 concessionary fare scheme, increasing the types of free vaccines, increasing the value of healthcare vouchers to $2,000, and so on, they can enjoy these welfares measures only when they become at least 65 years of age. In other words, the 410 000 elderly aged between 60 and 64 as shown in the information provided by the Census and Statistics Department (C&SD) will have to struggle for a few years more before they can enjoy these "official" concessions. That the retired elderly cannot enjoy these elderly welfare benefits is indeed a bit ironic.
Some elderly people will rejoin the labour market after retirement, but according to the statistics of the C&SD, there are currently some 180 000 elderly who have left the job market but are not "old" enough to enjoy these benefits. They no longer have a job, and they no longer have any income. While they have to maintain their basic living, they nevertheless cannot enjoy these welfare benefits. Many elderly have complained to me about how they live their lives now: They have to pay for expenses but receive no income; they must save and scrimp; and they must reduce spending by all means." The intangible financial pressure has made it impossible for them to enjoy their retirement life.
At present, the retirement age is 60 in government departments and most public bodies and private companies in Hong Kong. The Government published a consultation document just last Friday on the plan to adopt a higher retirement age for civil servants. It is proposed that the retirement age of civil service new recruits be extended to 65 across the board whereas that for the disciplined services is proposed to be set at 57. However, it will at least take one year from mooting the proposals to their implementation. Moreover, these proposals will apply only to new recruits whereas for the serving civil servants, deferral of their retirement will still depend on their own wish or the needs of departments. In other words, the situation where elderly people aged between 60 and 64 cannot enjoy the elderly welfare benefits will continue to exist at least for the next decade.
In this connection, the authorities should review the various elderly welfare measures and concessions. The age at which the elderly are eligible for support should be standardized and particularly, for those concessions or policies in respect of healthcare, food, housing and transport which are closely related to daily living, the eligible age should be lowered to 60 across the board.
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With social and medical advancement, many elderly aged 60 are still strong and healthy, and it is already a general trend to extend the retirement age. Former Chief Executive Officer of the MTRCL, Mr CHOW Chung-kong, was 61 years old when he left his office. At the age of 64 now, he is concurrently the Chairman of the Hong Kong Exchanges and Clearing Limited, Chairman of the Hong Kong General Chamber of Commerce, a Member of the Executive Council, and so on, and he is still as sound as a bell. If we do some counting here, we can find that some 20 Members of the Legislative Council, which account for one third of us, are over 60 years of age but they all still have a clear mind and are full of vitality.
In fact, it is not rare for the industrial and commercial sectors to continuously hire employees aged over 60. Employers and employees can co-operate in another way of employment, such as changing from permanent staff to contract staff, changing from full-time employment to part-time employment, and so on. According to the results of the 2011 Population Census carried out by the C&SD, 143 000 elderly in the age group of 60 to 64 continued to work as employees, employers or self-employed persons, and their number was only some 40 000 less than the number of retirees.
To keep on working after 60 can bring great benefits to a person's health and mind as well as in various aspects. We consider that the authorities should suit measures to the changing circumstances and formulate policies to facilitate the re-employment of elderly employees by enterprises, such as providing allowances or tax concessions to private enterprises and public organizations which take on elderly employees, setting up an elderly employment fund, and so on, in order to give the elderly an opportunity to make contribution to society once again and pass their valuable experiences onto the young generation.
I so submit.
MR WONG TING-KWONG (in Cantonese): President, this year's Budget is a pragmatic budget. On the one hand, it strikes a balance between the aspirations relating to the people's livelihood and the financial capacity, making preparations financially to support the implementation of the 100-odd measures proposed in the Policy Address and on the other, it makes up for the inadequacies of the Policy Address in respect of the support for small and medium enterprises (SMEs). It comes as some sort consolation to the SMEs.
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As the Financial Secretary has said, SMEs account for over 90% of the local enterprises, employing half of the workforce and involving over 1.3 million "rice bowls", and they are truly the mainstay of the Hong Kong economy. But in Hong Kong, rental is high, commodities are expensive and the operational cost is rising rapidly. Added to this is a volatile external environment in recent years, and with the United States ending its Quantitative Easing measures, the interest rate is expected to rise soon. It is still difficult to predict how the market would fluctuate. Coupled with monopolization of the market by major consortia, it is indeed difficult for SMEs to sustain their operation.
To the SMEs, one of the most important elements of doing business is the capital chain. It is like blood, and a person can live only if his blood circulates smoothly. However, SMEs generally have only a small capital and are far from well-known. It is therefore difficult for them to secure loans from banks to solve the liquidity problem or they must pay high costs for loans. Therefore, the SME Financing Guarantee Scheme (SFGS) introduced by the Government is a "life ring" that provides timely relief to the SMEs as it provides loan guarantee for the SMEs, thus making banks feel more assured in lending money to the SMEs. Two years ago the Government further enhanced the SFGS by introducing special concessionary measures to increase the loan guarantee from 70% to 80%. This is a benevolent policy which has further encouraged banks to provide loans to SMEs. Response has been enthusiastic and as at end-February this year, over 9 300 applications have been received.
That said, this benevolent policy still has room for improvement. Given the low interest rate, the capital cost of banks is inexpensive, and there is also the loan guarantee undertaken by the Government. In spite of this, banks are still reaping high profits from their financing of SMEs as the average interest rate can be as high as 4.77%. Worse still, in some cases ― as far as I know ― the interest rate is even as high as 10% to 12%, which is exorbitant. Moreover, many enterprises have conveyed to us that while the SFGS is well-intentioned, there are problems with its implementation, including a relatively high threshold for application, cumbersome formalities and long processing time. As a result, it has failed to help them in a timely manner.
Therefore, since the Government is intent on providing loan guarantee services, it should strive to do it thoroughly. In respect of the interest rate, we certainly understand that the Government respects free market and will not directly interfere with the lending rate of banks, but it will be more desirable if 9758 LEGISLATIVE COUNCIL ─ 9 April 2014 the Government can keep a keener watch on the implementation of the SFGS and find out about the cost considerations of the banks in setting their lending rate while reflecting the concern of the industry and looking into how the burden of loan interest on SMEs can be further alleviated.
Moreover, the Government should streamline the application formalities by all means to shorten the waiting time. It should also study the regularization of the special concessionary measures in the light of the market changes to ensure that SMEs in need can receive timely and appropriate assistance.
Apart from worrying about the difficulties in securing financing, SMEs are most worried about default on payment by their debtors. Particularly, to many companies engaging in import and export business, in the event of sudden winding up of their customers or natural disasters, wars and riots occurring in the place of export, it is likely that they will not be able to recover the goods or the payment due to them. With the Small Business Policy scheme, SMEs are provided with insurance coverage while enjoying waiver of the annual policy fee and premium discount, and this has enabled SMEs to feel more assured in conducting their export business. The scheme has been well received since its launch in 2013, and it is absolutely good news that the Government has undertaken to continue with its implementation.
As a saying goes, "a gentleman should constantly strive for self-perfection". In doing business, apart from having regard to the prevailing circumstances for business operation, it is also necessary to constantly make plans on how productivity can be upgraded. It is an information technology (IT) world that we now live in, and we must develop towards computerization and automation in order to upgrade productivity. SMEs certainly understand the need to keep abreast of the times, just that with a small capital and narrow profit margin, they already have to meet a lot of expenses to sustain their operation, and it is actually difficult for them to spare resources for updating and replacing company equipment.
The Financial Secretary said this year that $50 million will be earmarked for supporting retailers on a matching fund basis for the use of IT. I think this initiative, if implemented smoothly, can greatly enhance efficiency and reduce the operational cost while easing the workload of employees. It will be even better if the Government can consider providing subsidies for the application of new IT by SMEs in other industries. Besides, as cloud computing is very popular LEGISLATIVE COUNCIL ─ 9 April 2014 9759 nowadays, the enterprises can, according to their needs, flexibly make arrangements for common access to online databases and software. This can economize on the cost while facilitating cross-platform application and is very convenient.
However, SMEs generally still lack understanding of the merits of cloud computing. Therefore, I very much support the Government's plan to promote cloud computing applications among SMEs and provide them with training on the application of this technology to facilitate their access to appropriate cloud computing services. I hope that the Government will announce the details expeditiously, so that SMEs interested in this technology will learn of the relevant information early.
President, as I said earlier, given that the cost of doing business is high in Hong Kong and the external environment is unstable, it is difficult for SMEs to sustain their business operation. This does not only reflect the plights faced by the existing enterprises but also deters people who intend to start a business. In Hong Kong, there are many creative talents who are smart and capable. They wish to start a business to realize their ambitious plans but unfortunately, all things are difficult before they are easy, for they lack the "first bucket of gold" and eventually have to shelve their grand plans and become no more than a wage earner who works diligently and quietly to make a living.
As a saying goes, "it is much easier to have a thousand pieces of gold than creative ideas". Since the problem now is the lack of capital, the Microfinance Scheme is, therefore, enormously helpful in providing energy for business starters to make their "first bucket of gold". To help people engaging in creative work, the Government will revitalize historical buildings and develop creative industries landmarks, with a view to providing suitable space for them to carry out activities. These initiatives are well-intentioned. Encouraging business start-ups is precisely a shortcut to encourage creativity, promote competition and develop the economy. If I must find fault with it, I would say that these measures should be further widened and strengthened.
Whether for the existing SMEs or startups, when they have developed good products after experiencing untold hardships, they still need a good platform to promote their products to consumers while gradually building positive word-of-mouth to consolidate their brands, with a view to achieving the effect of "good wine needs no bush". But nowadays, the norm is "only the prestigious 9760 LEGISLATIVE COUNCIL ─ 9 April 2014 brands are good", while the non-prestigious brands can only work silently without reward. This is particularly the case in the Mainland market as consumers do not know their brands in the first place and so, the branding effect is all the more important. But it remains an old problem of the SMEs that they do not have the money for marketing work and lack a sales network. It is indeed very difficult for them to make a name for their brands.
The Dedicated Fund on Branding, Upgrading and Domestic Sales, or the BUD Fund, introduced in 2012 serves to provide funding for local SMEs to develop their brands, upgrade and restructure operations, and promote domestic sales. It has provided vigorous support for SMEs in respect of marketing and made a lot of contribution. The extension of the network of the Design Gallery of the Hong Kong Trade Development Council can provide more sales channels for local products which will, in turn, upgrade the reputation of the products and help explore more market opportunities. These two measures are most important to the marketing work of the SMEs.
President, the Working Group on Long-Term Fiscal Planning has just submitted to the Legislative Council the details of the projections of future government revenue and expenditure and measures for making improvement. The proposal on setting up a "Future Fund" is still at the initial stage, and there has yet been any final proposal on the modus operandi and use of the Fund. Some people have suggested that the "Future Fund" should be used for such purposes as retirement protection, healthcare, social welfare or infrastructure. I think this is open to in-depth discussions in the future. The Financial Services and the Treasury Bureau has said that consultation will be conducted in due course.
A sound and stable financial position is crucial to long-term development. However, I am worried that if the Government sets up too many of these "small vaults", such as the Community Care Fund and the like, there will arise the problem of the Government bypassing the Legislative Council procedures for funding applications which will mean depriving the Legislative Council of the power to monitor the Government. Therefore, the Government has to explain clearly the reasons for setting up a "Future Fund" and the relevant details, so that various sectors of the community can further understand and discuss the details in depth and in the meantime, it should consult public views extensively in order to forge a consensus.
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In all fairness, President, I think this year's Budget is, overall speaking, well above the passing grade, and I have pointed out in my speech the support provided by the Government to the SMEs. But frankly speaking, of the seven measures on supporting the SMEs in paragraph 101 of the Budget speech, we can see that the Government will either continue the implementation or extend the application period of five measures. In other words, these five measures are all existing measures to be implemented continuously. I agree that these measures are effective, but I hope that the Government can be more creative and innovative in explaining and discussing its proposals relating to SMEs.
President, in this world nothing is the best, for things can always be better. I hope that in putting forward their views on the Budget, Honourable colleagues of this Council will not focus on only one point to the neglect of all the others and reject the Budget in its entirety.
With these remarks, I support the passage of the Appropriation Bill 2014.
DR CHIANG LAI-WAN (in Cantonese): In this year's Budget, the Financial Secretary mentioned in the Introduction and the Concluding Remarks that we must work together to prepare ourselves for the future and avoid making today's spending a burden for the next generation, and we must even strengthen further our solid foundation for the well-being of the next generation. However, I do not understand what he referred to by the well-being of our next generation, and how we can properly strengthen our solid foundation.
When it comes to the well-being of the next generation, I think generally it means that we should make necessary arrangements for the future living of our children, so that they will have hopes for the future. We have all along urged the Government to set up a fund for infants in the hope that through saving up, the well-being of children can be accumulated bit by bit by reserving funds for meeting children's education and healthcare expenses as well as their university tuition fees while they are growing up and even the downpayment for buying a property after they have grown up. This will enable children to live their lives with peace of mind, and only in this way will they have a sense of security. Without a sense of security, how can there be any sense of well-being?
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As for the meaning of solid foundation, does it refer to the hundreds of billion or even a thousand billion dollars in the Treasury? Is this foundation solid? Or, does it refer to the tourism industry which has created jobs for many Hong Kong people and attracted tens of million tourists to visit Hong Kong? But is this truly a solid foundation?
In fact, we all know that there are indeed many problems because no matter how enormous the amount of savings is, it will be used up one day; and tourists will come to Hong Kong less frequently or stop coming here due to volatility in the economic cycles. By then, Hong Kong people would be facing great problems and difficulties. Therefore, the DAB has all along considered that in order to maintain a truly solid foundation, we must promote diversification of industries and make the utmost effort to develop high value-added products which are truly competitive, such as pharmaceutical products. President, I believe you have a good understanding of the Basic Law. Article 138 provides that the Government of the Hong Kong Special Administrative Region shall, on its own, formulate policies to develop Western and traditional Chinese medicine. But what has been developed over the years? Is it that the Government cannot hear it or see it, or is it that the Government knows nothing about it?
In the plenary session of the National People's Congress this year, Premier LI Keqiang also said that Hong Kong should promote and upgrade its own competitiveness. What is the underlying meaning? I think the answer is clear to all. So, if we really face the question of how we can upgrade our competitiveness in the future, or in order to allay the concern of the Financial Secretary about a structural deficit arising in Hong Kong a certain number of years later, we should develop the flagship industries in Hong Kong, and this can brook no delay.
Over the years, many people are concerned about the upward mobility of young people. I am glad that in this year's Budget, at least we can see that the Government has put forward some new policies in respect of life planning and the Qualification Framework (QF). But how should the right cure be prescribed for the problem to avoid the situation where the desired result cannot be achieved after the money is spent? In this connection, the DAB has some suggestions on the relevant policies. First of all, as a common saying goes, "success hinges on planning". With regard to the measures on life planning mentioned in paragraph 104 of the Budget, we have four relevant proposals.
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First, we propose that the Government should make comprehensive "human resources projections" on a regular basis because we need to understand the actual situation of the supply of and demand for talents in various industries, so that when young people enroll at tertiary institutions, they will know which industries they can join and which types of jobs are in need of manpower after their graduation in the future. Although the Government is concerned that these projections may not be accurate all the time, at least they can provide some guidance. It is not a problem if, for economic reasons, a certain industry cannot achieve development or it can develop only slowly by then. It is most important that we know the types of jobs needed in society in the future. Therefore, we hope that the Government will make "human resources projections" to avoid further manpower mismatches.
Second, we propose that the Government should make arrangements for quality talents in various trades and industries to become life coaches of young people and share with young people their work experiences and also what they have learnt at work. We hope that schools and the Labour Department will work together to invite successful people from various trades and industries to give talks or take part in experience sharing sessions at schools on a regular basis. We understand that many schools are already doing this now, but we found that talks which truly relate to the relevant professions and practical work experience are still lacking. We hope that this will enable students to gain a better understanding of the industries and find out more about the industries they like as well as the qualifications and pre-employment preparations required for joining the industries in future.
Third, I also hope that the Government can provide in government bodies or private enterprises internship opportunities for senior secondary students during holidays or the summer holiday, so that students can personally experience the operation of the workplace. Many Secondary Five or Six students will make preparations for university education, but do they have any idea about working in society and the situation of the workplace? When young people leave their schools and step into a workplace, they are like jumping from one cliff to another, and very often, it is very likely to fall down in the middle. If young people can take up jobs as interns before graduation or before they go to university, I think their adaptation will be easier when they enter the job market.
Fourth, we think that the Government can consider learning from the experience of some secondary schools in foreign countries. Some overseas 9764 LEGISLATIVE COUNCIL ─ 9 April 2014 secondary schools normally require their students to complete a job-related topical study report before their graduation from secondary education. In undertaking this study, students are required to gain comprehensive understanding of the modus operandi, demand for talents, industry culture, and so on, of a certain trade or sector and conduct in-depth studies. For instance, if a student said that he would like to join the bakery sector, he should interview the shop assistant and the baker and even the boss of a bakery in order to find out about the entire bread making process, the procedures, the operational cost, the sales situation, and other information. We hope that by exploring the industry independently and through their exchanges with practitioners in the trade and their observations, students can obtain certain understanding and knowledge of the industry which will be helpful to them in making the right decisions in the choice of disciplines, employment and even in starting a business.
Next, I wish to discuss the policy on the QF mentioned in paragraph 110 of the Budget. There are currently 19 industries with an Industry Training Advisory Committee set up under the QF in Hong Kong, and it is mentioned in the Budget this year that the Education Bureau plans to establish a fund of $1 billion to support the sustainable development of the QF. I think this development of the QF can encourage continuous learning among practitioners of the sectors concerned. It is a good thing that the Government will provide funding to the sectors, but it is more important that the funds are properly used. Here, I will make a few suggestions for reference by the Government.
First, why is the QF introduced? The purpose is to enable employees to clearly know what channels there are for them to move upwards. Can they have the opportunity to make more earnings if they take an additional subject and obtain an additional certificate? That said, what is important now is employers' recognition of the qualifications set out by the QF system. Therefore, the first point that we consider very important is that there must be close co-operation with various trades and industries.
Second, we consider that many young people and employees take an additional subject in the hope that they can make more income. We also consider it very important that the industries can provide a ladder of upward mobility or a pay scale for employees' reference. Only in this way can an incentive be provided for employees to work. For example, I was paid $15,000 when I first took up my job and after a period of time, if I am still making $15,000, I will ask when I will be able to make an income of $20,000. If I am LEGISLATIVE COUNCIL ─ 9 April 2014 9765 told that I will have a chance of making $20,000 after obtaining one more certificate, I will take up studies. This is a matter of investment and return. There are considerations to be made in doing business, and employees have considerations to make too.
Lastly, we also propose that the Government can organize various types of contests or competitions with the objective of upgrading the image of the skill-based industries as a whole. For example, as we can see from television programmes, there are many chefs contests or culinary competitions in overseas countries, bearing such names as "god of chefs" or "ironman" competitions. These will help upgrade not only the culinary skills but also the image of the sectors concerned. So, here, we call on the Government to provide subsidies to trade associations, encouraging them to organize more of these competitions and even consider organizing them jointly with television and radio stations.
President, today, I have made some proposals in relation to life planning and the QF in the Budget. Besides, with regard to the Government's plan to set up a "Future Fund", I have proposed the setting up of a fund for infants and the development of competitive industries. In fact, my proposals are in line with the spirit and vision of the Budget and particularly, in respect of the use of the "Future Fund", I hope that the Financial Secretary can think about it in greater depth. Some people have proposed that the Government should consider using the "Future Fund" for infrastructure development. But if we can invest the "Future Fund" into the fund for infants, we can still develop infrastructure projects in the future through this fund for infants, and it will truly be our next generation who can benefit from this most.
Let us strengthen our solid foundation for the well-being of our next generation to enable the next generation to see their future and have more hopes for their lives, injecting more positive energy and vitality into the young people. I wish that the relevant policies will be introduced early and implemented successfully. I so submit.
MR ALBERT HO (in Cantonese): President, in his Budget speech the Financial Secretary repeatedly mentioned the long-term competiveness of Hong Kong. This is indeed an important issue, and I will spend my limited speaking time expressing our views on it.
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The Global Competitiveness Report published by the World Economic Forum this year pointed out that the competitiveness of Hong Kong has dropped to the seventh place, whereas our competitor, Singapore, which has attracted much attention, has surpassed Hong Kong as its ranking has climbed up to the second place. There are several points that we must particularly pay attention to, and I will analyse them in detail. First of all, in respect of the scores in individual aspects, the competitiveness of Hong Kong has, quite surprisingly, dropped the most in innovation. This is indeed most shocking and puzzling to us. Singapore has even scored higher than Hong Kong in innovation. But comparatively speaking, Hong Kong is a cosmopolitan city and a very free and open metropolis where people enjoy the freedom of speech, of thinking, of assembly, of publication, of procession, and so on, and what is more, there are plenty of opportunities for investment and doing business and there is also a free flow of capital, and the flow of information here is definitely more developed than in Singapore. Why has Hong Kong compared less favourably with other places in respect of creativity or innovation and is hence given a lower ranking?
If we take a further look at the situation, we will find that higher education in Hong Kong is comparatively more developed. We have talents and capital in various aspects, and in respect of infrastructure, as Members all know, many different investments have been made. Despite that the local education system giving cause for criticism in many areas, our higher education and the relevant investment have remained comparatively inadequate, our basic education still has a lot to be desired and the Government completely lacks foresight in early childhood education and has failed to properly draw up plans on various fronts. Yet, these inadequacies should not lead to the continued decline in Hong Kong's ranking in innovation.
Overall speaking, the biggest problem with Hong Kong lies in our governance still being led by a bureaucratic culture. How should we describe this bureaucratic mindset? That is to say, even for politically accountable officials, many of them are happy to cling to the past advantages, not willing to take risks. They stick to the old rut and refuse to bear risks and make progress. In this world today where we either keep moving on or keep falling behind, I would say that we even face the danger of being eliminated.
In fact, President, as early as more than two decades ago, there was already the view that Hong Kong must develop towards the diversification of industries. This was already pointed out in the reports published in the 1990s. During LEGISLATIVE COUNCIL ─ 9 April 2014 9767
TUNG Chee-hwa's era, he also pointed out in his first policy address the need for Hong Kong to develop more industries, such as developing into a floral port, a Chinese medicine port, a centre for wine sale and distribution, and so on, with the objective of developing a high value-added knowledge-based economy. These objectives absolutely should command support, but the Government lacks the resolve to take bold and resolute measures to promote industries and businesses, particularly the development of the innovative technology industry; nor has it made adequate investments.
Even though the Government has claimed that it has provided tax concessions and developed industrial estates and the Science Park, are these measures adequate? We think that they are not adequate. Why? Because we must also attract inward investments and work at full steam to train creative talents in Hong Kong. These are the areas that we need to deal with in a focused manner in order to make strategic social investments. In many places, strategic low-interest loans are provided to support R&D activities and better still, bold and resolute measures are adopted to introduce policies on tax and land concession, with a view to promoting the development of the relevant industries.
I am not suggesting that the Government should rush to engage in business operation; nor do I intend to give people the impression that the Government should subsidize major industries. I have no such intention. I have even strongly criticized the Cyberport policy, for it is actually a packaged residential property development project though it appears to be providing support to the development of high technology on the surface, and this has given cause for much criticism. What we are suggesting is that it is necessary to take more aggressive measures. Anything that can attract large-scale industries to make investments in Hong Kong in a transparent manner and in compliance with the rules and which can promote the local creative industries should be implemented and is worth implementing. It is only through promoting the creative industries and training more creative talents that the advantages of Hong Kong as a free metropolis can be brought into greater play. This will create a bigger pool of talents and fully give play to their talents, thus providing more opportunities for young people and at the same time speeding up social mobility, so as to avoid a suffocating social environment where young people have neither the opportunities of promotion nor the opportunities of moving upward. This is the first point.
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The second point is related to the major policies in respect of financial services. I understand that Hong Kong is a place with a free flow of capital and investment from a lot of international capital and even Mainland capital. But the first problem that we face is the restriction of the linked exchange rate. The linked exchange rate certainly has merits as it can stabilize the local financial system. But just take a look at what has happened since the financial tsunami in 2008. The Quantitative Easing policy of the United States has indirectly resulted in continued depreciation of Hong Kong dollar. But judging from the strength of Hong Kong dollar, actually Hong Kong dollar should not have depreciated as much as it is now in tandem with the US dollar. Many reports have pointed out that the value of Hong Kong dollar according to the purchasing power parity today may probably be HK$4 to US$1. What are the consequences then?
The consequences are that in order to preserve the value of their capital, many people have invested Hong Kong dollars into the property market, and this is one of the factors causing property prices to surge. Added to this is Donald TSANG's blunders in the housing and land policies during his term of office as he did not only impose a moratorium on the sale of public rental housing and Home Ownership Scheme flats, but he even deferred the time when land was supposed to be made available to the market, thus leading to the evil consequence of surging property prices. The "three high" policies has persisted. Real estate hegemony has plunged the entire society into sufferings. The operational environment of various trades and industries has further worsened, the people are in dire straits, and there are many discontents and grievances in society. Have the authorities ever thought about resolving this problem?
Many people say that the linked exchange rate is a very sensitive issue which should not be discussed. But I wonder if Members still recall the remarks made by former Chief Executive of the Hong Kong Monetary Authority (HKMA), Joseph YAM, shortly after retirement from office, which still ring in our ears. He said that Hong Kong has to think about this issue with a new mindset. He even said that the HKMA has a number of options to deal with the linked exchanged rate system in order to meet the challenges of the new environment. Given this question, does the Financial Secretary have the answer? Or will he purely stick to the old rut and consider it best to keep everything unchanged regardless of Hong Kong people's suffering from the depreciation of Hong Kong dollar which is also a cause for the drastic surge in property prices?
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President, another problem is that we are also worried about a fall in Hong Kong's ranking in two other indexes. One is our scores in honesty and probity. An organization called Transparency International pointed out that the probity index of Hong Kong has been on a continual decline. This is certainly related to some major corruption cases that happened recently and even the incident of a former Commissioner of the Independent Commission Against Corruption having an integrity issue which has been strongly criticized by the Public Accounts Committee of the Legislative Council. These are eye-catching incidents which have aroused concern about whether Hong Kong will be contaminated and adversely affected by the undesirable trend of corruption in the Mainland.
Certainly, we do not necessarily have to accept all these comments and allegations without reservations and then assert that corruption has become an increasingly serious problem in Hong Kong. Having said that, this problem needs to be addressed squarely. We absolutely must not lower our guard and it is absolutely necessary to maintain a clean government for this is a major advantage of Hong Kong. It is only with a clean government and the rule of law that Hong Kong has managed to maintain its good reputation.
The other index is the rule of law index. The assessment of this rule of law index has been made by an organization known as The World Justice Project since 2006. Hong Kong ranks the 16th, losing out to Singapore yet again. A senior accountability official has said to me recently that there is no reason for Hong Kong to lose out to Singapore because we all know that in Singapore, it is always the Government which has the say and it is wishful thinking to take the Government to court because everyone knows the result before the case is actually heard in court, and this is all true. However, the organization conducting this assessment said very clearly in its report that they take an overall perspective and rule out the political factors. In spite of this, I think the Government must still have a certain part to play anyway and so, Singapore must have lost certain marks for this, but why does Hong Kong still rank lower than Singapore? In my view, there are several points that can explain why Hong Kong is losing out.
First, in respect of governance, the Government has played a governing role in various aspects relating to industries and businesses, but there have been more and more cases that make people feel that the Government is unfair, partial and far from transparent. The licensing of the Hong Kong Television Network Limited is the best case in point. Members of the general public as well as many 9770 LEGISLATIVE COUNCIL ─ 9 April 2014 people locally or overseas who are concerned about this issue consider that the Hong Kong Government has failed to justify its decision. This incident has caused Hong Kong to lose many marks. In fact, as we can see, Ricky WONG and his company are creative and they are sincere in dedicating resources and efforts to television production and yet, their development has been stifled.
Second, the financial regulators are making people feel more and more strongly that they only swat flies but do not hunt down tigers and particularly, they fear the "red tigers" the most. This is a very serious problem. As we all know, the incident of the CITIC Pacific Limited happened many years ago but the investigation is still in progress. Compared with the incident involving China Aviation Oil, of which the company scale is 50% smaller than CITIC Pacific Limited, Singapore managed to complete the investigation and institute prosecution in only two or three years, and the person in charge who arbitrarily engaged in speculation was put behind bars. How will the Government explain this? The Apex Horizon incident is another example but again, we do not see the Government finding any clue to ensure effective law enforcement.
Therefore, President, I think we cannot refrain from addressing these problems squarely because without a sound governance structure (The buzzer sounded) …
PRESIDENT (in Cantonese): Mr HO, your speaking time is up.
MR ALBERT HO (in Cantonese): … it will be impossible to enhance our competitiveness.
MR CHAN CHI-CHUEN (in Cantonese): President, it was the Chinese Composition paper of the third Diploma of Secondary Education (DSE) examination the day before yesterday. One of the questions requested candidates to write about the title "Silence is necessary". The article begins with the following sentence, to this effect: "Something happened today, I wanted to state my opinions at the time, but decided to remain silent in the end. I think silence is necessary."
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Today is an opportunity for Members to debate on the Appropriation Bill 2014 (the Bill) ― the Budget ― which is held once a year. Regarding the Budget, I would say that "he makes incorrect estimate every year and is unwilling to spend even though there is money". In the Budget this year, it is projected that Hong Kong will face a fiscal crisis seven years later, and so the Government should control its spending this year. What are the responses of the public towards this projection? They think: "If the Financial Secretary had been incorrect in making the estimate for a year in previous Budgets, how can we trust that his projection for the Budget in seven to eight years' time will be correct?
Regarding this "Incorrect Budget" should we adopt the attitude that "silence is necessary" as mentioned in the composition topic just now? If we apply our present situation to that composition topic, it will read: "The Legislative Council conducted the Second Reading of the Appropriation Bill 2014 today, Members wanted to state their opinions at the time" ― I believe 50 to 60 Members will speak today, and they will state their opinions ― "but they decided to remain silent in the end."
Certainly, silence does not mean not uttering any sound. The so-called "silence" is a metaphor, a metaphor of acceptance and taking no further action to seek changes to the current situation. Certain Members may make a few perfunctory remarks of rebuke. Others may spend 15 minutes of their speaking time to rebuke the Bill but choose to let the Bill pass eventually. I would like to point out that though certain Members may vote against the motion in the end, they know at heart that the Bill will be successfully passed in the end even if 27 Members vote against it. As for other Members who choose to vote for the Bill, it is because they consider the passage of the Bill necessary. Even though the estimates in the Budget had been incorrect year after year, even though the Government is unwilling to spend despite having the money, even though the public has rebuked it strongly and even though Members have criticized it, the Budget is passed every year without changing a single word. The necessary silence in the previous setting is replaced by the necessary passage of the Budget. In fact, the passage of the Bill is neither a multiple-choice question nor a true or false question. It is a false proposition, for the passage of the Bill is necessary.
President, Honourable colleagues, particularly Members from the pan-democratic camp, the Budget before us is a Budget full of lies, a "fiscal fraud" presenting incorrect estimates year after year. We are facing finance officials who are willing to play the skinflint and ridiculous policies seeking to 9772 LEGISLATIVE COUNCIL ─ 9 April 2014
"return wealth to the wealthy". Worse still, we are given an alarmist talk this year and empty talks on the future. Members will condemn the Budget for its getting more undesirable year on year and not passing the grade, or even scoring a zero. Do we have the authority to return the Budget to the Financial Secretary for a redo? Definitely not. As such, the outcome eventually will be "the Bill passed without any amendment". Apart from rebuking and voting against the Bill, can we Members of the Legislative Council do anything about it?
President, is there any funding provision in the world which passage is necessary? According to your mathematics attainment and logical thinking, can you tell the general public how necessary is the so-called "necessary" passage mentioned today? If a machine breaks down, its operation needs to be stopped for an examination. If so, why can we not call a halt to the Government when the Government breaks down? What kind of logic is that? Why do Members not seize the opportunity to state their opinions and argue with reasons in the Chamber, making an all-out effort to call the Government to a halt, a machine which is out of order or on the wrong track?
The Financial Secretary said in the Budget that, "If government expenditure keeps growing and outpacing economic and revenue growth, a structural deficit would be inevitable." President, a skinflint prefers using uncertain scenarios like "it is uncertain whether this future crisis will occur" and "it is uncertain how likely this crisis will occur" to justify his unreasonable behaviour of refusing to spend even he has the money today. I will not argue whether this future crisis, the structural deficit, will occur for the time being. Yet regarding this estimate represented by the so-called "crocodile mouth" ― the math symbol of "greater than", showing the imbalance between expenditure and revenue ― the capital is not factored into the calculation of the estimate.
In the past few years, we often said that the Treasury was "flooded" with cash and the Government was enjoying wealth while the public were living in poverty. Yet the Government managed to push aside all these problems by giving us two words this year ― "future crisis". However, the figures tell the reality. In the 161st paragraph of the Budget, which is about the Medium Range Forecast, it is stated that, "Fiscal reserves are estimated at approximately $799.2 billion by end-March 2019". Financial Secretary, this amount is $53.3 billion more than the $745.9 billion this year.
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I often use the parable of a rich man as an analogy. The rich man's wife was sick and asked the rich man to give her money for medical consultation. His daughter suffered from malnutrition and asked him to give her money for better meals. The rich man's son was ambitious and wanted to study overseas, so he asked the rich man for money. Unexpectedly, this husband and father told his wife and children that, "Though our family is quite well-off for the time being, and that we are doing better than many others and I have money at hand, the fortune teller forecasts that my family will experience dramatic changes in seven to eight years. I do not fully believe in the remarks of this fortune teller, yet he has divined that those things will happen. So, sorry, my love, my daughter and my son, I cannot help you today. I cannot spend my money carelessly."
The Hong Kong Government and finance officials are comparable to this husband and father, who is rich but mean. He has deliberately ignored and distorted the immediate needs. In that case, how can we trust or expect them to be sincere and anxious about our future? Hong Kong people are not unwilling to sacrifice their immediate pleasure for future planning. At issue is whether Hong Kong people are capable of coping with the immediate problems? If they are not capable of tackling the problem today, how can they plan for their future?
Most people may have experienced hunger pangs ― some people may choose to experience hunger to understand the plight of the poor, as in the television programme "Rich Mate Poor Mate". Some people go on regular fasting as a religious practice. Some people go on a hunger strike to prove their position and strive for genuine universal suffrage or to "topple LEUNG" ― I have experienced this. Unfortunately, 1.5 million people in Hong Kong do not have the right to choose whether or not to experience hunger or hunger pangs. Every day, 300 000 children in schools do not have enough food, and some may even attend class on an empty stomach. Every day, when we walk in the street, we will meet a few elderly persons, and one of them will be suffering from nutritional imbalance.
May I ask the Financial Secretary and the Secretary one question: "Do you know the weight of a lunch box?" I am not asking about the price of a dish of rice with grouper in cream corn sauce, but the weight of a lunch box. To many elderly people, a lunch box is as heavy as me ― 60 kg. Based on the rate of 50 cents for 1 kg of waste paper, an elderly person has to collect waste paper equal to the weight of a middle built man to earn enough money for a lunch box, a meal to give them strength and warmth. Scavenging is no longer the privilege 9774 LEGISLATIVE COUNCIL ─ 9 April 2014 of street sleepers. Many elderly people now living in private housing are in poverty. Some of them may be luckier to have their children paying the rent for them, yet they do not receive any money for their daily living. My Member's Office has come across an elderly person who can only buy two packets of instant noodles to relieve his hunger every day.
The People Power calls for a $10,000-refund. What does it mean? To the elderly, this mean they can barely have some more food ― let alone enough ― for each meal and to continue to lead a more dignified life. To many people marginalized by society, the $10,000-refund is not a candy-handout but a handout to prolong their survival. In the eyes of the Financial Secretary … He often says that we need to "cut down on sugar". In fact, only the middle class will put in a teaspoon or half a teaspoon less sugar in their coffee, and this is what he means by "cutting down on sugar". However, to the grassroots, this one teaspoon or half teaspoon of sugar is their hope for the whole family next year.
I know that many Members in this Chamber oppose a "universal refund". Yet when the Government implemented the cash refund of $6,000 back then, they had not opposed it. Some Members had stood by the Government to show support. Some people think that giving "cash handouts'' is the easiest and most lazy way for the Government, for the Government only needs to return to the public the money it has collected from them. They compare this to passing money from one's left hand to the right and vice versa. They consider that giving cash handouts means the Government has done nothing. This interpretation is confusing. They utterly do not know what redistribution of wealth means.
There is one point which I do not understand. On the one hand, the Government is unwilling to make a "universal refund", yet on the other, it introduces relief measures which are no different from cash handouts every year. One of the measures which we strongly oppose is the waiving of rates. I really want to ask: What is the difference between waiving rates and giving cash handouts? Some Members in the pan-democratic camp gnash their teeth to oppose the giving of cash handouts, yet they support waiving rates. At last, I know the difference between the two. The waiving of rates is "returning wealth to the wealthy" or at least "returning wealth to property owners". People with more properties will get more from the waiving of rates. As for the $10,000-refund, it is returning wealth to the people, poor and rich alike.
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Some people say that if a universal refund of $10,000 is introduced, LI Ka-shing will also be granted $10,000. They query giving that $10,000 to a person as wealthy as him, and they consider it a waste of public resources. However, have they ever considered how much LI Ka-shing will get from the rates waiver? He will receive tens of million dollars. Why should he be given tens of million dollars for no reason? What kind of logic is that? For this reason, the People Power strongly opposes waiving rates.
At the Subcommittee on Rating (Exemption) Order 2014, Members put forth a number of proposals, such as capping the number of units for which an owner is entitled to the rates waiver and restricting the granting of rates waiver to residential flats and not commercial buildings. After calculation, some Members asked whether rates could be waived for four quarters. The Government's answer was in the negative, for waiving rates for four quarters would incur an additional expenditure of $2.1 billion and enormous administrative costs.
Since the Government has over $2,000 billion in its possession, the People Power calls for a "universal refund". Yet the Government thinks that we are robbing the Government. The League of Social Democrats calls for the implementation of universal retirement protection, but the Government refuses. It is evident that the Government is unwilling to formulate a long-term policy and unwilling to give a refund. Worse still, it pretends to be poor this time around. It does not really matter, for we have other proposals. The People Power has proposed to the Government that it should increase its revenue by increasing tax, but it should not target at the middle class nor cause Hong Kong people to pay. We propose levying an arrival tax. Based on the number of tourist arrivals this year, the Government would have received an additional tax revenue of $3 billion, sufficient to cope with the expenditure incurred in providing the low-income working family allowance. The public at large support this proposal, but the Government refuses to consider this. LEUNG Chun-ying even said that it was a unilateral policy based only on the interest of Hong Kong people, giving no regard to the feelings of Mainlanders. Our response to his remark is that: "If that is the case, why do you introduce the "Hong Kong Property for Hong Kong People" measure?" But then, I realize that the "Hong Kong Property for Hong Kong People" measure has been withdrawn. I think the Buyer's Stamp Duty (BSD) will soon be withdrawn too, for the BSD is also a unilateral initiative based only on the interest of Hong Kong and targets at Mainlanders.
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President, since the Budget has not answered the aspirations of the public, intensifying the disparity between the rich and the poor, the People Power will by all means prevent the Legislative Council from passing this unjust Budget, pressing the Government to face squarely the views of the public, to adopt proper fiscal policies and to improve the living standard of the public. This year, I have only proposed 132 amendments, lesser than last year, which was 155, so those Members should stop accusing me of carrying it too far. Long Hair is the one who carries it too far.
On the contrary, I have learnt from the experience of the President cutting off the filibuster last year, when many of my meaningful amendments were not given reasonable time for discussion since the debate on my amendments was arranged for a later session. I hope that by reducing the number of amendments, Members may discuss more amendments in a focused manner. Having said that, no matter I have put forth 100 amendments or 50, people will still say that I will be filibustering. I do not understand one point. If the President allows us to propose the amendments, but does not allow reasonable and sufficient time for their discussion, the Rules of Procedure may as well be amended to the effect that no amendments can be proposed. It will be much simpler. It will save all the troubles and discussions on cutting off the filibuster.
In my view, we exercise our right under the Rules of Procedure to propose amendments, so as to strive for the opportunities to convince other Members to support our amendments. And even if the amendments were not accepted, it would have at least enabled the public to understanding our views on each of the financial provisions. We also hope that other Members will not have mysophobia towards filibuster, which means once they know a Member intends to engage in filibustering, they will refrain from speaking even if they intended to do so initially.
I hope that Members (The buzzer sounded) …
PRESIDENT (in Cantonese): Mr CHAN, your speaking time is up.
MR CHAN CHI-CHUEN (in Cantonese): … will speak up enthusiastically by then.
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MR MA FUNG-KWOK (in Cantonese): President, in recent years, public expectation for the Budget is often focused on the amount of the surplus, how many "candies" will be handed out or how they will be handed out by the Financial Secretary, and so on. Therefore, this year's Budget is a bit disappointing to some members of the public.
Unlike the past few years, the surplus this year is only $12 billion, and compared to his generosity or substantial giveaways in the past, the Financial Secretary has obviously pulled the purse strings more tightly this year as he only proposed the allocation of about $20 billion for one-off relief measures for the grassroots and the one-off tax rebate for the benefit of the middle class. Despite a slight increase in the allowances for maintaining dependent grandparents, it only gives people the impression that it is better than none. With regard to the allowances that the New Century Forum and many middle-class people have looked forward to, such as an increase in the child allowances, new allowances for building repairs and maintenance, private medical insurance and private housing rental, the Budget has not touched on them at all. There is no denying that this is a far cry from the people's expectation.
President, while it seems on the surface that the income of many middle-class families is not low, they have to meet a lot of expenses and take care of their parents and children. Most of them have to pay high rentals or make mortgage loan repayments and pay for their children's education expenses, and their standard of living is not as good as it is thought to be. The stability of a society and whether its future is optimistic is to a very large extent linked to the sentiments of the middle class actually. In the past when the economy was prosperous, many middle-class people were able to support their own living and did not expect government assistance. But time has now changed and despite the economic growth, many middle-class people still feel to be greatly burdened by their living and under enormous financial pressure, and they hope to be provided with government support. Among the middle-class people who should lead a carefree life, some are actually in stringency and have become the "miserable class" who can hardly make ends meet. How can there be no grievances in society?
While the portion of "candies" handed out this year is not much, how the Government will utilize the fiscal revenue and fiscal reserves to ensure that they are well spent actually warrants greater concern than how many "candies" are handed out. For example, some colleagues called on the Government to give a cash handout direct. I have great reservations about this. Given that the 9778 LEGISLATIVE COUNCIL ─ 9 April 2014
Government's fiscal surplus has decreased considerably and the recurrent expenditure has increased quite substantially this year, it is all the more necessary for us to put the reserves to good use. The relief measures should be target-specific and resources should be expended on areas where there is the greatest need in society. In fact, according to the past experience, a cash handout can produce only short-lived and limited effects in improving the people's livelihood.
President, as regards the question of how the savings should be used, the Financial Secretary has cited the report of the Working Group on Long-Term Fiscal Planning and given society a warning, so that society can expeditiously conduct discussions on how we should face a structural deficit which may arise seven years down the line the earliest. He also proposed that the $219.7 billion-Land Fund should be transformed into a "Future Fund" for meeting the expenditure on major infrastructure projects in order to continuously take forward economic development. After this proposal was put forward, some people considered the Financial Secretary's warning alarmist talk, while some people took exception to the proposal of channelling the Fund to infrastructure development, suggesting that financial resources should be pooled together to address problems relating to the people's livelihood. I think no matter what views we hold, the question of how the savings can be put to good use should be an issue in this Budget which warrants continuous and in-depth exploration.
President, to many middle-class people, the best way for the Government to put the reserves to good use is not simply to economize on spending and act as a "Scrooge". Rather, they hope that the Government can invest in Hong Kong and boost the Hong Kong economy to make the pie bigger, thereby providing quality job opportunities for Hong Kong people and enabling young people to give play to their talents. For this reason, I hope that the Government can properly make long-term planning and upgrade the competiveness of Hong Kong. In the meantime, the Government should increase social investment in education, healthcare, and so on, making use of public expenditure to promote economic development and improve the quality of living of Hong Kong people. Only in this way can the long-term competitiveness of Hong Kong be upgraded and public expenditure be turned into social assets to bring greater benefits to society.
The Financial Secretary has made Hong Kong's competitiveness the theme of the Budget this year and proposed some new initiatives for the innovation and technology industry, which is worthy of support. However, we are slightly worried that with regard to the development of other industries where Hong Kong LEGISLATIVE COUNCIL ─ 9 April 2014 9779 enjoy clear advantages, the Financial Secretary has neither proposed a new direction nor put forward new support measures. Looking around the economies neighbouring Hong Kong, we will see that they have actively explored different directions of development in recent years. For instance, the Shanghai free trade zone and the other free trade zones to follow; the diversified and innovative Korean economy which aims to speed up economic upgrading and restructuring, and so on. As a saying goes, we either keep on moving ahead or keep on falling behind. Faced with these powerful and fierce competitors, we must seize the opportunity to strengthen our existing edges and actively identify our new positioning and foothold in order to consolidate Hong Kong's economic position.
Take the cultural and creative industries and sports about which I am more concerned as examples. In this Budget, not much is mentioned and measures are lacking in these areas. In the Budget speech of the Financial Secretary, apart from mentioning the need to keep enriching our cultural, art and sports programmes in a paragraph on the development of tourism, he did not further give his views on cultural and sports development. As for the proposal to develop a sports centre in Tuen Mun and Sha Tin in the Budget and the development of such projects as a community cultural centre in Ngau Tau Kok, these have long been included as items for discussion and are not new at all.
In respect of government spending, there is no denying that this year, the Government has increased the estimate for cultural development to $3.9 billion and the expenditure on sports, which is close to $3.8 billion, is not small in amount. With regard to the expenditure on culture, I welcome the Government increasing its support for the nine flagship arts groups and increasing the expenditure for the Arts Development Council (ADC) by 35.3% to nearly $130 million. But if we factor in inflation, the provision for the ADC can only offset the past inflation rates and restore the funding level of some years ago. Having said that, this has responded to the demand for enhanced support for local small and medium arts groups put forward by the local cultural and arts sector over the years. In fact, following the implementation and development of the West Kowloon Cultural District (WKCD), there is increasingly fierce competition for talents in arts administration. The pressure faced by local arts groups in respect of human resources and financial resources has also greatly increased. Therefore, it is imperative to enhance the support for arts groups, especially small and medium arts groups. More importantly, irrespective of the amount of resources provided by the Government, the results may not necessarily be desirable in the absence of good policies and government facilitation. Our 9780 LEGISLATIVE COUNCIL ─ 9 April 2014 cultural policy has not been reviewed for many years and a review is indeed warranted, in order to make adjustments in the light of Hong Kong's new cultural developments both locally and overseas, such as how we can support the development of the WKCD and how we can make use of our local and overseas offices to promote local culture and arts and facilitate exchanges.
As regards sports, the Multi-purpose Sports Complex (MPSC) at Kai Tak is now under active planning. To support this major sports hardware facility, the development of sports software, such as the training of and support for sports administrators, must not be neglected alongside the development of the MPSC. The commissioning of the MPSC will offer an opportunity for the development of the local sports industry but so far, we have yet seen the Government presenting a vision to develop the sports industry. In fact, I proposed a motion on the sports policy for debate last month. Many Members had spoken in the debate and pointed out many obstacles to the local sports development, stressing the need for the Government to re-examine and rationalize the sports policy. I hope that this aspiration can be positively and expeditiously answered by the Government.
President, in respect of enhancing competitiveness and industry development, this year's Budget has put most of its attention on the development of the four traditional pillar industries. In comparison, with regard to the emerging industries which have been promoted continuously in recent years and except for the innovation and technology industry, the Budget has not proposed special support measures for other emerging industries, such as the cultural and creative industries. According to the statistics published by the Census and Statistics Department (C&SD) in March, the share of the local cultural and creative industries in the Gross Domestic Product increased from 3.8% in 2005 to 4.9% in 2012, whereas the workforce in the cultural and creative industries also increased from 5.1% in 2005 to 5.5% in 2012, which is most outstanding compared with other emerging industries and higher than the 4.5% of the tourism industry.
In fact, apart from Hong Kong, the neighbouring regions, including Taiwan, Japan and even the Mainland, have also actively developed their cultural and creative industries in recent years. Korea has even vigorously provided policy support and injected resources into these industries and become a good example in successfully developing cultural and creative industries. A recent Korean TV drama series, "My love from the star", has swept across Asia. This has brought handsome revenue for this drama series as well as the lead actor and LEGISLATIVE COUNCIL ─ 9 April 2014 9781 actress and what is more, the Korean drama series as a whole are once again put under the spotlight. The fees for general broadcasting rights have risen substantially and this has directly benefited the industry. Besides, this drama series of "My love from the star" has also brought a series of peripheral effects. The filming locations have become popular tourist attractions, thus indirectly boosting the tourism industry, while "fried chicken and beer" that appeared in the drama series have become trendy food.
I must point out that the power of the Korean culture does not rely on sheer luck; nor does it come about by chance. The attractiveness of the Korean culture is the fruit of the Korean Government's strong and vigorous commitment, facilitation and support for the cultural and creative industries over the years. While we admire the powerful effect of the Korean culture, we cannot but sigh with regret. In the past, our music, television and movies had once taken a leading position and effected a strong influence in the Asia-Pacific Region and Chinese communities, but as the neighbouring regions have continuously accelerated the development of their cultural and creative industries, our influence has been shrinking while theirs is growing. In fact, the local cultural and creative industries in Hong Kong still have certain strengths. Take the film industry as an example. In the Oscar Academy Award ceremony just passed, a local movie, "The Grandmaster" had nominations for Cinematography and Costume Design. While "The Grandmaster" eventually did not win any award for Hong Kong, this is the first time that a Hong Kong movie has an Oscar nomination, marking an important milestone for the development of Hong Kong films and reflecting that the quality of local movies can compete with others on the international stage. In fact, the local cultural and creative industries still have great potentials for development. What is lacking is only the Government's role as a facilitator to help the industries upgrade their competiveness and achieve further development.
Rightly as the Financial Secretary said in his speech, our well-established trading and logistics industry, financial services industry, tourism industry and professional services have been showcasing Hong Kong to the international community. They have become Hong Kong's pillar industries because they managed to capitalize on their own strengths as well as Hong Kong's edge. We certainly must draw up sustained measures to ensure the continuous development of the four pillar industries and maintain our advantages. However, relying solely on the development of the four pillar industries is indeed not a good policy to ensure healthy development of the economy. In fact, the local economic 9782 LEGISLATIVE COUNCIL ─ 9 April 2014 development is monotonous and in the current economic environment, young people with different potentials cannot bring their talents into play. Although Hong Kong has almost achieved full employment in recent years, there are still quite many jobs in the low value-added service industries. These problems have long given cause for criticism in various sectors of the community. The community's call for the Government to identify new growth points for the economy and inject diversification into economic development is not new at all.
In the modern days of the 21st Century, competition is fierce in the global economy. If Hong Kong still relies on the past advantages or if it just looks on while the industries are stewing in their own juice, this would do more harm than good to the upgrading of our competitiveness. Although the Government has taken up a certain role in promoting industries in recent years, such as setting up the Hong Kong Film Development Council, setting up an Innovation and Technology Fund and "CreateHK", and so on, these measures are far from adequate. The Government should assume a more active role and proactively conduct studies to understand the problems encountered by the industries in their development, and also formulate policies and adopt measures to help the industries solve such problems, thereby breaking the barriers in the development of the industries and hence promoting the healthy development of the local industries and upgrading the overall competitiveness of Hong Kong.
President, competitiveness is the theme of this Budget. As pointed out by a number of international study reports on competitiveness before, a hidden worry of Hong Kong's competitiveness is our reliance on the financial services and real estate industries in the course of industry development. However, this Budget still has not displayed a new mindset of the Government in the development of emerging industries; nor has the Budget demonstrated the determination of the Government to develop the emerging industries. The Financial Secretary is concerned about our competitiveness but his concern is not reflected in the specific contents of the Budget, and this is a bit disappointing. President, I so submit.
MR TOMMY CHEUNG (in Cantonese): President, a fortnight ago, the programme, Hong Kong Connection, of Radio Television Hong Kong, explored the issue of importation of foreign labour. In one of the cases, an employer of an Indonesian restaurant wished to open a branch and would like to hire a chef from Indonesia to work in Hong Kong, but his application was rejected because LEGISLATIVE COUNCIL ─ 9 April 2014 9783 of "No reason". The boss said that he would not open a branch because his application was rejected. Tell me, who is going to suffer a loss at the end of the day?
In fact, the industry has long complained about the increasingly higher threshold for the importation of labour. According to the statistics on the Supplementary Labour Scheme of the Labour Department, in 2013 there were 301 cases of application for importing chefs to work in Hong Kong, more than double the number in 2012, but only 32 applications were approved, which was 30% less than that in 2012, not to mention the importation of dishwashers because their applications will never be approved. But why was there a drop in the number of approved applications for chefs? Did the Labour Advisory Board adopt impartial and objective standards in assessing the applications, or was each such application just a tug-of-war between employers and employees and whichever side with greater perseverance and a louder voice would win? For such a mechanism for importation of labour, how can the industries trust it? Financial Secretary, how can we maintain our competitiveness?
Many industries are competing for workers nowadays. In the catering industry there is always a shortage of labour. The quality of service has declined and consumers have been complaining though they still continue to patronize the restaurants for most restaurants are equally bad anyway. The small enterprises, micro enterprises, or some old restaurants are the hardest hit. As we can often see from the media, some bosses have said that their own wages are not even up to $12,000; some even have to ask their wives and children to help with the dishwashing work, and those who feel worn out or cannot persist with the struggle can only wind up their business or withdraw their capital.
In fact, the importation of labour actually cannot help reduce costs but at least it can stabilize manpower, which is helpful to the service quality and development of the enterprises. The ageing of population and shrinkage of the labour force will add to the burden on the small and medium enterprises (SMEs) in the long term and impede the diversified and upward development of society. If the authorities do not seriously review the policy on importation of labour to dovetail with the demographic and industry development in Hong Kong, doing nothing more than the cosmetic work of expediting the vetting and approval procedures, this really would not be of any actual help to the long-term competitiveness of Hong Kong.
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Turning back to the employees, they always raise the criticism that the terms of employment in the catering sector are so undesirable that nobody would wish to work in it. President, the industry has told me ― actually I often hear of these stories and I have just heard of one similar story today ― they told me that there are people going to them applying for a job every day but they all ask to be paid in cash and what is more, they do not want to be covered by the Mandatory Provident Fund (MPF) Scheme. This is tantamount to asking the employer to conspire with them to act against the law and fortunately, the employers who relayed these stories to me did not accede to their request. I also reminded them not to do so. If they do anything in breach of the law, they had better aim higher, and if they are caught for such a minor breach of the law after having invested so much money into their business, it just does not quite worth it. Of course, we will ask whether these people are recipients of Comprehensive Social Security Assistance (CSSA). I dare not assert that they are. But tenants of public rental housing (PRH) may wish to evade the means test.
At present, the household income limits of PRH tenants are $9,670 for a single-person household and $14,970 for a two-member household. Financial Secretary, a dishwasher makes a monthly income of $12,000 and if both the husband and the wife work, they will make a monthly income of over $20,000, so how can they be eligible for PRH? What should they do if they cannot live in a PRH flat? All they can do is for one of them to take up a job whereas the other works casual jobs and makes an income in cash, putting the boss at risk of being caught and jailed. The income limit for a four-member household is $23,910. Even in the case of a working couple with one son and one daughter, as the monthly salary for a dishwasher is currently $12,000 and if the husband may, of course, earn a bit more, the household income will already exceed the limit of $23,910. You may say that a lot of PRH tenants have jobs and make earnings exceeding the income limit. We have conveyed the view to the Secretary for Transport and Housing, asking him whether the limit should be relaxed a bit to address the problem. But the Secretary would say that this would result in more people being waitlisted and in that case, where could they identify land for developing PRH flats? So, do not always hold the employers responsible for this. The fact is that our existing PRH and CSSA systems do not encourage the unemployed to seek employment.
President, I understand that the number of inbound visitors has surged to the extent that they have caused a lot more troubles to Hong Kong people in their daily living. But I wish to point out that the tourism industry, especially the LEGISLATIVE COUNCIL ─ 9 April 2014 9785
Individual Visit Scheme (IVS), has brought timely relief to the catering and retail sectors particularly as it has spared Hong Kong the woes of the economic depression brought by the financial tsunami that swept across the world since 2003.
According to the statistics of the authorities, the number of employees in tourism-related industries increased by nearly 59 000 in the period between 2009 and 2012, representing an increase of over 30%. The number of catering employees in tourism-related jobs also increased by 18 000, showing a 64% increase, and many of them are low-skilled workers with a low educational attainment. The overall unemployment rate in Hong Kong during the corresponding period dropped from 5.4% to 3.3% and is further down to 3.1% recently. That the unemployment rate of Hong Kong can be persistently maintained at a low level is to a certain extent attributed to the IVS.
Moreover, in 2012, the IVS generated a business turnover of some $7.6 billion for the catering sector, accounting for 10% of the annual total business turnover of the catering sector. Overall speaking, in 2013, overnight and same-day visitors under the IVS brought a total spending of as much as over $130 billion. In view of this, while we complain about the inconvenience caused by the IVS to Hong Kong people, let us not forget that the IVS has brought quite a lot of economic benefits and job opportunities for Hong Kong people.
In fact, with regard to Secretary Gregory SO's projection of the growth in the number of visitors under the IVS, I have great reservations about it. Front-line members of the industries have told me that the number of visitors under the IVS and their spending power are actually declining. In this connection, I advise the authorities to look into the statistics clearly and be mindful of the pendulum effect in order not to go from one extreme to the other. Tightening the scheme excessively may take toll on the living and investment plan of many people.
Therefore, I do not agree to the abolition of the multiple-entry permit scheme but I support that cases of "same-day multiple entry" be reduced. Besides, the authorities should introduce business visas and general visitors should be granted only a permit for one entry a day in order to stop parallel traders from coming to Hong Kong through the arrangement for "same-day multiple entry". Meanwhile, the authorities should provide additional resources 9786 LEGISLATIVE COUNCIL ─ 9 April 2014 for improving tourism facilities and particularly, the development of a boundary shopping mall should be expedited, in order that tourists can be diverted from the urban areas, thereby mitigating the impact on the public.
Some time ago, we Members from several industries, including the tourism and retail industries, met with the Chief Secretary for Administration who responded positively and said that she would rally support from several departments in the hope that our tourism facilities will be improved effectively.
President, I am also very concerned about the review of government fees and charges mentioned in the Budget. We must bear in mind that ― fortunately Secretary Dr KO Wing-man is in the Chamber ― most of the fees and charges for environmental and hygiene services are related to local community economic activities involving catering establishments and vendors. But apart from the fees and charges for services relating to food safety which are close to the cost recovery levels, the overall cost recovery rate of other fees and charges is about 47%. To achieve cost recovery, the fees and charges will certainly have to be increased substantially.
I wish to remind the authorities that they should have regard to the fact that the operating environment of SMEs and micro enterprises is already very difficult. Any adjustment to the fees and charges should not go beyond their affordability.
With regard to the authorities conducting consultations on various environmental levy schemes one after another, I must take the trouble to say once again that it is not the case that the catering sector does not support environmental protection, but we do not support the Government fleecing the industry on the pretext of "polluter pays". If the authorities will increase the fees for waste disposal, it must first reduce the rates because waste disposal fees are included as part of the rates.
Frankly speaking, the public have a lot of misgivings about the environmental levy schemes promoted by the authorities. Take food waste as an example. The two food waste treatment plants to be developed under the plan of the authorities are intended to treat food waste from industrial and commercial sources but in fact, domestic food waste is over two times more than that from industrial and commercial operations. Without adequate facilities for treating domestic food waste, how can we promote the recycling of food waste on a territory-wide basis? What sales outlets are there to absorb a large amount of LEGISLATIVE COUNCIL ─ 9 April 2014 9787 recycled food waste to ensure the effectiveness of recycling? The devil is in the details. If the authorities cannot explain this clearly, it would be difficult for the public to be convinced that the waste levy would not be a bottomless abyss.
Overall speaking, I do not think highly of this Budget, especially because the support for SMEs is lacking. However, we do not want to be further disappointed and so, we must once again urge the authorities not to abolish the mechanism for offsetting the severance payment with MPF contributions, for this would further add to the burden on employers. If the authorities further make concession for populism, it would only scare investors away and lead to serious consequences.
President, as the chickens imported from the Mainland were tested positive for H7N9 on the eve of the Chinese New Year, the Cheung Sha Wan Poultry Wholesale Market implemented a chicken cull and was closed for 21 days. I regret that the authorities had taken the opportunity to state openly that the public would have to consider the need to maintain the live chicken market in the long term.
Hong Kong people always have high standards for fresh food ingredients. While the agricultural and livestock industries have continued to shrink, Hong Kong people have not given up on fresh food but on the contrary, they have cherished fresh ingredients even more as their availability is ever decreasing. They do not wish to see another traditional industry vanish in Hong Kong, fearing that Hong Kong will become more and more monotonous. So, do not belittle our determination, Secretary Dr KO. This can be clearly shown by the efforts made over the years by the local live poultry trade to enhance measures for preventing avian flu and their effectiveness.
Let me also remind Secretary Dr KO not to inherit the narrow mindset of his predecessor, Dr York CHOW, intending to work wholeheartedly to sap the live poultry industry. Rather, he should actively conduct studies and provide resources to ensure that the live poultry trade and even other sectors of the agricultural and fisheries industries will continue to develop healthily.
As regards education, I urge the authorities to expeditiously enhance the Pre-primary Education Voucher Scheme (PEVS) by abolishing the cap on school fees and incorporating private independent kindergartens into the scope of the PEVS to benefit all parents, including parents in the middle class.
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As shown by the statistics of the authorities, more and more non-profit-making kindergartens have withdrawn from the PEVS in recent years. The number of students taking part in the PEVS has been dropping year after year while the number of students studying in private independent kindergartens has kept on increasing. This shows that the parents have used their feet to tell the authorities that they prefer to pay a bit more in schools fees in order for their children to study in quality private independent schools.
In fact, the requirement that schools participating in the PEVS should have their school fees capped will only make the operation of the participating schools more difficult and this will, in turn, impede their healthy development. During the past few years, there have been cases in which kindergarten teachers of the participating schools faced pressure over their quest for a pay rise.
In any case, the PEVS should cover quality schools, so that students and parents with education vouchers can have more and better choices, and only in this way can the effect of healthy competition be brought into play. Therefore, in order to achieve diversified and quality development of pre-primary education, the authorities should expeditiously set things right by opening up the PEVS for all local kindergartens to truly achieve the objective of "money follows parents".
On the question of the rental of kindergartens which has aroused concern over the past couple of days, I will not comment on individual cases but I am certain that in order to implement 15-year free education, the authorities must address the complicated issue of rent subsidy for kindergartens. I also advise the authorities to start planning early and also consider planning for more kindergarten sites in land development.
Lastly, I regret that the authorities will again increase the tobacco duty. Secretary Dr KO, the percentage of smokers in Hong Kong is already very low, and I think apart from Bhutan, the only country in the world where smoking is banned, it is difficult to find another place where the percentage of smokers is lower than ours in Hong Kong.
After the tobacco duty was last increased substantially by 41.5% in 2011, the percentage of smokers only dropped slightly by 0.4% from 11.1% to 10.7% between 2010 and 2012. Among these less than 11% smokers, I think most of them are long-term smokers who know clearly the hazards of smoking. Like me, they would have quit a long time ago had they wished to do so and in fact, it LEGISLATIVE COUNCIL ─ 9 April 2014 9789 is not difficult to quit smoking. So it is basically unnecessary for the authorities to carry coal to Newcastle by increasing the tobacco duty to help me quit smoking. Indeed, I do not see by how many smokers the smoking population can be reduced with this further increase of 11.7% in the tobacco duty. However, I am sure that the business of newspaper hawkers will definitely dwindle because more smokers will turn to buy illicit cigarettes. Smugglers of illicit cigarettes will have to thank the Secretary for they are set to have more business and the gross profit will certainly be greater.
According to the figures on illicit cigarettes seized by the Customs and Excise Department (C&ED), the number increased from 6.7 million sticks in 2012 to 7.9 million sticks in 2013, showing an increase of 18%. Oxford Economics has published a report showing that in 2012, as many as 35.9% of the cigarettes consumed in Hong Kong were illicit cigarettes and the market share of illicit cigarettes in Hong Kong was the second highest in 11 Asian countries and regions. This shows that the activities of trafficking in illicit cigarettes in Hong Kong have become increasingly rampant.
An increase in tobacco duty actually does not greatly affect smokers like me who have the means. But the several hundreds of thousand smokers among the grassroots, the 400-odd newspaper stalls and 5 000 cigarette retailers will be hit the hardest.
I am all the more worried that this will encourage more people to engage in the trafficking in illicit cigarettes which very much counts on the human wave tactics and worse still, this will induce many young people to take part in such criminal activities. Relying on one single team of C&ED officers to combat illicit cigarettes is like fighting a hopeless battle, and I would suggest increasing the reward for informers by 10 times, which would produce better results.
President, I shall stop here. I so submit.
DR KWOK KA-KI (in Cantonese): President, in the Aesop's Fables, there is a story about a miser. The story goes like this, "Once upon a time, there was a very rich miser who put his gold pieces into a tree hallow and each night, he would go and check it, until one day, his gold pieces were stolen by a thief and he had nothing left. While he was thumping his chest, stamping his feet and 9790 LEGISLATIVE COUNCIL ─ 9 April 2014 crying, a passer-by asked him what had happened, upon which he replied that the gold pieces that he had put in a tree hallow had disappeared. The passer-by asked him if he had ever used the gold pieces, to which he replied in the negative, saying that he would only come to look at them each day and after doing so, he would feel very happy.". If one does not use one's precious gold pieces, they would only be stolen.
I believe we all think that just like the Budgets of the Financial Secretary over the years, the Budget this year offers little to write home about. However, one major difference of the Budget this year is that he raised two points in his speech. They are mainly related to the Working Group on Long-term Fiscal Planning and the so-called "Future Fund" proposed by him. As far as we can see it, in the Budgets over the years, the one that looked more like the thing or gave us the impression of not being too bad was his first Budget in 2008-2009 because at that time, the difference upon final settlement was only $8.9 billion. However, from 2008 to now, the total amount miscalculated by him stands at $342.3 billion. This year, the deficit initially forecast by him was $4.9 billion but in the end, there turned out to be a surplus of $12 billion.
Nowadays, the funds dealt with or managed by the Hong Kong Monetary Authority (HKMA), including the Land Fund, the foreign exchange reserves of the HKMA and government reserves, amount to over $3,030 billion in total. Judging from these figures, it turns out that the miser mentioned in the Aesop's Fables can be found right before our eyes, and it is our Government. Why does the Government have to do so? How does this enable us to plan for the future? From the discrepancy of $342.3 billion in calculation to the Government's report on fiscal planning at present, many figures have aroused public concern but these figures, like those in the past seven years, may also be a far cry from the reality.
On 3 March, the Working Group set up by the Financial Secretary and chaired by the Permanent Secretary under him, Elizabeth TSE, published a new work report. According to estimation, it is likely that a structural deficit will occur in Hong Kong seven years later. This report recommends that in order to meet the needs in public finance in Hong Kong, it is necessary to formulate fiscal measures, including controlling expenditures, maintaining revenues, preparing for a rainy day, and so on. In sum, this amounts to freezing all funds that need to be used and refraining from spending. At the same time, the report also cites some alarming figures to lead the public into thinking that Hong Kong will experience serious problems. In fact, there is not any problem in carrying out this sort of LEGISLATIVE COUNCIL ─ 9 April 2014 9791 fiscal forecast or long-term fiscal planning, but what we find most unacceptable is that the great majority of the members in the Working Group are academics preferred by the Government and even the chairperson is a government official. In the future, if the Government really wants to produce an independent work report of a high standard, I advise it not to find someone of its own to do the work. If the Government has confidence in itself, it should find some truly independent economic experts to do the work. Anyway, I believe the Government has to state clearly if it will no longer provide sufficient or new sources of finance for various types of services that are now by no means adequate in Hong Kong and if it is likely that the Government will curtail services that are already insufficient and stretched to the limit, for example, healthcare and social welfare.
Originally, it is worthwhile to take time to consider this kind of planning for rainy days but some figures cited by the Government are very interesting, so let me cite them here. Some of them can be found in the detailed tables provided by the Government. The planning uses tables to illustrate several scenarios and one of them is that existing services have to be increased. We can see that by 2042, the relevant expenditures will reach $2,994 billion, an increase of 41.5% compared to those at present and more than 40% of the nominal GDP, that is, close to 42%. In fact, even if the Government is unwilling to spend any money, it does not have to rack its brain like that, nor does it have to cite these alarming figures because the Government has absolute and final control over this matter. Even if the Government is unwilling to spend any money, there is absolutely nothing that we can do about it. So far, there is not a single official who is willing to assume responsibility or face the public, so the Government does not have to worry. However, the greatest issue is whether or not the Government has any concept of fiscal management or the so-called fiscal management philosophy.
One of the recommendations made by the Government's Working Group is to set up a "Future Fund". Interestingly, this "Future Fund" is no novelty and in many places, including Japan and other European and American countries, such a concept called "Future Funds" can be found. Originally, we thought that such a "Future Fund" was designed to meet the future needs of the general public, including the problem of an ageing population or the social service needs arising from an ageing population. However, it turned out that this so-called "Future Fund" will serve two major purposes. First, in this Working Group, there is a member called Mrs Jennifer WONG, who said ― on that day, she may have 9792 LEGISLATIVE COUNCIL ─ 9 April 2014 eaten the "honesty bean-paste bun" ― that the "Future Fund" was all about passing money from the left pocket to the right and the only difference was that if the money is set aside, the public or the outside world would not hanker after this sum of money. In fact, this is ultimately the biggest purpose of the Government in setting up this fund. As regards the second point, which was expressed by Secretary Prof K C CHAN and aroused great outrage among the public, is that the "Future Fund" is mainly intended for infrastructure development.
President, this Government is really sick, so sick that no matter how badly the various needs of the public or the elderly have to be met, in the Government's mind, the single most important thing is infrastructure development. Can these infrastructure projects bring about development in Hong Kong in the future? Throughout the years, many infrastructure projects have been launched in Hong Kong but many of them are political in nature and they include the Express Rail Link, which is riddled with problems, the Hong Kong-Zhuhai-Macao Bridge following close on the heels of the Express Rail Link, and the Liantang Boundary Control Point, the cost of which has overrun by more than $6 billion. The genuine benefits that these so-called new infrastructure projects can bring to the public are limited. Of course, the people who stand to gain from them are contractors or builders. They can make profits amounting to billions of dollars from these projects costing hundreds and billions of dollars. However, to many members of the grassroots who have to grovel and struggle every day, these infrastructure projects bears no relevance to them. However, the money surely has to be spent because be it the Hong Kong-Zhuhai-Macao Bridge or the Express Rail Link, in view of the need to promote political integration between China and Hong Kong and the goal of aligning with politics in China, not to mention hundred billion dollars, even if an amount double the present sum were needed, it still would have to be spent.
It turns out that the so-called "Future Fund" is not intended for solving the problems facing us in the future but to serve as a reserve for massive infrastructure development projects, no matter if they are useful or not. This is precisely what makes the public irate because not only has the Government ignored the inadequacies in such areas as healthcare, housing or community facilities, it is even going to take away some of the original estimates, which may be credited to the Land Fund already with more than $200 billion in it. Then, the Government will put even more surplus into it.
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If we take a look at the Government's expenditures this year, a major impression that I got is that the Government does not care much about some of the services most urgently needed by the public. Let me cite an example that all can see: The Budget this year talks about allocating an additional $170 million to the provision of 1 500 additional places for the Enhanced Home and Community Care Services, some $160 million for upgrading 51 social centres for the elderly to neighbourhood elderly centres and some $200 million for raising the subsidies for places under the Enhanced Bought Place Scheme and the Nursing Home Place Purchase Scheme, and so on. On the surface, all of these sound very nice but from 2013 to the present, there are 29 659 elderly people on the integrated waiting list for residential care services for the elderly but according to the statistics on 31 August 2013, the average waiting time for subsidized residential care homes is on average 34 months, whereas the waiting time for residential care homes under the Bought Place Scheme is nine months ― and 21 months if the two are combined ― whereas the waiting time for nursing homes is as long as 36 months. We can see that not only are many types of services inadequate, they also give members of the public waiting in line quite a big headache.
As regards the healthcare expenditure for the elderly, I can provide some figures to Members for their reference. Since the elderly population in Hong Kong is rising continually, it is estimated that people aged 65 years or more will increase from 13% in 2012 to 30% in 2041. According to our calculation, since the number of beds (in particular, accident and emergency beds) needed by people aged 65 years or more is almost eight times that needed by people aged below 65 years, even on the basis of the present level, it is estimated that the number of beds required will also experience a shortfall of 4 000 and by 2041, as mentioned in the Government's long-term fiscal planning, on the basis of eight times for elderly people, the shortfall will be a total of 22 978 beds. In other words, if the Government still adopts such an approach in its projection, from now to 2041, there will be a shortfall of thousands of beds.
The second point that I wish to talk about is public expenditure on healthcare. After the reunification, apart from the peak in 2003-2004, when expenditure on public healthcare accounted for 3.2% of the GDP, the healthcare expenditure has been declining steadily and recently eversince, and it is even hovering between 2.5% and 2.6 %, so this is a kind of retrogression. In fact, the Administration only talks about the amount of additional funds needed but not the actual demand, so it is not showing us the whole picture. As we all know, when the population ages continually, the requirements and needs for various 9794 LEGISLATIVE COUNCIL ─ 9 April 2014 services ― be it infirmary care, healthcare services or even out-patient services ― are totally different from the needs under the existing demography. We can see that if the Government neither shows any commitment nor makes any undertaking, various services, in particular, healthcare services, will become absolutely insufficient in the future.
Recently, the Government talked about how this sum of $50 billion would be allocated and one point therein that we find rather shocking is that some $40 billion will be allocated to subsidizing or building more private hospitals. I think this is very problematic. Because if we can allocate some $40 billion to building private hospitals but at the same time, there is a number of district hospitals waiting for redevelopment, for example, the United Christian Hospital, Kwong Wah Hospital and Queen Mary Hospital and many districts, for example, Tin Shui Wai, are waiting for the construction of new hospitals, and if the Government does not speed up addressing these great shortfalls in services but even uses the hard-to-find and last remaining resources to subsidize private hospitals in increasing their number of beds, I think this is putting the cart before the horse, which is absolutely unacceptable. The Government should not stretch some hard-to-find and already inadequate resources even thinner and allow insurance companies and private hospitals to reap even greater profits. It is necessary for the Government to reformulate a long-term healthcare service programme ― I mean public healthcare services ― in the next couple of years, and Hong Kong absolutely needs a long-term healthcare service programme, so that in the future, we will find that the Government has made greater preparations for elderly people who will account for 30% of the population in 2041.
I agree that be it resources, manpower, beds or drugs, they are all inadequate but not only has the Government not addressed these shortages, it even rashly cited such seemingly nice-sounding arrangements like the Working Group or the "Future Fund" as the excuse to shirk its responsibilities. I find such an approach taken by the Government totally intolerable. What I hope the most is that in the coming year, the Government will turn the "Future Fund" into a fund truly designed to meet the needs of the elderly population, rather than a fund for future infrastructure projects.
I so submit. Thank you, President.
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MR GARY FAN (in Cantonese): The Budget this year is already the seventh Budget under the charge of Financial Secretary John TSANG, but over the last seven years, the Financial Secretary has miscalculated the fiscal surplus in each and every Budget. Moreover, not only did he make the miscalculation, he even underestimated the Government's revenue. Therefore, whether the Government should adopt the fiscal management policy of "keeping expenditure within the limits of revenues" or that of "committing resources as and when needed" is really a matter on which the public have divergent views. If we look at various expenditures in the Budget this year, there are many areas in which funds are actually not spent appropriately and in some areas, public funds are even wasted, so the principle of prudent fiscal management is not fulfilled.
For this reason, on behalf of the Neo Democrats, I have proposed 10 amendments to deduct the expenditure estimates of the Government in various policy areas in the next year. These 10 amendments include: Amendments numbers one to four, which deduct amounts equivalent to the expenditure for six months' emoluments for the Chief Executive, the Secretary for Development, the Secretary for Commerce and Economic Development and the Commissioner of Police; number 5, which deducts an amount equivalent to the annual expenditure estimate for the outside visits made by the Chief Executive; number 6, which deducts an amount equivalent to the annual expenditure estimate for the Hong Kong Tourism Board to carry out promotional activities on the Mainland; number 7, which deducts the annual estimated operating expenditure for the South East New Territories (SENT) Landfill; number 8, which deducts an amount equivalent to the annual expenditure estimate for the Constitutional and Mainland Affairs Bureau to carry out public consultations on the methods of returning the Chief Executive in 2017 and forming the Legislative Council in 2016; number 9, which deducts an amount equivalent to the first three months of the expenditure estimate in 2015 for the purchase of water by the Water Supplies Department and the last seeks to deduct an amount equivalent to the annual expenditure estimate for the Central Policy Unit to conduct studies on the public affair commentaries in the mass media.
Next, I will explain in detail the grounds for various amendments on behalf of the Neo Democrats. Obviously, the first two amendments are targeted at LEUNG Chun-ying by deducting six months of the emoluments for the Chief Executive and the annual expenditure estimate for his visits. President, earlier on, the Chief Executive said complacently on the second anniversary of his election that the progress in his administration had been satisfactory. However, 9796 LEGISLATIVE COUNCIL ─ 9 April 2014 it is only necessary to make comparisons with the Manifesto drafted some two years ago to find that there are many instances of him shirking his responsibilities and failing to honour his pledges. While running in the election, LEUNG Chun-ying vowed in all sincerity that Hong Kong did not need any incinerator, thus indirectly making the previous Government shelve the incinerator programme. However, this year, he went back on his own words and overturned his election pledge by introducing into the Legislative Council the proposal on the construction of an incinerator on Shek Kwu Chau. Moreover, the construction cost has even risen by $3.2 billion. Not only should the Chief Executive tender his apology publicly, but he has to bear an unshirkable political responsibility.
The Manifesto of the Chief Executive also says that the conservation and development of country parks will be enhanced. However, what has he done to achieve this end? It is to overturn the pledge in his election Manifesto this year by repeatedly testing the water for the development of country parks and in the policy address, it is even proposed that green belts protecting the ecology of country parks be converted to residential use, so doing is doubtless self-contradictory. The issue of children born of parents who are non-permanent Hong Kong residents, which the Chief Executive promised to deal with, has not been satisfactorily resolved either. According to the information of the Hospital Authority, at present, one baby whose parents are non-permanent Hong Kong residents is born in a public hospital in Hong Kong every one and a half days. Neither has the Government's population policy fully assessed the long-term burden and pressure on education, healthcare, welfare, and so on, arising from babies born in Hong Kong of parents who are non-permanent Hong Kong residents, so the problem of children born of non-permanent Hong Kong residents may beset Hong Kong in the coming decades and affect the growth of an entire generation of people.
Other instances of failing to honour the pledges in his Manifesto include those in relation to 15-year free education, "Hong Kong Property for Hong Kong People", standard working hours, and so on, and it can be said that they are too numerous to be cited, so I will give a more detailed explanation later at the Committee stage.
President, the Chief Executive, LEUNG Chun-ying, has made 21 visits outside Hong Kong during the 20 months since his assumption of office, but it turned out that 19 of them only involved visiting the Mainland to foster his so-called "homeland relationship", so the frequency is far higher than those of his LEGISLATIVE COUNCIL ─ 9 April 2014 9797 two predecessors, TUNG Chee-hwa and Donald TSANG. Often, he went to various provinces and cities on the Mainland to meet the secretaries of municipal party committees and party chiefs, and some commentators well-versed in Mainland politics even pointed out that among the officials who the Chief Executive met, quite a number of them are rising stars in the Communist Party of China, so the Chief Executive was actually using public funds to make political investments for himself on the pretext of "homeland relationship". It is not apparent that this kind of "homeland relationship" can bring any improvement to public living in Hong Kong, for example, to such issues as regaining the power of vetting and approving applications for One-way Exit Permit, barring pregnant Mainland women whose spouse is not a Hong Kong permanent resident from giving birth to their babies in Hong Kong, dealing with the problem of an excessive number of inbound visitors under the Individual Visit Scheme and even smuggling by parallel goods traders. In view of this, we believe that the "homeland relationship" fostered by the Chief Executive only represents a waste of public funds and the funding for it should be deducted.
President, my third amendment seeks to deduct six months' emoluments for the Secretary for Development. I moved the same amendment in relation to the Budget last year but unfortunately, the performance of the Secretary for Development this year has not shown any improvement. This year, the Development Bureau continues to disregard the objection to land resumption and clearance by the residents concerned and insists on forcibly developing North East New Territories. Moreover, in order to evade resistance, it skirted the normal procedure by taking stealthy steps to conduct freezing surveys in the Fanling North and Kwu Tung North New Development Areas even before the Town Planning Board had completed its review, thus virtually forcing residents to agree to moving out in advance and making a villager in Kwu Tung North suspected of succumbing to the pressure of forced relocation commit suicide. Secretary for Development Paul CHAN has acted in defiance of public opinions by refusing to withdraw the North East New Territories New Development Areas project, in which he is suspected of a conflict of interests in land hoarded by him, so he should have stepped down long ago for true accountability. However, he is still receiving emoluments amounting to more than $1 million and this is far too unreasonable, so this is unacceptable to Hong Kong people.
Apart from Paul CHAN, I have also proposed deducting six months' emoluments for Secretary for Commerce and Economic Development Gregory SO, as well as deducting the annual expenditure estimate for the Hong Kong 9798 LEGISLATIVE COUNCIL ─ 9 April 2014
Tourism Board (HKTB) under his Policy Bureau. The Assessment Report on Hong Kong's Capacity to Receive Tourists published by Gregory SO this year cannot pass muster at all. Not only did he refuse to assess the impact of parallel goods traders on Hong Kong residents, he even adopted an outdated method to calculate the load factor of railways, thus overlooking the fact that the capacity of a number of lines of the MTRCL have reached capacity and that the trains are already jam-packed with passengers. As a result, just two months after the release of this report, which is subjected to a great deal of queries, the Central Government crossed the line by suggesting that Hong Kong's capacity to receive inbound visitors under the Individual Visit Scheme (IVS) had to be reassessed, so objectively speaking, this is a declaration on the study report prepared under the direction of Gregory SO being invalid.
Even the Central Authorities acknowledged that the IVS is a burden for Hong Kong but the annual expenditure estimate earmarked by the HKTB for promotional activities on the Mainland is still as high as $418 billion, so Hong Kong has to continue to put up with the unlimited growth in the number of Mainland visitors, which is beyond its capacity. The Neo Democrats believe that at present, there are already far too many inbound Mainland visitors, so the HKTB should no longer commit resources to carrying out promotional activities on the Mainland, so as to reduce the proportion of Mainland visitors among inbound visitors and pre-empt the unhealthy situation of the tourism industry in Hong Kong being over-reliant on a single source of visitors.
The Commerce and Economic Development Bureau was also negligent in its duties in dealing with the furore over the grant of free-to-air television licences, so the shirking of responsibilities by Gregory SO is definitely incompatible with the high pay received by him. He has all along refused to explain the grounds for changing the policy from granting an unlimited number of free-to-air television licences to cherry-picking two out of three applicants. In fact, he was intent on kicking the Hong Kong Television Network Limited set up by Ricky WONG out of the race, thus seriously impacting on the reputation of the SAR Government and the business environment in Hong Kong. As an accountability official, Gregory SO subsequently refused to give appropriate explanations and conduct a review on the conflicts between the Telecommunications Ordinance and Broadcasting Ordinance that have arisen because of their outdated nature. In the case of Gregory SO, it is obvious that this is not a case of "high pay to discourage corruption" but that of "high pay to keep mediocre officials".
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President, another of my amendments seeks to reduce six months' emolument for Commissioner of Police Andy TSANG. Eversince Andy TSANG took over as the Commissioner of Police, the tactics of the police in dealing with rallies and protests have been ever-changing and they are increasingly political in nature. When handling the case of the assault on the former chief editor of Ming Pao Daily News, Kevin LAU, Andy TSANG even went against the established investigation procedure by hastily determining the nature of the case before a thorough interrogation of the assailants had been carried out and made the high-profile announcement that there was no evidence indicating that the case was related to press freedom, thus passing judgment before trial. What was the outcome? The outcome was that the Secretary for Security had to come out to deal with the shambles by undertaking to pursue the investigation in various directions, but he still refused to set a deadline for detecting the case or submit an investigation report to the Legislative Council, so the mastermind behind the case remains at large.
In addition, I have also proposed to deduct the annual estimated operating expenditure for the SENT Landfill and this is also an amendment proposed by me last year. The SENT Landfill has been operating for more than a quarter of a century, so it should have accomplished its historical mission. Moreover, among the three landfills still in operation, the SENT Landfill is the closest to residential areas. Not only is it an environmental protection problem, it is also an example of a blunder in urban planning. Coupled with the fact that the LOHAS Park nearby will be developed in the future into a large-scale community that is equal to two Tai Koo Shings in size, the Government should not continue to require Tseung Kwan O residents to bear the responsibility of end-of-pipe treatment. In addition, the Government should implement a quantity-based waste charging scheme as soon as possible, so that more resources can be devoted to recycling and waste reduction and after the SENT Landfill has reached capacity, it should be closed rather than being expanded indefinitely in violation of the Government's promise.
President, I have also proposed deducting the expenditure estimate of the first three months in 2015 for the Water Supplies Department to purchase potable water. Why do I have to do so? Because the agreement reached with the Mainland on the purchase of Dongjiang water will expire at the end of this year, so the Government should take the opportunity of renewing the agreement to change the present "buffet-style" charging approach in relation to Dongjiang water, so that the Government can have greater autonomy over the volume of 9800 LEGISLATIVE COUNCIL ─ 9 April 2014 water to be purchased and the price of water, so as to prevent the recurrence of the instance of wasting over 40 million cu m of potable water because of overflowing1 reservoirs that occurred this year. This measure is intended to avoid pouring money into the sea.
The last two amendments include reducing the annual estimate amounting to as much as $12 million for the Constitutional and Mainland Affairs Bureau to carry out public consultation on the method of returning the Chief Executive in 2017 and forming the Legislative Council in 2016. The reason is that in the consultation on constitutional reform this time around, the SAR Government has imposed restrictions at every turn and distorted the Basic Law a number of times by distorting "may take reference to" to the four sectors in the Election Committee in forming the Nomination Committee for the 2017 Chief Executive Election, as found in Annex I, into "must take reference to", then declared on a number of occasions that civil nomination is not in line with the Basic Law. The authorities also invited Legislative Council Members to visit Shanghai at a time when the consultations have not been completed and obviously, the aim is to make Members of the pan-democratic camp go there to receive the imperial decree and meet the emperor. Therefore, when the tune of the so-called consultation on constitutional reform has practically, as Carrie LAM said, been set by a single party, when the discussion initiated by the Government now does not represent an effort to achieve genuine universal suffrage and when "let's talk" is only a lie and a bogus consultation carried out by the Government in an attempt to create a facade of harmony, the continued expenditure on carrying out a consultation is only a waste of public funds.
President, the last amendment seeks to deduct the annual expenditure of the Central Policy Unit in commissioning the One Country Two Systems Research Institute to conduct studies on commentaries on public affairs in the mass media. Ever since the Chief Executive took office, the so-called "LEUNG's team" continually advocated the need to guide public opinion actively. However, the half-baked knowledge of CHEUNG Chi-kong in public opinion surveys, or some of his approaches, which were derided by economists as those of a "newbie in public opinion survey", are all far from satisfactory. Therefore, I believe the expenditure in this regard should be deducted.
1 Mr Gary FAN pronounced "溢(overflow)" (jat6) as "益"(jik1). LEGISLATIVE COUNCIL ─ 9 April 2014 9801
President, whether the Budget should "keep expenditure within the limits of revenues" or "commit resources as and when needed" still needs to be discussed. For many years, the Government has remained unwilling to establish a seed fund for universal retirement protection and make plans for the future, so some Members have no choice but to filibuster time and again. As a Legislative Council Member, I respect the right of other Members to comment on public affairs and will continue to act pragmatically by proposing amendments to the Budget. Therefore, with these remarks, on behalf of the Neo Democrats, I voice its opposition to the Budget this year.
PRESIDENT (in Cantonese): Mr FAN, " 溢 (overflow)" (jat6) should be pronounced as "日(the sun)" (jat6).
MR GARY FAN (in Cantonese): Thank you, President.
MR DENNIS KWOK: President, the rule of law is a valuable asset ― arguably the most valuable one Hong Kong has. It is a valuable asset not because it brings in investment. It may well do but that is not the point. It is valuable in that it is the best safeguard for our way of life, the best safeguard against the abuse of power by the Government. To maintain the rule of law is also a costly premise, requiring both vigilance as well as actual resources in support. This speech, given in response to the Budget, is primarily concerned with the latter, namely the actual resources that should be put in to preserve the rule of law in Hong Kong ― resources which are well worth spending and investing, but much of which have unfortunately been neglected from this year's Budget.
Among the most important areas of the Budget, there is no mention of extra resources that are required for the Judiciary. During last year's Budget deliberation, I spoke about how our legal system requires resources in order to function and operate efficiently, how justice delayed is justice denied, how for far too long, all levels of the Judiciary, from the Magistrates' Courts to the Court of Final Appeal (CFA), have been starved of resources they need, staff support and 21st-century court facilities necessary to deal with the increasingly long and complex cases efficiently and on a timely basis.
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The Chief Justice, in his speech marking the opening of the legal year a few months ago, also reminded us of the importance of this aspect, saying that the executive authorities ought to render all necessary support to promote the effective, efficient and fair administration of justice in Hong Kong.
Yet, neither this year's Policy Address nor the Budget gave one word on how the executive branch of the Government intends to work with the Judiciary in the furtherance of its plans for expansion and to cope with the ever-increasing workload and demands. In the meantime, the problems of long waiting time in our courts plaguing almost all levels of courts have not only been left untouched, but have also worsened over the past 12 months. The average waiting time for a civil case in the Court of Appeal is now 138 days, 48 days in excess of the target set by the Judiciary. Substantial judicial resources at the Court of First Instance had to be deployed to assist the Court of Appeal by appointing Court of First Instance Judges to sit as additional Judges to hear cases of the Court of Appeal, and this is when the Court of First Instance was already well sort of resources and manpower in the first place, with cases on the civil list having to wait an average of a total of 261 days, a good 81 days in excess of the target. The situation is most alarming and disappointing, especially so considering the repeated calls by the Chief Justice and myself. Swift action and additional resources for the Judiciary are urgently needed.
(THE PRESIDENT'S DEPUTY, MR ANDREW LEUNG, took the Chair)
Turning to legal aid, of course, justice cannot be upheld if citizens do not have access to it. That is why Article 35 of the Basic Law specifically guarantees Hong Kong residents the right to legal advice and access to the Courts. That is also why free and equal access to a lawyer has always been a key element of the rule of law. Despite the importance of legal aid in ensuring access to legal services by those citizens who cannot afford it, the current provision of legal aid services is greatly inadequate in several regards.
First, a comprehensive review of the Financial Eligibility Limits (FEL) and the scope of the Ordinary Legal Aid Scheme (OLAS) and Supplementary Legal Aid Scheme (SLAS) as a whole has been long overdue. Last year, the Legislative Council resolved to adjust the Limits upward by 3.7%, but this was only to match inflation. What is needed rather, as the Bar Association has LEGISLATIVE COUNCIL ─ 9 April 2014 9803 emphasized over the years, is a wholesale reform of the legal aid system. This includes measures such as increasing the FEL for the OLAS from the current $270,000 to $350,000, and the FEL for the SLAS from the current $1.3 million to $3 million, as well as the expansion of the scope of the Schemes to cover more types of cases, including claims against incorporated owners of buildings, claims against property developers in compulsory sales and specific class action cases.
Second, last year's adjustment to the legal aid fees was also inadequate in that it only alleviates the impact of inflation but has not reformed the payment structure of the criminal legal aid fees system as a whole so as to catch up with the market rate. With the fees payable to lawyers for undertaking criminal legal aid work amounting only to a fraction of the fees they would charge for a normal case, it is difficult to expect lawyers or lawyers of quality to undertake legal aid work, especially criminal legal aid work for such pay. This would only serve to exacerbate the problem, whether perceived or real, of litigation being a rich man's game.
With as many as 60% of all criminal appeal cases involving unrepresented litigants, there are still many other reform measures that require the Administration's urgent attention: establishing an independent legal aid authority, ensuring the correct application of the relevant merits test, just to name a few. Unfortunately, none of these were taken up in the Budget this year.
On the question of arbitration and the promotion of legal and arbitration services abroad, I reiterated to the Government time and again that more resources need to be put into the promotion of arbitration services in the international arena. The plan to transform the current CFA building into an international legal hub designed to attract international legal organizations to come set up branches or sub-branches in Hong Kong is to be welcomed. At the beginning of this year, the Chief Executive announced in his Policy Address that the establishment of a committee dedicated to supporting the development of arbitration and mediation services will be set up, but this is not enough. Again, actual resources for the promotion of legal and arbitration services are needed, not more committees.
Winning the right to host the International Council for Commercial Arbitration (ICCA) in Hong Kong in 2018, will no doubt put our jurisdiction firmly on the international arbitration map and will seal Hong Kong's reputation as an international dispute resolution center. I urge the Department of Justice 9804 LEGISLATIVE COUNCIL ─ 9 April 2014 and the rest of the Administration to put in every effort possible to win the right to host the 2018 ICCA conference in Hong Kong and to continue to work with institutions like the Hong Kong International Arbitration Centre to further promote our arbitration services both here and abroad.
Of course, a system can only be as good as its people, and the same goes for the legal system in Hong Kong. However strong our legal institutions, we need good lawyers, a strong and independent legal profession to ensure that the quality of legal services provided in Hong Kong will remain one of the best in the world. To that end, we should not only count on attracting top lawyers to come to work in Hong Kong. Attracting foreign talents is important, but that alone is not enough. We should also put in more resources into the education of young lawyers, to ensure that there will a succession of quality young law graduates coming out of our universities, coming out of universities with the right kind of training, the right kind of mindset and the right kind of experience that would propel them into successful careered lawyers, whether in the legal field or otherwise.
Last but not least, Deputy President, I would like to mention the case of XU Zhiyong (許志永) again, which I have done so several times in this Chamber. The arrest and sham conviction of Mainland lawyer XU Zhiyong once again reminds us of the backwardness of the legal system on the Mainland, and the preciousness of our very own in Hong Kong. As a member of the legal profession, our hearts go out to Mr XU and his family.
More importantly, the case of XU Zhiyong also reminds us of the importance of our present cause to protect and treasure the rule of law in Hong Kong. We must uphold the rule of law in Hong Kong, so that when the moment of change arrives, what we have in Hong Kong shall shine in the rest of our nation, but that moment is far and long away. Looking at the present state of affairs in the rest of the country, we do not hope and cannot hope that the civic progress of the nation would advance very much, very far soon.
Deputy President, this is the very task set upon us, and yet, it is this task that the Budget this year has failed to fulfil. Many measures that are required to be mentioned in the Budget have gone missing: measures required to promote and protect our rule of law, to support our Judiciary, to ensure access to justice through the reform of the legal aid system, to support the legal profession, to promote the legal services and arbitration services abroad. All these should be LEGISLATIVE COUNCIL ─ 9 April 2014 9805 given much prominent space and mention in the Budget this year, but sadly, they are all missing.
Thank you, Deputy President.
MR VINCENT FANG (in Cantonese): Deputy President, my views on the financial and taxation issues in Hong Kong have never accorded with those of the incumbent Financial Secretary so closely before. Having said that, which aspect am I talking about? I am talking about the views expressed by the Financial Secretary earlier on on broadening the tax base. He pointed out that the introduction of new taxes is always unwelcome, as was the case of the goods and services tax proposed by us a few years ago, which was shelved because of strong opposition. Given the current political environment, the introduction of new types of taxes is not easy and we have to be mindful of bringing about a decrease because of an increase.
I am a representative of the wholesale and retail sector. If a goods and services tax is introduced, of course, this will have a direct impact on our sector. In fact, one point mentioned by the Financial Secretary that I agree with the most is that the introduction of new types of taxes may lead to decreases and a recent case in point is the additional stamp duties called the "double curbs" measures imposed on property transactions. Although the Government has its grounds in introducing the "double curbs" measures, transactions in the property market, in particular, in the second-hand property market, have ground to a virtual standstill, thus making people who aspire to improving their living environment by trading up in properties feel utterly hopeless. Furthermore, thousands of property agents have been rendered unemployed. The revenues from stamp duty and direct taxes also decreased, so is this not a good example of increases leading to decreases?
However, since Hong Kong possesses such huge reserves, even though less revenue from stamp duty or direct taxes on property transactions are received, I believe Hong Kong can still cope. But it is hard to say whether or not it can cope for as long as seven years because after the Financial Secretary had presented the Budget, he said frequently that Hong Kong would experience a structural deficit as early as seven years later, so inevitablly we have been given the impression that these two matters are related.
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According to the Financial Secretary's assertion, he agrees that the abolition of taxes will bring benefits to Hong Kong. As he said, the abolition of estates duty and wine duty and the profits tax exemption for offshore funds can promote the development of the relevant sectors, so the relevant revenues for the Government will increase rather than decrease. This is an effect that we in the business sector often talk about. So long as a bigger economic pie can be created, Hong Kong as a whole, from the Government, through the business sector to wage earners, will stand to gain. This is a very simple economic management philosophy. In order to generate recurrent revenues continuouslly, a business has to be actively managed. When recurrent expenses increase all the time, a business has to be expanded. In this way, the so-called economies of scale can be created. In this process, new capital has to be invested continuouslly and appropriately and it has to be invested in businesses that can be developed in a sustained manner. When the size of the economy becomes increasingly large, in order to move the cogs, lubricant, that is, capital, has to be added continuouslly. Otherwise, when it is suddenly realized that it is necessary to move the cogs, it would be very hard to do so.
On the one hand, the Financial Secretary appears to understand the economies of scale created by the expansion of the size of the economy, and on the other, in the report of the Working Group on Long-term Fiscal Planning released after the publication of the Budget, he estimates that a structural deficit will occur in Hong Kong as early as seven years later and that the almost $1,000 billion in reserves will be used up 14 years later, thus making the general public believe that the Financial Secretary has to "keeping expenditure within the limits of revenues and prepare for a rainy day". In view of this, the Financial Secretary proposed that it was necessary to prepare for a rainy day, saying that of the $700 billion fiscal reserves of the Government, $220 billion was the balance in the Land Fund and at present, consideration is being given to the establishment of a "Future Fund" by using the Land Fund as the basis and adding a portion of the annual surplus to it. The Government may draw on this contingency fund in the event of sustained budget deficits to finance strategic infrastructure projects and continue to promote Hong Kong's economic development.
I believe that instead of calling this a "Future Fund", one may as well call it a "fill-the-pit" fund because the planning for future infrastructure projects requires making deployments and investments with foresight, but it seems the Financial Secretary cannot see a bright future. Instead, he thinks pessimistically that sustained budget deficits would occur in the future. However, how many LEGISLATIVE COUNCIL ─ 9 April 2014 9807 pits can $200 billion fill? Take the housing production plan mentioned in the Budget as an example, in the next decade, the Government plans to build about 280 000 public housing units. On the basis of an average construction cost of $700,000 to $1 million for a public housing unit, and even disregarding such factors as inflation and labour shortage, the expenditure will amount to almost $200 billion, but the present reserve of the Hong Kong Housing Authority (HA) amounts to only some $68 billion. Even if Home Ownership Scheme flats can be sold in the future, this shortfall amounting to as much as $200 billion still cannot be met.
Last week, the Secretary for Transport and Housing vowed with great sincerity that no more assets would be sold. This being case, naturally, the Government has to underwrite this sum of money, little wonder that the Financial Secretary said he has to reserve such a sum of money. When the HA owned all those shopping malls and car parks in public housing estates, the Government had to subsidize their management but after these properties had been diverted to The Link REIT, they became tools capable of making tens of billion dollars each year. The Link is widely viewed as being heartless and going after exorbitant profits but even if we give its profit level a discount, the profits are still enough to support the need of the HA in developing new housing estates each year. Moreover, it is estimated that 280 000 new public housing units can house 1 million people and the spending power thus generated is by no means small. Given the present severe shortage of retail space and the situation of small businesses falling prey to high rents, I have all along proposed that instead of being preoccupied with arguing over whether or not the shares of The Link REIT, the market value of which is getting ever higher, should be bought back, it is more preferable for us to put in place an appropriate amount of retail floor area in new housing estates having regard to the needs of the population, as well as making optimal use of the vacant car parks and ground levels of the properties in existing housing estates, so as to increase the retail space and enable small businesses or micro enterprises to operate. In this way, apart from serving the public and countering The Link, the public can also have more opportunities to start their own businesses and become upwardly mobile. Moreover, the recurrent revenue of the HA can also be increased, so this is to achieve several ends by a single means.
When it comes to retail space, it is inevitable that the recent "anti-locust campaign", which brought disgrace upon Hong Kong people, has to be mentioned. In fact, members of the public who took this kind of actions are also 9808 LEGISLATIVE COUNCIL ─ 9 April 2014 very much aggrieved. They do so because their living environment has been seriously affected by Mainland visitors. Although the SAR Government cannot shift the responsibility to other people, it has all along failed to make any assessment of the impact on Hong Kong arising from the Mainland's introduction of the Individual Visit Scheme (IVS) and formulate corresponding measures. The Legislative Council has also conducted debates on a number of occasions, pointing out that the SAR Government is only concerned with enjoying the economic benefits of the IVS to Hong Kong but it could not foresee the impact resulting from such problems as transport, accommodation, goods, the demand for retail space and the cultural differences between the two places. As a result, , officials in the Central Government can now see that Hong Kong does not have the capacity to receive visitors. In contrast, such a situation of being caught in a bind cannot be seen in Macao and Singapore, which are both smaller than Hong Kong.
As regards increasing commercial retail space, it is true that the Budget this year has touched on this area more than those in the past few years, and seven measures to increase land supply for commercial use and seven long-term large-scale development plans are mentioned therein. Here, I do not wish to throw a wet blanket on it, but I sincerely hope that these measures can be implemented as soon as possible, so as to achieve the effect of diverting visitors at an early date. For example, the relocation plan for the three government buildings at the Wan Chai waterfront has been discussed by two terms of government and the development study on an underground shopping arcade in Causeway Bay was also completed several years ago, so can we expedite their implementation? Otherwise, the business opportunities presented by the Mainland IVS will be absorbed by our neighbouring countries and cities.
The SAR Government wants to copy Singapore in many areas but today, Honourable colleagues also said that economic growth in Singapore has been faster than that in Hong Kong in recent years. The GDP of Hong Kong fell by 3.3% last year but in Singapore, it rose by 4.6%. What are the reasons for this? Because in recent years, Singapore has imported a large number of workers to solve the problem of labour shortage and lower costs. Coupled with the development of a large amount of land, impetus has been given to overall economic development and per capita income also increased. In contrast, in Hong Kong, our hands are tied on all matters. One can neither develop land nor import workers. If labour is needed, one has to compete for it by raising wages. Yesterday, at a meeting of the Public Works Subcommittee, Honourable colleagues of the FTU questioned why the retender price for the food waste LEGISLATIVE COUNCIL ─ 9 April 2014 9809 treatment centre had become so expensive. This is precisely the adverse effects of your successful campaigns for a minimum wage and paternal leave and the inability to import workers.
All along, I have held that the Budget should be linked to the policy address to support administration. The Policy Address this year is more focused on narrowing the wealth gap and enhancing support for the socially disadvantaged groups. The Liberal Party supports all these measures. However, if one wants to increase expenditures in society but is not allowed to increase taxes or introduce new tax types, it will be necessary to expand the economic modes, so that this chicken laying "golden eggs" called Hong Kong can continue to lay eggs by using resources taken from the public to build an even better city for the public.
However, Members need only make some preliminary comparisons of the figures and forecasts in the report of the Working Group on Long-term Fiscal Planning to find that the report is founded on the assumption that the scale of the Hong Kong economy will not see any further development or expansion. Elderly people do not have any financial ability, so all of them have to rely on the Government. In these circumstances, since the "economic pie" cannot be made bigger but many people are eating it, naturally, sitting idly and just eating will use up the whole fortune. To solve this problem, the solution is very simple, that is, to make the pie bigger.
If Hong Kong wants to grow and develop, it must enlarge its capacity to accommodate businessmen, investors and visitors from all parts of the world, rather than turning businesses and visitors away because we have no scope to carry out development and are unable to accommodate them.
I so submit. Thank you, Deputy President.
MR IP KIN-YUEN (in Cantonese): Deputy President, first of all, I wish to ask the Financial Secretary a few questions sincerely. Although the Financial Secretary is not in the Chamber now, I hope he can answer an important question seriously: Is education an investment or is it purely a kind of consumption? In the Government's mind, is it willing to make greater and longer-term commitments to education? The education sector often hears the claim that between the quality of education and making savings, when such an issue is 9810 LEGISLATIVE COUNCIL ─ 9 April 2014 presented before the Financial Secretary, he would often choose the latter. Even though some good plans are proposed, they may not be able to get pass the gate manned by the Financial Secretary. I hope that the Financial Secretary can state his case clearly in his reply later on. Is the Financial Secretary willing to provide support in terms of expenditure for the sake of actual development in education? If there are good plans requiring recurrent expenditures, will he be willing to adopt them?
Deputy President, the theme of the Budget this year is to enhance competitiveness. Originally, Hong Kong's competitiveness has all along been excellent. In the ranking in world competitiveness published by the International Institute for Management Development, Lausanne Switzerland, Hong Kong was the global frontrunner both in 2011 and 2012 and was rated the economy with the greatest global competitiveness, emerging victorious with a full score of 100. However, Hong Kong's ranking in competitiveness last year slipped to the third place and the ranking in various areas all fell. The China Urban Competitiveness Report published by the Chinese Academy of Social Sciences also points out that although Hong Kong remains the most competitive city in China, ranking the first in respect of many indicators, its lead over other cities is being continually narrowed and its leading position is being gradually weakened.
The rise and fall in competitiveness is always a matter of wax and wane in relation to one's competitors. To maintain superior competitiveness, we cannot take for granted that we will surely be number one. We cannot sit on our laurels but must make improvements continuouslly, seizing opportunities and enhancing our strengths. Of course, to enhance our competitiveness, we can adopt various approaches, and one of the very important points mentioned by many Members in the Chamber today is that we should make strategic investments and education is one of the very important aspects. To upgrade education in Hong Kong and increase the investments in education are a very important aspect. However, the Budget does not make the right financial commitments for the sake of carrying out long-term planning for education; quite the contrary, the expenditure on education has been shrinking in recent years and the measures proposed have got the priorities wrong. They have neither targeted the most pressing needs of the education sector nor do they show any vision in education. Although the Government claims that it attaches importance to education, be it in terms of policy initiatives or fund allocation, education has been continually sidelined in recent years.
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A month ago, the Financial Secretary, Mr John TSANG, used the analogy of a race between the hare and the tortoise to describe the situation of expenditure outrunning the increase in revenues in the future, saying that a structural deficit would ultimately occur. Deputy President, although this analogy is simple, if we apply it to the Government's investments in education, we can also gain some fairly good insights. The development of education in Hong Kong is actually quite desirable. However, if we are like the hare, which was originally running very fast in the race between the hare and the tortoise, and if the Government has the mentality of relying on old advantages and keeps slackening its pace, on the whole, we will be overtaken by our rivals. Even though some regions have started late, for example, education development in Mainland China was very slow in the past, in recent years, we can feel that they have been sprinting and catching up very fast.
This is not just an unfounded claim and I can cite several actual examples. In 2014, the total expenditure estimate for education in Hong Kong amounts only to $75.4 billion, $1.5 billion less than the revised estimate a year ago. Financial Secretary John TSANG has all along said that education accounts for the largest share of public recurrent expenditure and that recurrent expenditure on education stands at $67 billion, an increase of almost 80% compared to 1997, and cited this to show that the Government is committed to education. Apparently, an increase of 80% is surely a large figure, but 17 years have passed since 1997 and if we look at the actual increases in other public recurrent expenditures in the same period, they have all increased by as much as 95%. More importantly, if we compare the spending in education with some major areas of spending, we will find that the expenditure on social welfare has increased by as much as 1.8 times, the expenditure on health has also doubled but that for education is only 80%. Is this figure of 80% something we can boast about? In fact, education has been the slowest growing among the Government's three biggest policy area groups. In addition, after LEUNG Chun-ying had taken office, the recurrent expenditure on education as a proportion of recurrent public expenditure had decreased from 21.8% in 2012 to 21.1% in 2013 and this year, it fell further to 20.7%. In fact, this proportion is the lowest since 1997, a historical low.
The foregoing is an internal comparison but if Hong Kong is compared with the international community, as I have mentioned a number of times in this Chamber, we are at a very low position. No matter if we compare ourselves 9812 LEGISLATIVE COUNCIL ─ 9 April 2014 with the more advanced Organisation for Economic Co-operation and Development or compare ourselves with developing countries, our proportion is fairly low. At present, the recurrent expenditure on education only accounts for 3.03% of the GDP and if we use the total expenditure on education in the calculation, it cannot even reach 4%. Even compared to the average of 4.6%, which is the lower end for developing countries, we are no match. Recently, that for Mainland China has also exceeded 4%.
This development trend of ours is actually a grave cause for concern because we have to prop up a fairly large education system with this low input rate. In our education system, the student enrolment rates in various areas are actually quite high. However, only a small amount of resources is used to support the development. Moreover, in recent years, what we can find most commonly is the adoption of the approach of lump-sum grant or the establishment of various funds by the Government to provide financial support. This kind of short-term and unstable resources is at great odds with the nature of education as a long-term policy, so schools are compelled to adopt many short-term measures in response, but these short-term measures are gravely detrimental to the nature of education. This also reflects the Government's lack of long-term commitment to education. I hope the Financial Secretary can turn such a situation around.
All of these information and data indicate that no matter if we look at our investment in education or make a cross-comparison, signs of retrogression have appeared in Hong Kong, whereas other places are playing catch-up very fast. This is because all regions and countries consider the training of talents a major factor on which a whole region and even a whole country depends in enhancing competitiveness.
Therefore, if we look at all the countries around us, we will find that no country would accord low priority to education. If you look at the Presidents of the United States, from Clinton to the incumbent, what they talked about all the time, or the most important thing in government policy, is: First, education; second, education and third, it is still education. If we cannot do a good job in this regard, we owe all parents and students in Hong Kong a great deal indeed.
What we owe them is: First, we have still not come up with anything very concrete in terms of 15-year free education and it is still something very distant. LEGISLATIVE COUNCIL ─ 9 April 2014 9813
Moreover, we are still turning a blind eye to the operational difficulties faced by long whole-day kindergartens. We have only increased the value of the education vouchers somewhat, thinking that the present problems facing kindergartens can be solved in this way.
In fact, what we can see is that kindergartens, particularly long whole-day kindergartens, are complaining bitterly. What they are facing is the wastage of teachers, long working hours and the inability to give teachers reasonable pay. We can see that the appeal of working as kindergarten teachers has remained very low, so much so that last year, when we were discussing a fund for top-notch students and it was proposed that some top-notch students be sent overseas to study childhood education, we thought it was a joke. We must make fundamental policy changes in respect of 15-year free education and raise the value of education vouchers during the transitional period.
In respect of secondary schools, very serious problems can also be found. We can see that secondary schools have found themselves at a stage of instability. At present, there is continual disturbance and instability in the secondary school sector. The number of students admitted to secondary schools is in a period of decline and this trend will be reversed only in 2016. The drop in student number makes it impossible for schools to achieve stability. This is not the fault of schools. What matters most is whether or not the Government is good at planning and able to make use of the opportunities to resolve such unreasonable situations as too large a number of students in secondary school classes and excessively long working hours for teachers. What we demand is that secondary schools take strides towards small-class teaching with 25 students per class and we also hope that the whole situation in secondary schools can be made healthier within a short period of time, so that secondary schools can have stable development.
Another problem at present is related to primary schools in Hong Kong. We campaigned successfully for the policy of small-class teaching and this is an undertaking made by Donald TSANG in 2007. Next year, we will have completed the first cycle. Unfortunately, we are now facing some undercurrents, that is, with the number of primary school students now rising again, some officials have proposed that the number of primary students in each class be raised from 25 to 30, and this has been proposed in some districts.
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However, in this process, there is no sign that the Government is carrying out any proper planning. In these circumstances, we are worried that the Government will change the definition of small-class teaching and at the same time, revert from small-class teaching to large-class teaching surreptitiously. All Members here and all members of the public know that the policy of small-class teaching is the aspiration of many parents. In fact, their mentality behind such a policy is completely the same as that of parents sending their children overseas for studies, that is, we all hope that our children can receive good attention and education of a higher quality. However, a crisis has now appeared.
However, worse still, although as a Member of the education sector in the Legislative Council, together with several Members, I have requested a meeting with the Secretary for Education over this matter, despite the passage of several weeks and having asked if an urgent meeting could be held, I have so far not received a formal and positive reply. Does the Government have the sincerity to co-operate with the Legislative Council? And does it have the sincerity to do a good job of education in Hong Kong? Here, we have grave doubts about this.
The third issue is: In respect of integrated education, the Government proposed to increase the learning support grants for primary schools and secondary schools by 30%. It is useful to allocate additional funds to increase resources for schools, but this measure has only offset the inflation factor as no adjustments were made in the past few years. In respect of integrated education, we are facing great difficulties. In delivering conventional instruction, teachers have already devoted all their mental energy and exerted their utmost. However, if great student differences are introduced into a class, do teachers have the ability to cope? If proper corresponding support cannot be provided, we are worried that integrated education will eventually only be reduced to a very nice sounding slogan. However, it is the teachers and students who will suffer.
Therefore, we believe that the development of integrated education should be geared towards providing an additional special educational needs co-ordinator to each school and the establishment should also be expanded, so that teachers can truly take care of their students and after students have been transferred from special schools to ordinary schools to receive integrated education, they can really be benefited rather than just receiving an ineffectual kind of integrated education.
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Vocational education is a fairly good idea put forward in the Policy Address and Budget this year. We have to enable secondary education to diversify, so that various students can all give full play to their aptitudes. Vocational education should begin to be implemented at the senior secondary level, so we hope very much that the Government can heed various views on this issue more often. After the presentation of the Policy Address, I have had a great deal of exchange of views on matters of vocational education with many Honourable colleagues in the legislature. We all think that the work in this regard must be done properly.
Furthermore, on the development of higher education, we all hope that the Government can provide greater support to students pursuing associate degree programmes.
Deputy President, (The buzzer sounded) …
DEPUTY PRESIDENT (in Cantonese): Mr IP, your speaking time is up.
MR IP KIN-YUEN (in Cantonese): … strong support must be provided to education, so I hope the Financial Secretary can give us a proper response.
MR FRANKIE YICK (in Cantonese): Deputy President, this year, the Financial Secretary's Budget has adopted Hong Kong's competitiveness as the theme, stressing that Hong Kong needs to enhance its competitive edges to support Hong Kong's position as an international hub, which is a correct direction. Although the Financial Secretary stresses in the Budget that in 2013, trade involving the trading and logistics industries amounted to over $8.2 trillion, approaching four times of the GDP, so they are pivotal to Hong Kong's economic development, the measures taken in the Budget to support the development of the shipping and logistics industries all amount to "old wine in an old bottle".
In recent years, Hong Kong's overall competitiveness has been the focus of attention and the territory's position as the third busiest container port in the world has been replaced by Shenzhen last year. At the same time, in a report of the World Economic Forum on world competitiveness, Hong Kong's ranking has fallen to the seventh. In addition, the establishment of the free trade zone in 9816 LEGISLATIVE COUNCIL ─ 9 April 2014
Shanghai, with its replicable opening up policy, will also serve as a showcase for our neighbouring cities in Guangdong and there is no doubt that Hong Kong's role as a springboard for overseas capital entering the Mainland market will be affected to some extent.
Although the Government is intent on developing the high-value-added logistics industry, it has been seriously hobbled by the lack of land and manpower resources. Over the past three years, the Government has made available sites with a total floor area of 280 000 sq m dedicated to the logistics industry, but this is far from adequate in meeting the needs arising from the rapid development of the industry. The acute shortage of sites has made the rents of sites for the logistics industry soar, so the Government must make more sites available for the logistics industry. Apart from the 10 hectares of land in Tuen Mun West, there are also some sites that we have discussed for a long time, for example, the construction of a logistics park in Siu Ho Bay on Lantau, the development of caverns as warehouses and the proposal of the Financial Secretary to develop the logistics industry on the Airport Island, as mentioned by the Financial Secretary in his Budget. We believe they should all be implemented as soon as possible.
I am glad to learn that the Government has expedited the traffic assessment for the 10-hectare site in Tuen Mun West and it is anticipated that the site can be made available in phases in 2015. However, I feel concerned that if the Government still adheres to its policy of high land prices in offering the site by awarding it to the highest bidder through open tender for the development of modern logistics facilities, in the future, the rent will surely be high and ultimately, the industry, in particular, small and medium enterprises (SMEs), will not be assisted in solving the problem of a keen demand for land and the operating costs of the industry will be pushed up further. Therefore, once again, I call on the Government to reserve some of the land for the construction of government warehouses, which can be rented to small and medium-sized logistics operators, so as to support them in their sustained development.
In fact, at present, more than 90% of the existing logistics companies are SMEs and they are beset by the plight of soaring rents because of the Government's policy of high land prices and the shortage of sites for the logistics industry. Over the past two years, rents have increased by as much as 60%. Coupled with the minimum wage and the shortage of labour, operating costs are rising, so their burden is growing ever heavier. In addition, although the Government's fiscal surplus amounted only to $12 billion last year, a decrease of LEGISLATIVE COUNCIL ─ 9 April 2014 9817
80% from $60 billion in the previous year, the Government's fiscal reserves still amount to as much as some $740 billion. For this reason, I hope the Government can consider introducing some relief measures, including raising the rate of tax reduction for the rental expenses of SMEs on offices or shops, or even offer some additional tax breaks or licence fee waivers, so that they can get a breather.
In order to make optimal use of land, the Government is studying how to make improvements to "brownfield sites" scattered throughout the New Territories, including moving some of the existing operations into multi-storey buildings. The shipping and logistics industries support any measure that can release more sites for logistics use. However, I wish to point out that since the sites for logistics purposes are insufficient, at present, containers are stacked seven or eight layers atop one another on the "brownfield sites" used for the open storage of containers, whereas moving these containers requires the use of heavy lifting equipment called gantries, so a certain headroom is required and it may not be possible, as the Government hopes, to relocate these operations to multi-storey warehouse-type buildings. If the containers stored at "brownfield sites", be they loaded or empty ones, and various types of heavy machinery or goods, including precast parts for construction projects, cannot be relocated to multi-storey buildings, the Government must provide substitute sites to the existing operators. Otherwise, the operation of our port and the services of the logistics supply chain will be seriously affected.
However, I believe that it is worthwhile to consider the concept of using multi-storey buildings for the parking of heavy goods vehicles, articulated vehicles, and so on, so as to make more sites available for port backup or logistics purposes. Given Hong Kong's strategic position and its being a major nodal point in the region, the amount of re-exports handled by Hong Kong is ever increasing and the number of containers that can be carried by the new generation super container ships is also ever increasing, so these developments have made the already stretched port backup sites even more insufficient. This will seriously lower our efficiency in handling cargoes and affect the image that Hong Kong has established over the years as a highly efficient port. After the completion of the Hong Kong-Zhuhai-Macao Bridge in 2016, the hinterland for the sources of cargoes for Hong Kong will extend to the western Pearl River Delta Region. Since the time required for land transport will be reduced as a result, it is estimated that the volume of cargoes will increase accordingly, so the demand for logistics sites will be even keener. Since some of the sites in Kwai 9818 LEGISLATIVE COUNCIL ─ 9 April 2014
Chung and Tsing Yi are let under short-term tenancies as temporary car parks for heavy goods vehicles and container trucks, if the authorities can reorganize them and pool them together in a multi-storey car park, some of the sites can thus be made available for port backup purposes or the logistics industry. Coupled with the government measure to consolidate the existing backup sites with an area of about 100 hectares around Kwai Chung and Tsing Yi Container Terminals for the port and logistics industry later on, it is believed that the use of port backup land will be more cost-effective and the existing problem of a shortage of port backup land can be eased.
However, I urge the Government that it must by no means make cost recovery its sole consideration when considering the construction of a heavy-vehicle multi-storey car park. Since a container truck measures 50 ft from tractor to trailer, it is estimated that the scale of such a multi-level car park will surely be larger and its cost will surely be higher than those of ordinary car parks. If cost recovery or the "user pays" principle is adopted as the charging principle, it will be difficult for the transport sector to bear the parking fees in the future. Therefore, the Government should adopt the development of infrastructure to support the development of the shipping and logistics industries as the concept and consider the overall social benefits to Hong Kong of releasing the sites through such a plan as the basis of its calculation.
At present, although air cargoes account for just 1% of the total cargo volume in Hong Kong, the total value of air cargoes accounts for almost 40%, or about $2,800 billion, of Hong Kong's total value of external trade, so it can be seen that the air cargo industry is an important component of the logistics industry in Hong Kong. The air cargo industry mainly handles high-value goods and in recent years, economic growth in the Asia-Pacific Region has made the demand for high-value goods ever increasing. It is expected that the demand for air cargo services will grow ever keener, so the air cargo industry has become a hotly-contested sphere. Neighbouring regions, such as Shenzhen and Guangzhou, are actively expanding their airports to strengthen their shipment capacity. It is anticipated that by 2015, the number of international flights using the Guangzhou Baiyun International Airport will come close to that of the Hong Kong International Airport. In the face of fierce competition and given the near saturation in the capacity of the airport in Hong Kong, I hope the works on the third runway system of the airport can start soon and that it can be commissioned as scheduled in 2023, so as to maintain Hong Kong's position as an aviation hub.
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As regards public transport, in the near future, the Government will announce the blueprint for railway development after 2020. In Hong Kong, where land is scarce and the population dense, it is blameless for the Government to adopt the railway as the backbone of public transport but it also has to take into consideration other modes of public transport. At present, buses and minibuses are all suffering financial losses because of declining patronage and the $2 concessionary fare for the elderly and persons with disabilities cannot be extended to minibuses despite the passage of a long time, so there is no alternative but to raise the fares to ease operational pressure. This has doubtless increased the burden of transport fares on the public. Therefore, I hope the Government can launch an overall transport study as soon as possible. Apart from examining the roles that should be played by various modes of public transport, their future division of labour and long-term development in the context of an expanding railway network, the enhancement of the transport infrastructure and road network, the enhancement of the transport network and transport facilities on Lantau to tie in with its development, the appropriateness of introducing maxicab services on the Airport Island, whether or not the Sky Pier should be opened up, and so on, should also be reviewed altogether. The long-term transport planning should be carried out having regard to these factors.
The Financial Secretary clearly understands that not only would the shortage of manpower impede the development of certain industries but Hong Kong's overall economic development and competitiveness will also be hampered. At present, the unemployment rate is as low as 3.1%, so this can be considered full employment. Many industries, including the logistics and transport industries, are experiencing an acute shortage of manpower. For example, the airport community has a manpower shortfall of almost 6 000 people and other transport trades, such as cross-boundary drivers, coach drivers and minibus drivers, cannot hire enough hands either. Although the Labour Advisory Board has recently given the green light to importing workers for the construction industry and the vetting procedure will be expedited, what about the other industries? If we continue to tap the existing pool in the labour market, the cost of labour will only rise continually. Recently, the Government has submitted applications to the Legislative Council for supplementary provisions in relation to a number of projects and this is not totally unrelated to the increase in labour cost. If the Government cannot make vigorous efforts to solve this problem, many industries in Hong Kong will be deterred from pursuing further development.
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In fact, the importation of workers is only a short-to-medium-term method of resolving the manpower shortage. When there are enough local workers to fill job vacancies, the import of workers can stop. During the period of importing workers, the Government should reorganize its manpower training resources, so as to make improvements to the present mismatch in human resources through manpower training.
Although the Government has established a Maritime and Aviation Training Fund with $100 million to train more workers for the shipping industry, at present, only Certificates for Junior General Purpose Ratings are issued in respect of manpower training for local ferries and passenger vessels. To meet the keen demand for coxswain trainees, the trade has even taken the initiative to raise funds in the hope of attracting new blood to join the trade through a pilot training and support scheme mentioned in the Budget. However, the Maritime Services Training Institute under the Vocational Training Council cannot offer the relevant programmes due to a lack of resources, thus making the trade gravely concerned about the development of the local ferry and passenger vessel services. In view of this, I hope the Government can reorganize and increase manpower training resources to provide appropriate manpower training to the trades with such needs.
Next, I wish to put forward some proposals on looking after students with special learning needs. Although in the last financial year, the Government increased the Learning Support Grant and raised the ceiling of subsidy for each school from $1 million to $1.5 million, in the band-three schools that I have contacted, there are many students with special learning needs and the proportion of such students even exceeds one tenth in some of them. This additional amount of $500,000 is still inadequate and can only be used to hire a social worker with five years' experience. Just imagine: Together with the original social worker in the school under the "one school social worker per school" arrangement, are two people enough to cope with more than 100 students who require their attention? If a clinical psychologist is hired, the hourly rate is as high as $2,000 and the number of hours of counselling service provided by the Education Bureau is very limited, so the needy students cannot be assisted. Therefore, I believe the Education Bureau should raise the upper limit of financial assistance further having regard to the actual situation associated with the bands to which schools are classified.
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Lastly, on social welfare, in this financial year, the Government has allocated an additional $660 million to improve services for the elderly and we support this. However, for a long period of time, the services for the elderly and persons with disabilities have remained unable to satisfy the demand and the wait for placement in residential care homes is still quite long. The Labour and Welfare Bureau has to carry out more detailed planning. In particular, given the rapid ageing of the population in Hong Kong, it has become all the more necessary for the Government to prepare for a rainy day by carrying out detailed planning on the supply of and demand for services.
With these remarks, Deputy President, I support the Budget this year.
MR CHAN HAN-PAN (in Cantonese): Deputy President, before commenting on the area of healthcare in this Budget, may I ask Members if they have noticed the positioning of healthcare by the Financial Secretary over the past couple of years? Let me cite the budgets over the past three years as examples. In the 2012-2013 Budget, healthcare is regarded as an industry to be promoted and developed. In the 2013-2014 Budget, healthcare is regarded as livelihood affairs requiring attention and strengthening. In the 2014-2015 Budget (this year's Budget), healthcare has become a key related to Hong Kong's future ageing population and social development, which means that we have to save for the future and be forward looking. Why do I suddenly mention the positioning of healthcare? In fact, we can see from the aforesaid that healthcare affairs have been turned from opportunity into crisis. The Government used to talk about how this industry could be developed properly, but now it talks about the need to save for the future. Hence, it is a turning point as opportunity has been turned into crisis. The Government's previous effort to create opportunity for "making money" through promoting the development of private healthcare has now turned into a crisis of overspending in the public healthcare sector, a concern now expressed by the Financial Secretary. Personally, I think that "opportunity and crisis" actually have nothing to do with how much money the Government is willing to spend but how the money is to be spent.
In respect of healthcare, the Financial Secretary started by pointing out that recurrent allocation to the Hospital Authority (HA) has increased by nearly 50% over the past five years. On the surface of it, the provision of more than $47 billion is a large sum. In addition, the Financial Secretary has given a 9822 LEGISLATIVE COUNCIL ─ 9 April 2014 detailed account of a series of infrastructure projects for public healthcare in the Budget. He also said that the HA has received a grant of $13 billion to improve and upgrade its facilities over the next decade with the provision of addition beds, expansion of existing healthcare facilities, and so on. But regrettably, most of the expenditure items in the Budget are either projects under progress or have already received funding. Simply put, all these projects are merely "old bottles of wine", though commencement of work has not started. The Financial Secretary has not even bothered to add a new bottle of wine. More importantly, if we do some computation, we will find that expenditure on healthcare has remained at around 18%, less than 20%, of the overall recurrent expenditure. Apparently, the so-called additional allocation mentioned by the Financial Secretary can at most be described as exceeding the inflation rate, and money received by Cluster Hospitals from the HA might be very little. How can the existing healthcare services be improved with such a limited sum of money?
In this year's Budget, the Financial Secretary has merely issued many "post-dated cheques" without mentioning a word about another concern related to healthcare personnel. Does the Financial Secretary think that members of the public have already accepted the fact of a shortage of healthcare manpower or is he reluctant to allocate resources and work out a solution to provide additional healthcare manpower? As I have always emphasized, the public healthcare system is made up of both software and hardware. If one aspect is overemphasized, the system will be stuck in a quagmire in the end. The ones who suffer are patients. I very much hope that the Government can adequately deal with software and hardware, so that our public healthcare system can cope with the need of our ageing population in future.
Just now, I talked about the areas deserving criticism. However, the Budget also has some proposals deserving commendation, and that is, the Government will subsidize colorectal cancer screening and will study the launching of a number of pilot programmes. Come to think about this carefully. The launching of these pilot programmes can not only help patients, but also establish a database to enable the Government to understand the interaction between the living habits of Hong Kong people and various diseases. More importantly, prevention is always better than treatment. An early understanding of one's own health conditions can lower the risk of getting sick. This will not only enable patients to receive treatment promptly, but also allay their physical and mental suffering and reduce the substantial expenses incurred in the course of LEGISLATIVE COUNCIL ─ 9 April 2014 9823 treatment and aftercare. Besides cancer, genetic diseases can also be studied through the establishment of a central database. I sincerely hope that the Government can expedite the establishment of a database for genetic and rare diseases, so that people can have a more in-depth understanding of the diseases, and the study of safe examination and treatment can also be facilitated.
In the Budget, another focus of the Financial Secretary is to ensure the sustainable development of our dual-track healthcare system. He mentioned again the earmark of $50 billion six years ago for promoting the health protection scheme. Let me talk about the health protection scheme. Up till now, there has only been thunder without any consensus and specific details. For the time being, I will not talk about how much interest can be accumulated if the $50 billion is placed on term deposit at banks for promoting the health protection scheme. So far, no proposal has been made on how to utilize this sum of money, a "piece of fat pork" indeed.
This year, for instance, the provision for healthcare is only $47 billion. If the $50 billion earmarked for promoting the health protection scheme is spent appropriately, it can definitely be put to good use. In my opinion, the real significance of the health protection scheme is to divert people who can afford to take out health insurance or use private healthcare services to the private healthcare sector. If the Government uses this sum of money to subsidize people using private healthcare services, it is putting the cart before the horse. Such being the case, it would be better for the Government to divide the $50 billion into two portions; one portion of the money will be used for promoting and encouraging people capable of taking out health insurance, such as young people or middle-class people who have not taken out health insurance, and for helping them build up confidence in the private healthcare sector. Another portion of the money should be used in areas excluded from the existing public healthcare system or having less resources, such as the "database for genetic and rare diseases" as mentioned by me just now, or antenatal check-ups for pregnant women, including the T21 test for hereditary disease I have frequently mentioned. If all pregnant women can receive the T21 test, the risk of their children suffering from hereditary diseases will be greatly reduced. If part of the resources can be used for these purposes, they will substantially help Hong Kong invest in the future. Should the Government argue that the establishment of a database is very time-consuming, it may also consider allocating part of the money to the long-neglected dental services. As this issue 9824 LEGISLATIVE COUNCIL ─ 9 April 2014 has been discussed a number of times before, I will not deal with it in detail here. Nevertheless, I still hope that the Government can make good use of this $50 billion.
Lastly, I would like to say a few words about the development of Chinese medicine. In this regard, I think the Government really deserves "two more slaps". I remember the Chief Executive announced in the Policy Address that a site, originally earmarked for private hospital development, would be allocated for building a Chinese medicine hospital. Upon hearing this news, the industry players were very happy, they were pleased to see a breakthrough and thought that after suffering came happiness. But the Budget has in fact not allocated funding for the construction of a Chinese medicine hospital or for the development of Chinese medicine. Although the proposal has been put forward in the Policy Address, funding has not been earmarked in the Budget. So, is the proposal just an empty talk or will it really be put into implementation? If we are really determined to build a Chinese medicine hospital, substantial investment must be made in the overall development of Chinese medicine.
After becoming a Legislative Council Member, I have been closely liaising with the industry. I have frequently received complaints that subsequent to the establishment of the Chinese Medicine Council of Hong Kong, the industry has been regulated and standardized by various modes of Western medicine, resulting in the stagnant development of the Chinese medicine industry. In Hong Kong, the number of pharmaceutical firms manufacturing proprietary Chinese medicines has been on the decline, and there are only 200-odd pharmaceutical firms left. On the other hand, Chinese medicine graduates lag far behind Western medical practitioners in terms of remunerations and development, though both of them should supposedly be responsible for administering treatment and saving lives. Given such a big difference, how many young people will be willing to join the Chinese medicine industry and devote their youth to the future Chinese medicine hospital and even the overall development of Chinese medicine in Hong Kong?
In fact, we are very fortunate that we can freely choose between Chinese and Western medicine services. However, it is a pity that the Government still mechanically adopts the Western medicine approach to administer Chinese medicine, thereby smothering its development. With the construction of a Chinese medicine hospital, I hope the Government will invest more in the LEGISLATIVE COUNCIL ─ 9 April 2014 9825 development of Chinese medicine, so that the Chinese medicine industry and Chinese medicine students can really see the light. I also hope that the Government can really have longer-term planning in the Chinese medicine industry. Even though the Government is very eager to converge with the international community by implementing the Good Manufacturing Practice (GMP), the Chinese medicine industry still has to face many problems in implementing the GMP and can only go global with the Government's support and assistance on many fronts. But apparently, the Government's effort in the regulation of Chinese medicine is still inadequate.
In our view, the proposed Innovation and Technology Bureau will greatly facilitate the development of Chinese medicine. However, if the initial management model is not properly thought out and the approach of Western medicine is arbitrarily used to regulate Chinese medicine, some precious Chinese medicine prescriptions which have been retained for years may be lost. Some of these prescriptions have actually been widely circulated since the Ming Dynasty. A simple Chinese medicine might have been passed down through hundreds of generations. However, if Chinese medicine is regulated by adopting the Western medicine approach, some ingredients in a prescription might be prohibited. If one of the ingredients is prohibited, the whole prescription will actually become ineffective. Therefore, if we prohibit the use of this and that ingredient, Chinese medicine as a heritage will soon disappear from Hong Kong. Moreover, some small pharmaceutical firms in Hong Kong can hardly survive as well.
(THE PRESIDENT resumed the Chair)
With the construction of a Chinese medicine hospital, I hope Chinese medicine will make breakthrough progress. Although I am aware of the great effort made by Dr KO on this front, I also hope that greater effort can be made in funding, subsidy and even support for the industry.
With these remarks, President, I support the Budget.
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MR CHAN KIN-POR (in Cantonese): President, as Hong Kong's competitiveness has shown signs of decline in recent years, this Council has made repeated calls for the Government to timely address this issue squarely. In this year's Budget, the Financial Secretary has made a positive response by raising issues pertaining to Hong Kong's competitiveness and the development of industries. Although we consider that there are still many inadequacies, it is nonetheless a good start for the Government has finally acknowledged and realized where the problems lie.
It is pointed out in the Budget that our competitive edge cannot be taken for granted, nor is it self-sustaining. It is essential that we seize every opportunity to improve. On the other hand, we should adapt to evolving circumstances. Meanwhile, the Budget considers that there is still ample room for the four pillar industries to flourish and keep moving up the value chain, providing support and job opportunities for our economy. Furthermore, it is pointed out in the Budget that we must nurture with patience new industries which have international competitiveness, with a view to opening up more new opportunities for our future economic development.
While I fully agree with the aforesaid analysis in the Budget, I think more efforts should be made in order to upgrade and reinforce Hong Kong's competitiveness. But obviously, the proposals put forward in the Budget are not forceful enough. In upgrading the four pillar industries, only some remedial measures have been carried out. As the Government still insists on adhering to the principle of "big market, small government", it has not proposed any in-depth development and reform measures. In fact, efforts can be made in quite a number of areas. For instance, the Government may strive for collaboration with free-trade zones on the Mainland in a more proactive manner, or actively attract investment by international investors. It is worthy for us to conduct such studies.
I hope the Financial Services Development Council can put forward more innovative proposals in future to explore a greater number of and more extensive fields for Hong Kong's financial services industry and enable it to pursue diversified development. As regards the remaining three pillar industries, the Government should conduct a comprehensive review and propose reform measures to upgrade the overall competitiveness of the industries.
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As regards the development of new industries, besides innovation and technology, the Budget has mentioned nothing about other industries which can be developed, including the six priority industries. In fact, in the long run, it is imperative for Hong Kong to develop more industries, so that the economy can develop in a more diversified and stable manner and avoid over reliance on the development of financial services and trade.
After the outbreak of the financial turmoil, financial businesses contracted sharply, and Hong Kong people suffered great hardship at that time. As the saying goes, "lessons from the past can guide the future". Now that the economy is robust and Hong Kong is in a state of full employment, if we show no interest in developing emerging industries, it is totally wrong. Honestly, the financial market can take a dramatic turn at any time. No one can guarantee if Hong Kong can maintain its status as a financial hub in the long run. Therefore, a diversified economy must be our way forward.
Of the six priority industries, innovation and technology is expected to prosper with the Government's vigorous support. As regards medical and education services, some people hold the view that they should not be developed as industries. As for the remaining industries, including testing and certification, cultural and creative industries, and environmental industries, I believe efforts are being made to develop the businesses. Nevertheless, in the absence of the Government's vigorous support, the pace of development will definitely be beset with difficulties, and industries can hardly develop successfully. I hope the Government can take into consideration the diversification of Hong Kong's industrial structure and continue to allocate resources to support the development of emerging industries.
Another highlight of the Budget is the analysis of a structural deficit and an ageing population. Should we fail to address the shadows cast by these two problems at an early stage, they can turn into time bombs at any time.
It is pointed out in the Budge that if government expenditure keeps growing and outpacing economic and revenue growth, a structural deficit would surface in seven to 15 years. The Financial Secretary considers that although the projections spark off a clear warning, we should not be over worry because our economy will continue to grow in the coming 20 to 30 years. This implies that our revenue will continue to rise and we can still afford expenditure increases, 9828 LEGISLATIVE COUNCIL ─ 9 April 2014 only that the growth in public expenditure must be restrained. Therefore, the Budget proposes that public expenditure should not exceed 20% of GDP. In addition, the Government should save for future generations and set up a "Future Fund".
Quite a number of Members have criticized the Financial Secretary for "crying wolf" again. I agree that the Government should exercise prudence in financial management, but it should observe the principle of "spending or saving money for good reasons" rather than allowing no room for change by adhering to the principle that public expenditure should not exceed 20% of GDP. Otherwise, it will find its hands and feet tied when responding to social needs or implementing new initiatives in the future. The setting up of a "Future Fund" is actually aimed at freezing part of the reserves for the future. Although I have no objection to savings because it is a good thing, I think the community should be allowed to discuss whether or not this method should be used. After all, Hong Kong has more than $700 billion in fiscal reserves. Coupled with the Exchange Fund, Hong Kong actually has more than $1,000 billion. A too conservative approach is not necessarily appropriate.
Nevertheless, although the Budget has pointed out the shadows cast by public finances, the method of reducing expenditure or savings still cannot adequately resolve the problems faced by Hong Kong. Only through fostering robust growth in our economy and upgrading the competitiveness of our economy can greater stability be achieved in our economic development to cope with future challenges. However, as I pointed out just now, the Budget has not outlined any new direction for promoting economic development. It is right for the Government to remind the community to be vigilant while enjoying security, but adequate effort has not been made as no proposals have been put forward for promoting further economic development.
The Budget has also responded to some concerns of the business sector, including inadequate commercial land. Given that exorbitant office rentals have pushed up operating costs and has directly deterred investors, the provision of additional commercial sites should be a top priority. The Budget has proposed that the 2014-2015 Land Sale Programme will include seven commercial sites and one hotel site. In addition, the Government will increase land supply for commercial use in different districts through seven measures, so as to LEGISLATIVE COUNCIL ─ 9 April 2014 9829 accommodate more economic activities and create more job opportunities. The Government's decision to provide additional commercial sites to facilitate business development is absolutely right.
On the other hand, it is worth mentioning that, despite the substantive measures proposed to alleviate poverty and support the disadvantaged, the Policy Address and the Budget have offered only limited assistance to the middle class. In fact, the middle class is facing considerable pressure in life. The Government has, on the one hand, made vigorous effort in alleviating poverty, but it has not offered much assistance to the middle class. Naturally, this will cause dissatisfaction among the middle class. Meanwhile, although the Government has always encouraged childbirth to boost the future young population, it has failed to provide incentives to encourage members of the public, especially the middle class, to rear children. I hope Child Allowance can be substantially increased for the purpose of encouraging childbirth while reducing the burden on the middle class.
Lastly, I would like to say a few words on issues of concern to the insurance sector. With reference to the ageing population problem, the Budget has mentioned a voluntary health protection scheme (HPS), the reservation of $50 billion as well as the Government's intention to provide tax reliefs for subscribers of health protection insurance.
In fact, the Government has decided to substantially reduce the subsidies for healthcare insurance by merely providing a High-risk Pool and tax reliefs, and the expected subsidies will substantially reduce by 90% from $50 billion to $4.3 billion. From the perspective of premium concessions, if the annual premium under the HPS is $4,000, a 30% discount as previously proposed would mean an annual saving of $1,200. At present, the Government only mentions tax reliefs; the previous proposals of a 30% discount and discounts for long-term insurance are gone. As the average tax rate for Hong Kong people is approximately 8%, even if the $4,000 premium is entirely tax-free, it would only mean a concession of $320. As the appeal to members of the public has been greatly reduced as a result of the enormous gap, the insurance sector is doubtful of the success of the HPS. I hope the Government can reconsider making use of the $50 billion to provide subsidies and reinstate the original concessionary terms to implement and promote the HPS.
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Furthermore, the Budget has also mentioned offshore Renminbi (RMB) business and pointed out that Hong Kong, with its first-mover advantage, should strengthen its existing services, including RMB-denominated cross-border reinsurance, which is one of our concerns.
Honestly, owing to the great complexity of the relevant rules, regulations and restrictions, the trade has all along been uncertain about whether RMB-denominated cross-border reinsurance business can be conducted in Hong Kong. Now the Government has clearly stated that such business can be operated and will be further strengthened. This will offer great assistance to Hong Kong's reinsurance business and attract more reinsurance companies to set up business in Hong Kong. The RMB premium collected by Hong Kong's reinsurance companies can also be spent on Mainland investment projects. I believe the trade will follow up the matter shortly and endeavour to expand the relevant business.
In last year's Budget, the Financial Secretary proposed to reduce half of the profits tax on the offshore insurance business of captive insurance companies. The Government will continue to strengthen and promote its effort and, through overseas and Mainland economic and trade networks, attract more enterprises to set up captive insurance companies in Hong Kong. Nevertheless, as the number of concessions offered by the Government is smaller than those offered by similar schemes in overseas countries, our scheme might become less attractive. After the implementation of the scheme, I hope the Government can conduct a comprehensive evaluation of its effectiveness and study the introduction of more concessionary measures to boost its competitiveness.
I so submit.
IR DR LO WAI-KWOK (in Cantonese): President, the 2014-2015 Budget provides a forecast of the future fiscal situation of the Government, which serves to remind all sectors of the community to pay due regard to the possible surface of a structural deficit in future. This is forward looking. Although the current economy is still vibrant, with a continuous growth in social welfare and healthcare expenditure, the community should seriously consider how to stimulate economic growth and create wealth; otherwise our fortune will be used up if no actions are taken. In the following part of my speech, I will reflect the views and suggestions of the industry and society on some major concerns.
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The theme of this year's Budget is "competitiveness". The Government has invested substantial resources in infrastructure development, including financial services, technology, transport and environment, in order to enhance the status of Hong Kong as an international hub and develop Hong Kong into a smart and liveable city. But obviously, the coverage on how to promote the development of various industries is inadequate. Undeniably, the Financial Secretary has also pointed out the current situation of some important industries. For example in paragraph 63, it is mentioned that the four pillar industries contribute close to 60% of GDP, and currently employ over 1.7 million people. As regards how to stimulate the growth of various industries strategically through fiscal measures and allocation of resources by the Government, the initiatives proposed by the Financial Secretary are still fragmented, without formulating any comprehensive policies and strategies. Inevitably, the industries are disappointed. I have also pointed out time and again in this Chamber that the Government has yet to formulate a long-term and comprehensive industrial policy.
President, regarding the new momentum for the development of Hong Kong economy, since I have been elected a Legislative Council Member, I have, together with friends from the engineering and technology industries, urged the Government through various channels to set up a Technology Bureau expeditiously to formulate the objectives and policies for the development of the innovation and technology industries. In this year's Policy Address, the Chief Executive announced re-initiating the setting up of the Innovation and Technology Bureau to actively respond to the demands of the industries. I hope Honourable colleagues and various sectors of society will give full support to this proposal because the promotion of innovation and technology will not only conducive to developing new industries, but also enhancing the operational efficiency of different industries, thereby strengthening the competitiveness of Hong Kong as a whole.
Certainly, apart from perfecting the Government's structure, the input of resources is also essential. The Financial Secretary has announced two new measures to optimize the use of the Innovation and Technology Fund (ITF), including the establishment of an Enterprise Support Scheme, under which the funding ceiling for each research and development (R&D) project will be raised from $6 million to $10 million. The scope of funding will also be extended, with stronger support given to downstream R&D and commercialization activities. In addition, the ITF will provide an annual funding of up to $24 million to the six designated universities to provide seed money for R&D 9832 LEGISLATIVE COUNCIL ─ 9 April 2014 projects, so as to encourage students and teachers to start R&D businesses. It is believed that these measures are welcomed by the industries.
In my view, to promote the industrialization of technology industries, the commercialization and industrialization of commodities, and the internationalization of industries, the SAR Government should roll out more flexible policy initiatives to attract the sector to increase their investment in technology infrastructure, improve mobile Internet and expand the regional data centres. As an incentive for enterprises to conduct R&D, allowable deduction for R&D expenditure should be increased to 200% or 300%. Furthermore, the current R&D funding mechanism should be improved to facilitate application by big, medium and small enterprises. Meanwhile, the Administration should expeditiously take forward the legislative work on private equity funds as mentioned by the Financial Secretary in paragraph 80 of the Budget in order to facilitate financing of the innovative industry.
President, the green industry is also one of the industries in Hong Kong with competitive edge. I believe it will become the bright spot of our economy in future under the promotion of appropriate policies. The Financial Secretary has indicated that in order to build a livable city, Hong Kong needs to keep investing in environmental infrastructure. For example, in respect of the management of municipal solid waste, the Administration will invest about $30 billion in waste recycling and treatment facilities. In addition, in this year's Policy Address, the Chief Executive has announced the setting up of a $1 billion Recycling Fund to promote the sustainable development of the recycling industry. However, as I pointed out in my earlier submission to the Chief Executive, the Government should provide financial incentives, including land, capital and technical facilities to support the construction of modern recycling facilities by the industry.
In early March, some members of the Legislative Council Panel on Environmental Affairs paid a duty visit to four European countries, including the United Kingdom, the Netherlands, Denmark and Sweden. Public officers including Secretary for the Environment WONG Kam-sing had also joined us. During the visit, I was deeply impressed in two areas. Firstly, the relevant government departments of the countries visited by us have adopted similar policies and strategies on waste management, that is, waste reduction at source, recycling and waste-to-energy. According to the Office of the Mayor of London and officials of the Department for Environment, Food and Rural Affairs in the United Kingdom, the landfill tax, which has been raised since 1999, is currently LEGISLATIVE COUNCIL ─ 9 April 2014 9833 charged at a standard rate of £72 (equivalent to about HK$923) per tonne. As a result, the volume of landfill disposal has reduced substantially while the amount of waste for recycling and incineration has increased, thereby promoting the growth of the recycling industry. Secondly, the modern waste-to-energy facilities are very advanced. They can meet the stringent emission performance standard of the European Unions, and at the same time, perform the functions of electricity and heat generation or cooling, so as to meet community needs in different seasons. Furthermore, the design of such facilities can also integrate with the community so that they are regarded as part of people's life.
To achieve the policy objectives in the Hong Kong: Blueprint for Sustainable Use of Resources 2013-2022, I think Hong Kong should make reference to the advanced experience of foreign countries and set up a comprehensive waste reduction, collection, disposal and recycling integrated management system. Resources should be invested in enhancing waste management infrastructure, including organic resource recovery facilities, integrated waste management facilities which can turn waste to energy, advanced recycling equipment, and further expansion of landfills. Given its advantages in resources and talents, Hong Kong can upgrade itself to be a regional centre in environmental protection technical service. Hong Kong can establish itself as a low-carbon city, enabling people to enjoy a quality life on the one hand and create business and employment opportunities by means of green infrastructure on the other.
President, "If a thousand, ten thousand mansions could be built/That shelter all the poor scholars, together in joy."1 It is true that the Financial Secretary has made great coverage in his Budget on housing, land supply and infrastructure planning, but I and my friends in the relevant industries would like to draw the authorities' attention to the following points. Firstly, regarding the new housing production target, even if the Housing Authority (HA) is required to fulfil the commitment of the authorities made in 2013 to build an average of 20 000 public rental housing units and 5 000 Home Ownership Scheme flats per annum, it will have to face great financial pressure, and the shortfall in financial resources may have to be borne by the Government. Therefore, the Government and the HA should expeditiously assess and discuss possible financial arrangements. Secondly, in identifying more land for housing development, it is also necessary to balance different land uses, such as lands for supporting the industrial and commercial operations, particularly the development of innovation and
1 Watson B. (2002) The Selected Poems of Du Fu. New York, Columbia University Press 9834 LEGISLATIVE COUNCIL ─ 9 April 2014 technology, environmental protection and logistics industries. Thirdly, given that there will be a construction spree in Hong Kong in the future to meet the housing supply, the SAR Government should conduct a comprehensive and long-term planning on the New Development Areas as well as the construction of railways and other infrastructure projects, with particular attention given to the financial commitment involved and manpower supply.
In respect of manpower supply, the Financial Secretary mentioned, in paragraph 105 of the Budget, that shortage of manpower hampers the development of certain industries. He opined that various sectors of society should, through candid and open discussions, explore the importation of foreign talents and workers what we are in short supply. I consider this attitude pragmatic. According to a territory-wide large-scale survey conducted by the Construction Industry Council, the Hong Kong Construction Association and the Hong Kong Federation of Electrical and Mechanical Contractors Limited in 2013, there is a shortage of workers in the construction industry. With an average shortage rate of more than 15%, the shortfall of workers is estimated to be around 10 000 people, thus imposing great challenge to the construction progress and site safety. The Construction Industry Council has also predicted that in the next 10 years, public and private projects worth $16 billion to $18 billion per annum will be implemented in Hong Kong; and coupled with the fact that nearly half of the construction workers at present are more than 50 years of age, the problem of manpower shortage in the construction industry will be even more serious.
I have reiterated time and again that when planning infrastructure projects, the SAR Government should properly analyse the manpower demand of such projects for various professionals in different construction trades, and provide corresponding resource support. The authorities should, on the one hand, ensure the supply of sufficient civil servants in the professional grade and the availability of supporting resources, and on the other hand, face squarely and solve expeditiously the problems of shortage and imbalanced supply of construction workers. The authorities should allocate resources to co-operate with the industry in conducting a detailed survey and projection on human resources, as well as enhance skills training schemes to attract local new entrants. Moreover, the authorities should, in consideration of the situation of manpower shortage in different types of work, compile a list of trades for possible importation of labour under the Supplementary Labour Scheme. Professional organizations of the relevant trades should be asked to update and manage the list, as well as co-ordinate the allocation of quota, so that the implementation of infrastructure projects will not be affected due to manpower shortage.
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As for the long-term financial commitment, after the delivery of this year's Budget, the Report of the Working Group on Long-Term Fiscal Planning (Working Group) is published. In my view, the report will not only enhance the transparency of public finances, but also issue a warning to the community. With an ageing population and declining workforce in the future, the rate of economic growth and increase in government revenue will slow down, but expenditure on healthcare, social welfare, and so on will still be on the increase, thereby a structural deficit may surface. This is not alarmist talk. How to ensure the sustainability of public finances by prudent financial management and keeping the expenditure within the limits of revenues is a subject which should be carefully considered by the Government and the community as a whole.
President, according to Article 107 of the Basic Law, "The Hong Kong Special Administrative Region shall follow the principle of keeping expenditure within the limits of revenues in drawing up its budget, and strive to achieve a fiscal balance, avoid deficits and keep the budget commensurate with the growth rate of its gross domestic product." In undertaking any public financial commitment, especially when recurrent expenditure is involved, the authorities should give due consideration to this Article as well as the financial status of the SAR Government in the medium and long run. The Working Group suggests the setting up of a "Future Fund" as a savings plan, which may be a desirable option. In my view, the Government should adopt a macro-perspective view to interpret the notion of "keeping expenditure within the limits of revenues".
Since the revenues of the Government depend on the economic situation of Hong Kong, the authorities should adhere to the principle of "spending where necessary", stimulate and promote local economic development by means of fiscal and monetary policies, and proactively invest in the future, so as to enhance the long-term competitiveness of Hong Kong as a whole. Only through economic development will government revenues continue to grow steadily, thereby enabling us to radically solve the funding problem in meeting the expenditure on social welfare and setting up a safety net for the poor, the elderly and the disadvantaged. Only through economic development will there be quality employment and entrepreneurial opportunities, and opportunities for upward mobility for all sectors of society, especially the younger generation.
With these remarks, President, I support the Appropriation Bill 2014.
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MR POON SIU-PING (in Cantonese): President, when the Financial Secretary announced the Budget in the past, members of the public were generally concerned about the relief measures proposed to alleviate the burden on people's livelihood. This year, the situation is a little bit different. The discussion on the Budget has focused on how to maintain long-term financial stability of Hong Kong and how to avoid a deficit which may lead to a structural fiscal crisis.
Undoubtedly, such a change is due to the different concerns in the policies proposed by Chief Executive LEUNG Chun-ying and the Financial Secretary. Following the introduction of the Old Age Living Allowance last year, the Chief Executive has, in this year's Policy Address, proposed a larger-scale poverty alleviation blueprint which requires an annual funding of more than $3 billion. In addition, various voices in society requesting for improving the livelihood of the disadvantaged have got on the nerve of the Financial Secretary who is well-known for being miserly and insisting on maintaining fiscal surplus and stability. As a result, the Budget has almost become the Financial Secretary's statement of his fiscal philosophy.
At the beginning of the Budget, the Financial Secretary pointed out the keys to success of Hong Kong includes a free economy and a simple tax regime. In the Index of Economic Freedom released by The Heritage Foundation, for example, Hong Kong ranked first for many years. Also, Hong Kong has been accredited by the World Bank with a top ranking for ease of paying taxes in its survey "Paying Taxes ― The Global Picture". The Financial Secretary considers that these are Hong Kong's comparative edges and social values which should be treasured. But behind these keys to success, there are other comments on Hong Kong by some international authoritative organizations which have not been mentioned by the Financial Secretary. Maybe the Financial Secretary is reluctant to mention them. For instance, The Economist points out that in terms of crony capitalism, Hong Kong is the most serious in the world. By taking advantage of the policies tilted towards the business sector, the tycoons can grab what they want by hook or by crook. Under the convenience of the tax regime, the Gini Coefficient in Hong Kong is the most serious among members of the Organization for Economic Cooperation and Development. In my opinion, those international comments, which have not been mentioned by the Financial Secretary, can better reflect the nature of the so-called keys to the success of Hong Kong. They should not be the social values pursued by Hong Kong.
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The Hong Kong's tax regime, which is applauded by the Financial Secretary, is a product of more than half a century ago. However, following the rapid economic growth in 1960s and 1970s and the economic transformation in 1980s and 1990s, the social landscape of Hong Kong is completely different and people's aspirations have also substantially changed. At present, the main sources of wealth accumulated by the affluent class in Hong Kong, such as capital gains, dividends, inheritance and so on, are completely tax free. From 1996 to 2011, the salaries tax paid by the 20% of the highest-paid population is less than 10% of their incomes. But the incomes earned by them are more than 55% of the incomes of all households in Hong Kong. This is exactly the tax regime which the Financial Secretary takes pride in.
In the Budget, the Financial Secretary mentioned that he has noticed the people's worry about the excessive growth in government expenditure and that Hong Kong will move towards welfarism. However, the people's attitude towards the use of public funds by the SAR Government is very complex. According to a survey conducted by the Public Opinion Programme of the University of Hong Kong after the delivery of the Budget, more than half of the respondents agreed with the Financial Secretary that spending should be contained to avoid structural deficit, and they considered the tax regime of Hong Kong fair. But when they were asked whether the relief measures proposed in the Budget were adequate, or whether the distribution of wealth in Hong Kong was reasonable, more than 60% of them considered that it was inadequate and unreasonable. It is not difficult to explain such conflicting answers. This has indicated that people have not linked up the unreasonable social phenomena with the institutional problems. Neither have they realized that social injustice stems from unfairness in our systems. Furthermore, they believe in the Government's one-sided propaganda about the success of Hong Kong.
In the Budget, the Financial Secretary has cited three projections from the Report of the Working Group on Long-Term Fiscal Planning. On the premise that the tax regime and tax rates remain unchanged, various degrees of crises are projected according to the growth in government expenditure. In my opinion, the premise is questionable. In Hong Kong, direct taxes were first introduced in 1938 to 1939. Back then, the colonial Government levied direct taxes because it had to address the extreme shortage of basic education during wartime, and to meet the needs of the poor, the sick and the disadvantaged. I do not see why Hong Kong should stick to a tax regime which is tilted towards people with 9838 LEGISLATIVE COUNCIL ─ 9 April 2014 vested interests. If our tax regime has failed to catch up with the needs of society, I hope the Financial Secretary will take the opportunity to conduct a comprehensive review of our tax regime and consult the public. This will be more pragmatic than setting up a "Future Fund" as proposed in the Budget.
Finally, I must mention that there are only five relief measures proposed by the Financial Secretary in this year's Budget, involving about $20 billion of public money. The relief measures for this year has been substantially reduced compared with the proposed 11 items involving more than $33 billion last year. According to the Financial Secretary, the Chief Executive has proposed a number of poverty alleviation measures in this year's Policy Address in order to improve the livelihood of the grassroots. I agree with this basic principle, that is, the Budget should not repeat the same relief measures which have been mentioned in the Policy Address. For example, as specific measures will be introduced to improve the Comprehensive Social Security Assistance (CSSA) in the short term as mentioned by the Chief Executive in his Policy Address, the Financial Secretary has reduced the extra allowance to CSSA recipients from an amount which equals to two months of the standard rate CSSA payments of last year to one month this year. I have great reservations about the substantial reduction in the support to low-income families who are not on CSSA in the current financial year, such as the abolition of electricity subsidies and paying one month's rent for public housing tenants instead of two months'. Although the Low-income Working Family Allowance has been proposed in the Policy Address, the proposal will be implemented next year the soonest. The Financial Secretary has reduced support for them too early.
President, the Government will create 2 500 civil service posts this year, which will slightly alleviate the manpower shortage in the Civil Service. Among the newly created posts, about 670 posts will replace Non-Civil Service Contract (NCSC) positions. But in fact, there are more than 4 700 NCSC staff who have worked continuously in the Government for five years or more. I hope the Government will exert greater efforts to turn these experienced NCSC staff into civil servants.
President, I so submit.
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MR CHRISTOPHER CHUNG (in Cantonese): President, with regard to the Budget this year, the Democratic Alliance for the Betterment and Progress of Hong Kong (DAB) has earlier described it as balanced and unpretentious. In addition, I think it is even more appropriate to describe the Budget as "bland" because it is not "sweet and savoury" enough.
I think the Budget is not "sweet" enough because the value of the one-off sweeteners handed out this year has been reduced sharply from $33 billion last year to $20 billion this year. The sweeteners this year are definitely not sweet enough. In particular, the rates concession this year has been reduced so that only two quarters instead of four quarters are covered. In addition, the absence of the $1,800 electricity subsidy has caused dissatisfaction among quite a number of middle-class and grass-roots people. As regards my comment that the Budget is not savoury enough, as Members are aware, the Budget read out by the Financial Secretary was so bland that a Member had to look at something else. As suggested by Mr CHAN Kam-lam, the Financial Secretary might as well consider adding "some sex appeal" in his budget in future.
Let me now get down to business. Inevitably, as members of the public will focus their attention on sweeteners, the reduction of sweeteners handed out by the Financial Secretary this year has inevitably caused dissatisfaction among members of the public. Nevertheless, if we look from a more pragmatic angle, the fiscal surplus this year is only $12 billion, far less than the $64.9 billion recorded last year. Given the substantial reduction in the surplus, I believe the reduction in sweeteners is understandable. However, some measures which can benefit people in all strata, such as the electricity subsidy, should not be scrapped across the board, for doing so will very probably cause dissatisfaction among the public, especially middle-class people who have received no benefit at all. The abolition of the electricity subsidy will reinforce their belief that middle-class people suffer the most, for they have to pay tax without receiving any benefit. In this regard, I wonder if the Financial Secretary can examine reducing the amount of subsidy from $1,800 to $1,000 and retaining a small amount of subsidies which can benefit society as a whole, so that even middle-class people are given a cube of sugar for their coffee.
In addition, it is stated in paragraph 142 of the Budget that, for the purpose of preserving revenue, government departments will review their fees and charges, including water charges, fees for use of leisure facilities, and charges 9840 LEGISLATIVE COUNCIL ─ 9 April 2014 relating to environmental hygiene services. I have great reservations about the Government's intention to review these fees and charges which are related to people's daily necessities. For instance, drinking water is a necessity for the general public. If water charges are increased, the Government is in effect imposing a regressive tax on the grassroots. The levying of an extra $1 for each unit of drinking water will mean a lot to the grassroots, though the impact on the rich will be limited. Therefore, increasing water charges is in effect penalizing the grassroots. In my opinion, when it comes to revising fees and charges related to people's livelihood, the Government must observe the principle of not increasing the burden of the grassroots, and it is more appropriate to target the adjustments at the rich and commercial users.
I would like to say a few words about building management. The Government has all along emphasized that building management is the responsibility of owners. However, building management problems are not only numerous, but also complicated and diverse. I have engaged in district affairs for more than two decades and have handled a considerable number of tricky problems related to building management. Many small owners and owners' corporations (OCs) cannot handle these problems at all. They can only manage to hold on with the assistance of the Government and related organizations. Bid-rigging in building works is a case in point. The Government has all along encouraged owners and occupants of old buildings to carry out building maintenance. However, in the eyes of many people, building maintenance is a large piece of "fat meat" or a "big business". Imagine there are more than 20 000 private buildings in Hong Kong which are over 30 years old. If the maintenance fee for each building is $10 million, this large piece of "fat meat" would have attracted unlawful elements to conspire to bid-rigging.
In fact, the undesirable practice of bid-rigging has been in existence in the industry for long. This problem was raised by the DAB as early as 2011 when the prevalence of bid-rigging of old building in the Central and Western District came to our notice. Under the law, OCs are required to commission consultants or engineers to advise on building works. During the bidding process, some consultants bid for projects at an unbelievably low price, which might range from $1,000 to several hundred dollars. Certainly, their target is not the consultant fee. Instead, they aim to inflate the construction fees by more than two or three times through conspiring with construction companies they are familiar with to bid-rigging. Syndicates involving in bid-rigging will compel their competitors by hook or by crook to give up bidding for the projects or pick on them should LEGISLATIVE COUNCIL ─ 9 April 2014 9841 they succeed in bidding for the projects, thus causing difficulties to them when they commence the works.
In order to tackle the aforesaid problems, the authorities concerned must not treat the problems lightly because, according to the information provided by the Government to the Legislative Council last year, the Independent Commission Against Corruption (ICAC) received more than 200 complaints each year about the involvement of corruption in building maintenance, and of these cases, more than 100 could be followed up. Nevertheless, only one or two cases were actually prosecuted and convicted. Hence, there was a complete lack of deterrent effects. I would like to urge the ICAC and the police to step up efforts to handle these complaints solemnly and enhance enforcement against bid-rigging.
President, with the continued increase in the number of old buildings and the surge of building maintenance problems, coupled with problems related to guesthouses, "sub-divided units", and so on, the complexity and difficulty of building management has greatly increased. Despite the establishment of the District Building Management Liaison Teams by the Home Affairs Department in all the 18 districts across the territory to support owners and OCs, such support is merely ineffectual because OCs will still find themselves helpless whenever they are faced with thorny problems.
For instance, the No. 3 alarm fire which broke out at Continental Mansion in North Point last year had exposed the outdated and ineffective guesthouse licensing system. It turns out that in vetting and approving applications for guesthouse licences, the authorities concerned do not consider the requirements of deeds of mutual covenant and the views of residents. So long as a guesthouse complies with the building structure standards under the Buildings Ordinance and the fire safety and hygiene standards under the Fire Services Ordinance, approval will be given to the guesthouse for business operation. Such an outdated arrangement has turned guesthouses into "invisible bombs" in commercial/residential buildings, coupled with the wide range of problems caused by unlicensed or "shadow" guesthouses, building management is beset with difficulties.
Hence, the key to supporting owners lies not in the number of District Building Management Liaison Teams or their manpower. We have simply not taken into consideration the interests of small owners in private buildings in 9842 LEGISLATIVE COUNCIL ─ 9 April 2014 various legal aspects. Hence, I would like to urge the Home Affairs Department to examine the enquiries and requests for assistance made by OCs and owners to find out which laws are not conducive to the operation of OCs and small owners, and determine if it is possible to conduct a review or revise the laws so as to facilitate building management. The Government should also provide additional resources to provide instant support services for small owners and OCs. This is the only way to resolve building management problems and bid-rigging in building works.
President, I would also like to say a few words about the cultural and creative industries. While the theme of the Budget this year is Hong Kong's competitiveness and the four pillar industries have remained to be our major development projects, nothing has been mentioned about the cultural industry. However, according to the latest statistics released by the Census and Statistics Department (C&SD), the contribution made by the cultural and creative industries to Hong Kong economy has continued to rise. From 2005 to 2012, the cultural and creative industries saw an average annual increase of 9.4%, with their added value standing at $97.8 billion in 2012, contributing to 4.9% of GDP. Furthermore, some 200 000 people are engaged in these industries, and the services exported by the industries have reached $25.9 billion. All these figures reflect that our cultural and creative industries have achieved impressive results in recent years. I believe the "pie" can be made even larger if the Government makes a deliberate attempt to give the industries a helping hand.
I have stated more than once in this Chamber that the Government is duty-bound to promote overseas Hong Kong's arts and cultural industries. Apart from attracting overseas tourists to visit Hong Kong through local arts and cultural events, Hong Kong, being a cultural city in Asia, should also take the initiative to promote its arts and culture to overseas countries. In recent years, the entire world has been swept by Korea's pop culture. Korean movies, artists, singers, and food have been exported to Hong Kong one after another. We also watch Korean drama series every evening. Hong Kong can indeed borrow Korea's success in exporting its culture. Hence, I would like to call on the Government to assist Hong Kong's arts and cultural sector to "go global" by exploring performance opportunities in the Mainland and overseas countries. Cultural officials should be deployed to the economic and trade offices in the Mainland and overseas countries to actively organize publicity and promotion activities, hold discussions and seminars, and identify venues, with a view to introducing Hong Kong artists to various provincial/municipal authorities in the LEGISLATIVE COUNCIL ─ 9 April 2014 9843
Mainland and overseas countries. I believe that by doing so, we can build up a proactive and positive image for Hong Kong as a world-class cultural city.
In fact, Hong Kong society is now anxious to seek some new economic bright spots to enhance our competitiveness. Hence, the Financial Secretary should make more efforts to well utilize the existing $700 billion fiscal reserves to assist the development of new industries, particularly the cultural and creative industries which have enormous potential for development.
I would now like to turn to youth problems. As education can best promote the competitiveness of young people in Hong Kong, this year's Budget has proposed strengthening vocational education and training and setting Qualifications Framework standards, with a view to encouraging young people to join the retail and construction industries. While I find the relevant measures well-intentioned, I consider it inappropriate to lay the emphasis on assisting young people to join the workforce. The Budget has neglected the fact that nearly 25 000 associate degree graduates are eager to continue their studies or be admitted to formal universities. According to the target proposed in the Policy Address this year, from the 2015-2016 academic year and in the triennium that follows, the number of additional top-up places provided by publicly-funded universities for associate degree students will only be progressively increased to 1 000. It is expected that by 2018-2019, only 5 000 associate degree students can pursue degree programmes each year. When compared to the number of associate degree students, which now stands at 25 000 each year, this number is just a drop in the ocean.
Given the shortage of university places in Hong Kong, the number of young people enrolling in associate degree programmes is expected to be on the increase. If the Government really wants to help young people, will it be better to provide more top-up degree places for them than offering 130 000 vocational training places and advising young people to join the workforce at an earlier time?
Lastly, I would like to say a few words about the proposal of setting up a "Future Fund", put forward by the Financial Secretary in paragraph 143 of the Budget. This idea comes from Singapore's Temasek Sovereign Wealth Fund (SWF). As the saying goes, we should save for the rainy days. Although the Government's reserves have now reached $700 billion, no one can predict Hong Kong's future economic development or whether the coffers will face a deficit. 9844 LEGISLATIVE COUNCIL ─ 9 April 2014
This is why the Financial Secretary proposes that a portion of the Government's annual surplus be saved up for the purpose of saving for the future. I think this approach is basically in line with the principle of "keeping expenditure within the limits of revenues, striving to achieve a fiscal balance and avoiding deficits", as stated in Article 107 of the Basic Law.
Although I accept the concept of a "Future Fund", I am concerned about its use. According to the Budget, the "Future Fund" can be used to finance strategic infrastructure projects. I consider such usage questionable and worrying as the present construction costs have incurred huge overruns from time to time. For instance, the Hong Kong-Zhuhai-Macao Bridge, the Central-Wan Chai Bypass and the Liantang Boundary Control Point have cost overrun by $8.8 billion, $7.9 billion and $8.5 billion respectively. What is more, the Government has to allocate $10 billion to build a basement, and so on, for the West Kowloon Cultural District. Should the Government fail to control construction costs, reduce consultant fees, give up extravagant designs, and so on, I am worried that the "Future Fund" will only be reduced to a cash cow for contractors and will soon be depleted. Hence, I think that the "Future Fund" should be used not only for financing infrastructure projects, but also for spending on welfare, education, healthcare, the ageing population, and so on. The Government should first carry out proper consultation and allow the community to discuss the use of the "Future Fund" (The buzzer sounded) …
PRESIDENT (in Cantonese): Mr CHUNG, you speaking time is up.
MR CHRISTOPHER CHUNG (in Cantonese): Thank you, President.
MR TONY TSE (in Cantonese): President, competitiveness is the theme of this year's Budget. In the introduction to the Budget, the Financial Secretary has expressed his hope of enhancing Hong Kong's competitiveness to help keep Hong Kong economy growing, improve our business environment, increase employment opportunities, and enable everyone in the community to realize their potential, live a better life and pursue their aspirations. I believe no one will object to such a beautiful vision, but in order to turn it into reality, the Government must have an insight and mindset for overall long-term planning for development on various fronts, including land, housing, population, education, LEGISLATIVE COUNCIL ─ 9 April 2014 9845 economy, industries, and so on. In particular, given the Government's prediction that manpower, land supply and an ageing population are the major constraints for Hong Kong's future development, a comprehensive long-term planning and development strategy has become all the more important. Apart from capitalizing on each and every opportunity to promote the continued development of the free economy, the Government should also actively seek a breakthrough amid constraints on the three fronts, namely manpower, land supply and an ageing population, so to enable us to cope with future challenges and ensure that our next generation can have a more stable foundation for development.
President, comprehensive and sustainable planning, adequate finances and appropriate human resources are essential conditions for enhancing Hong Kong's competitiveness. To keep Hong Kong's economy growing is the key to maintaining stable financial resources to meet the huge public expenditure of the Hong Kong Government, otherwise a structural fiscal deficit may surface. Hence, an excellent, highly transparent and highly efficient free business environment is most vital to enhancing Hong Kong's competitiveness and enabling our economy to sustain a healthy and steady growth. Any policies and measures that impose unnecessary constraints on the traditional free economy should be avoided by all means. Even the exceptional measures taken in extraordinary times should be scrapped expeditiously in due course. This, coupled with our fine tradition of the rule of the law, a level-playing field, a highly efficient civil service team, a simple and low tax regime, can ensure the continued success of the market economy.
The Financial Secretary has also mentioned in the Budget that our well-established trading and logistics industry, financial services industry, tourism industry and professional services have been showcasing Hong Kong to the international community, and in the foreseeable future, there is still ample room for these industries to flourish. This I agree. But how can the relevant development opportunities be capitalized on? With regard to professional services, I have recently raised some questions to the Government because I consider that the ratio of Hong Kong professionals registering and practicing in the Mainland and operating companies in the Mainland through the arrangement of mutual recognition of qualifications between Hong Kong and the Mainland, and the "early and pilot implementation" under CEPA is still at a relatively low level, and there is enormous room for growth. Hence, the Government should explore how to enhance the work in these areas to encourage and assist local professionals and enterprises to tap into the Mainland market. Meanwhile, I also 9846 LEGISLATIVE COUNCIL ─ 9 April 2014 propose that the Government should allocate additional resources and strengthen the role played by offices set up by the SAR Government in various places on the Mainland to take the initiative to provide more relevant information to Hong Kong enterprises and Hong Kong-invested enterprises on the Mainland to help them seek business opportunities on the Mainland, or even tap on markets in other neighbouring countries or cities, or in ASEAN countries, and so on, with a view to further expanding the coverage of Hong Kong's professional services network.
The Budget has also mentioned that Hong Kong enjoys exceptional advantages with a complementary mix of talented people and efficient infrastructure, as well as well-developed international and domestic transport networks. As a result, Hong Kong will continue to thrive as an international hub, a focal point for multinational enterprises. Such international recognition and acclaim do not come easy. But, as our competitors are also striving for excellence, we have to work harder to stay ahead. Hence, it is imperative for us to construct a third airport runway expeditiously to promote Hong Kong's long-term economic development and enhance its competitiveness. Furthermore, upon the commissioning of the Hong Kong-Zhuhai-Macao Bridge (HZMB) in 2016, people flows and logistics connectivity between Hong Kong and the Pearl River Delta (PRD) Region will be strengthened. Hence, how we can grasp the relevant opportunities to promote Hong Kong's business development is most vital. In the past, the efforts made by Hong Kong on this front were obviously inadequate and too slow. Now, we are still discussing the planning, engineering and architectural study for topside reclamation development at Hong Kong boundary crossing facilities island of the HZMB. When will the plan be put into implementation eventually? For the time being, there are still a lot of uncertainties. This reflects that the Government lacks overall planning with respect to the development project of the HZMB.
Meanwhile, the Government has now proposed a grant of 227 million or so to conduct strategic studies for artificial islands in the central waters and relevant site investigation projects. However, many friends of mine in the trade and I are concerned that, insofar as the construction of artificial islands is concerned, the Government has merely focused on engineering feasibility studies. Has the Government considered and studied in depth the role and function of the artificial islands and how they complement the development of the PRD Region, the quality of the future living environment of the residents, and so on? Has the Government conducted detailed strategic planning for the artificial islands on this LEGISLATIVE COUNCIL ─ 9 April 2014 9847 basis? Hence, without the basis of overall planning, I really cannot understand on what basis will the Government undertake the engineering feasibility studies? I hope that the Government, being responsible, would think twice about the relevant issues to avoid wasting money on public works, and conduct engineering feasibility studies on these projects before its overall planning strategies and plans are put into implementation.
President, industrial development is crucial to sustained economic growth. In recent years, quite a number of countries and regions have invested substantially in the development of innovation and technology industries. In Hong Kong, however, our innovation and technology development has apparently lagged behind that of our neighbouring countries and regions. Two years ago, due to the failure of launching the restructuring plan, the Government failed to set up an Innovation and Technology Bureau. The Chief Executive has stated in the Policy Address this year that efforts to reactivate the establishment of an Innovation and Technology Bureau will be made. The Government has also tabled documents on the relevant proposal today. I hope the Government can expedite its effort in this area to formulate appropriate policies and measures and provide favourable conditions for the development of the relevant industries. Otherwise, even if Hong Kong has more technology talents, they will only be forced to go to other countries or regions to pursue development. In the end, Hong Kong will suffer.
Furthermore, the Budget has also mentioned that Hong Kong's total research and development (R&D) expenditure in 2012 amounted to around $15 billion, of which more than half came from the public sector. For this reason, I agree that the provision of proper financial support for local universities, R&D organizations and enterprises to enable the commercialization of their R&D results for release to the market is of crucial importance to promoting innovation and technology development. In particular, efforts must be made to accelerate technology transfer of upstream R&D results to translate more innovations into commercialized midstream and downstream R&D products or services. I hope the Government can play a more proactive role in this area to, apart from examining the results of various related policies and measures, strengthen assistance for various R&D projects, assist universities in converging with R&D results and markets, and enhance the application and commercialization of R&D results.
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President, an ageing population is one of the key factors constraining Hong Kong's future development. An ageing society is also a major challenge to Hong Kong and quite a number of countries and regions. The Government must make proper preparations at an early stage, and the housing problem faced by the elderly has become all the more urgent. At present, the number of elderly people waiting under the Senior Citizen Residence Scheme launched by Hong Kong Housing Society is far greater than the number of people admitted. Moreover, they have to wait for a relatively long period of time before they can be allocated a unit. For these reasons, I hope the Government can allocate more resources targeting elderly people in different strata and with different needs and provide them with proper elderly and housing services as well as related services.
In recent years, there have been more discussions on issues such as retirement age and manpower resources of retirees. Last week, the Government also consulted the public on the extension of years of service for civil servants. As the saying goes, "every crisis is an opportunity". Although ageing pose a number of challenges to Hong Kong society, it will also bring a lot of new opportunities arising from the "silver hair" market. Has the Government considered allocating resources in this area and formulated policies to complement the development of the "silver hair" market to bring fresh economic impetus to Hong Kong? I hope that the Government can, apart from allocating resources, formulate supporting policies to encourage the participation of more private organizations to provide the elderly with more adequate facilities and services, develop the "silver hair" market in a systematic manner, and at the same time, ease the pressure of public resources on the Government.
President, population policy and economic development ought to be interactive. Hong Kong has always ranked among the top as a free economy in the international community. In the past, quite a number of overseas enterprises and talented people were eager to come to Hong Kong to pursue development. In recent years, however, Hong Kong appears to have gradually adopted a closed-door policy. For instance, some people have recently been unfriendly to Mainland visitors and expressed hopes that restrictions be imposed on these visitors. Some people cannot help but question if such acts run contrary to the principle of a free economy. I think the Government should take extra care in dealing with the relevant issues.
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Furthermore, the increase in the number of infrastructure projects and property developments in recent years has exerted tremendous pressure on the construction industry, with certain types of work experiencing manpower shortage problems. Even with enhanced training, it is still difficult for the manpower in the relevant sector to be replenished in the short run. Hence, I think short-term measures should be adopted to suitably import workers to cope with the urgent problems faced by the local construction industry. Meanwhile, some local workers can thus be released to participate in the training of newcomers. This will have a positive impact on the long-term development of the industry. Furthermore, I welcome the Budget's proposal of creating 2 500-odd civil service posts in 2014-2015, with nearly 10% of these posts being responsible for land development. This will ease the tremendous pressure faced by civil servants owing to a large number of development projects and prevent their morale from being hit.
On traffic and transport, the Government has stated unequivocally that it will continue to develop a transport system with railways as the backbone. I hope the Government would consider if it has put the cart before the horse in promoting railway development in recent years, for railways should be regarded as ancillary facilities for district development but not vice versa.
With these remarks, President, I support the Appropriation Bill 2014.
MR IP KWOK-HIM (in Cantonese): President, this is the seventh Budget delivered by the Financial Secretary. Before announcing this Budget, the Financial Secretary already hinted that no "big candies" would be handed out this year to prevent people from having too high an expectation on the Budget. Certainly, as expected, even relief measures for the grassroots, not to mention the middle class, are limited. It is inevitable that people feel disappointed with the Budget and the Financial Secretary. But to be realistic, Hong Kong is facing an ageing population and a shrinking labour force, a slowing down in economic growth and increased expenditure. Moreover, government expenditure has continued to outpace revenue growth. It is indeed worthy to examine whether the Government should continue to be "spendthrift". Certainly, some people might think that the Financial Secretary is just "crying wolf" in predicting a deficit in his financial forecast, and the Government's resources, that is money, should be spent on the needy. Frankly speaking, being a treasurer for the SAR 9850 LEGISLATIVE COUNCIL ─ 9 April 2014
Government, the Financial Secretary should and must have a sense of crisis when it comes to financial management. Otherwise, a structural deficit will eventually emerge and society as a whole will have to bear the consequences. This is why we must think twice about this matter.
President, I will express the views of the Democratic Alliance for the Betterment and Progress of Hong Kong (DAB) on the political system, security affairs and the operation of District Councils (DCs).
In this year's Budget, the Government will allocate $12 million for the two major elections to be held in 2016 and 2017. Apart from for the 100-plus events organized in relation to constitutional reform, as mentioned by Secretary Raymond TAM, the DAB will also hold seminars on constitutional reform in the 18 districts to explain to the public the requirements of the Basic Law in relation to the implementation of universal suffrage for the election of the Chief Executive and the sincerity of the Central Authorities in implementing universal suffrage. In almost every seminar, we Members and colleagues from the DAB could hear voices of people expressing earnest hope for electing the Chief Executive by universal suffrage on a "one person, one vote" basis.
Listening to views and holding discussions are pragmatic ways to promote the implementation of universal suffrage for the election of the Chief Executive. However, the discussions must be based on the Basic Law and the decisions of the Standing Committee of the National People's Congress (NPCSC). With regard to the efforts of promoting the implementation of universal suffrage for constitutional reform in a holistic manner, we will find that there is still a lack of correct understanding of the contents of the Basic Law. As a result, we still have to spend a lot of time discussing proposals not in line with the Basic Law. In fact, during the drafting of the Basic Law years ago, methods relating to the nomination of Chief Executive candidates were already consulted extensively and discussed by the Basic Law Drafting Committee (BLDC) a number of times. Some BLDC members, including Mr TAM Yiu-chung, who is sitting beside me, are present in this Chamber too. In the end, the BLDC specifically turned down individual nomination by the public or individual members and accept nominations by nominating groups or committees. However, the SAR Government has not provided the public with documents containing specific information on this discussion process. In retrospect, are such extensive publicity and education efforts still inadequate? As a result, we have seen the LEGISLATIVE COUNCIL ─ 9 April 2014 9851 emergence of constitutional reform proposals not in line with the Basic Law, such as "public nomination" or "political party nomination", in the community and there are groups which persistently advocate such ideas. We are concerned that if discussions running contrary to the Basic Law are allowed to continue, we will indeed let the public down by going farther and farther away from the step to the implementation of universal suffrage for the election of the Chief Executive.
In order to promote constitutional reform consultation smoothly, it is important to have a correct understanding of the roles of the NPCSC and the Basic Law. As I mentioned in the Finance Committee meeting held a week ago, the Government's previous efforts in promoting the Basic Law had overlooked the promotion, publicity and explanation of the constitutional status of the NPCSC and the constitutional effect of the explanations and decisions made by the NPCSC. For these reasons, I hope the $16 million provision made by the SAR Government for promoting the Basic Law will pay attention to promoting the essence of "one country" while giving emphasis to promoting "two systems".
Young people are required to sustain Hong Kong's development. In recent years, we have heard voices expressed by quite a number of youth groups and organizations on constitutional development or social policies. While this is a good thing, I have also noticed that quite a number of young people do not have a comprehensive understanding of the drafting process of the Basic Law, the meaning of "one country, two systems", and the constitutional role played by the NPC or the Central Government. For these reasons, I think that the SAR Government should broaden its contact with youth groups and young people in different strata. Advisory committees under Policy Bureaux should also recruit more young people to deliberate on political affairs, enhance their understanding of Hong Kong's political system and policies, and make them understand the importance of listening to others' views during the formulation of policies. I also hope that District Officers can co-ordinate districts to organize more workshops for young people and take on board their views on administration.
The emergence of "Hong Kong belongers" in Hong Kong society in recent year to participate in "anti-locust" and "wheeled suitcase" protests to harass and insult Mainland visitors has reflected the worsening problems. Such actions have not only tarnished Hong Kong's hard-earned reputation of being a "shopping paradise", but also hurt the feelings of people of the two places.
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It is unreasonable and irrational for these people to blame Mainland visitors for various pressures in life, resulting from Hong Kong's failure to receive an enormous flow of visitors in recent years. To address the problem at root, a multi-pronged approach can be taken, including the proposal put forward by Dr York CHOW, Chairperson of the Equal Opportunities Commission, earlier to study the proposed amendment of including "discrimination against person of the same race" in the Race Discrimination Ordinance. These views warrant Members' consideration. Furthermore, it is very important to enhance the knowledge and understanding of people of the two places. I am aware of the great efforts made by the SAR Government through the five liaison offices on the Mainland to demonstrate to Mainland people Hong Kong's positive image and disseminate positive messages of mutual understanding and respect. In fact, such efforts should be changed from being Mainland-oriented to Hong Kong people-oriented. Efforts should be made to explain to Hong Kong people the importance of exchanges between the two places, and make them understand and accept the cultural differences between the two places.
The increasing number of visitors to Hong Kong has not only affected the livelihood of the people, but also exerted pressure on the work of the Immigration Department (ImmD). Likewise, proactive measures should be adopted to resolve the problems, including expanding our receiving capacity, providing shopping centres at the boundary, examining the feasibility of the co-location arrangement to facilitate immigration clearance for travellers on the one hand, and relieve pressure on the manpower of the ImmD on the other, lowering the visitor carrying capacity in urban areas, as well as implementing a pilot scheme for the co-location arrangement.
While we give a helping hand to hard-working young people, we should also care for young people neglected by their families and the community. According to the latest statistics provided by the Narcotics Division, the total number of reported drug abusers has continued to fall. Although the fall in the number of young people under the age of 21 has reached 27%, which is relatively large, the hidden drug abuse problem is worsening, and half of the drug abusers reported for the first time have abused drugs for more than 4.6 years, or close to five years, which is longer than 4.1 years recorded in the year 2012. For these reasons, the Government must allocate more resources to address the worsening hidden drug abuse problem, expedite the implementation of the Rescue Drug Testing Scheme and enhance measures to encourage drug abusers to seek help as LEGISLATIVE COUNCIL ─ 9 April 2014 9853 soon as possible. Furthermore, the number of places for various types of addiction counselling, treatment, rehabilitation, hospitalization, and so on, has to be increased.
Next, I will express my views on the problems faced by DCs.
It is proposed in this year's Policy Address that a pilot scheme will be introduced in two DCs, with Sham Shui Po being one of them, to provide the District Management Committees chaired by District Officers with the decision-making power to tackle the management and environmental hygiene problems of some public areas. The DCs will advise on the work priorities. I believe the effective operation of DCs will have a decisive impact on the smooth implementation and efficient operation of the scheme, and the effective operation of DCs are closely related to the Secretariats of DCs. Certainly, their ties are inseparable. In this year's Budget, $10 million has been earmarked for the implementation of the scheme, providing expenses for, among others, recruiting additional non-contract staff members when necessary to assist with the scheme. As the saying goes, "Before the marching of the three armed services, food and provision should move first". Adequate resources must be provided so that the scheme can get twice the result with half the effort.
Nevertheless, the long-standing problem of serious manpower shortage faced by DC Secretariats has been discussed for a long time. At present, there are about 21 staff members providing services in a DC Secretariat, and each clerk in the DC Secretariat is responsible for at least one committee and three subcommittees on average. Besides, there is plenty of overwhelming administrative and clerical work which needs to be followed up. Focusing on the needs of the community and in response to public demands, the Government has provided additional resources for district activities. In addition, this year's Policy Address has proposed an additional grant of $100 million for signature projects, the implementation of which will definitely lead to increase in the workload of the Secretariats, which can be imagined. Although the 18 District Offices across the territory have recruited 29 additional staff to provide support having regard to the signature projects, the situation can still be described as "having 10 tea pots but only nine lids". Let me quote the words of President XI Jinping, "There is no such thing as the best; the best should strive to be better". Even with additional manpower, the Secretariats still have room for improvement insofar as resources are concerned. The DAB has all along urged the 9854 LEGISLATIVE COUNCIL ─ 9 April 2014
Government to provide additional funding for recruiting more staff, with a view to improving and upgrading the work of DC Secretariats.
President, according to my years of working experience in the district, I have observed that the quality of building management is indeed very important, given that most of the buildings in my constituency are private buildings. In this year's Budget, a grant of $21 million has been earmarked for the launch of the "AP Easy" Building Maintenance Advisory Service Scheme on a trial basis for the provision of free and tailor-made professional advice and support. This is definitely an extremely beneficent measure. I hope the Government can provide more support for private buildings, including those with "three nos", so as to give all private buildings in the territory better support to improve or upgrade their environment. Thank you, President.
MR KENNETH LEUNG (in Cantonese): I wish to speak on six aspects of the Budget.
First, I would like to talk about long-term fiscal planning. In this year's Budget, the study of the Working Group on Long-Term Fiscal Planning (Working Group) is cited. According to the projection of the Working Group, one of scenarios is that a structural deficit would surface in seven years the soonest and our fiscal reserves would be depleted if government expenditure grows at approximately 3% per annum as in the past for service enhancement, thereby resulting in a significant increase in government expenditure. Certainly, these services cover three major areas of government services including healthcare, education and social welfare. Also, our fiscal reserves would be exhausted in 2028 the soonest. This is certainly one of the possible scenarios which may not necessarily occur. But this is a warning with regard to government expenditure.
Issues such as whether we should adhere to fiscal prudence and how public money should be expended have been discussed for many years since the establishment of the SAR Government. I believe principles such as exercising stringent control on expenditure growth and keeping expenditure within the limits of revenues had been raised from time to time by the former Financial Secretary and even his predecessors.
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However, in recent years, the Government's surplus has reached tens of billions of dollars every year. By the end of March 2014, the Government's reserves have risen to $745.9 billion. The role played by the Financial Secretary is not simply a treasurer or a company's financial controller. In fact, apart from controlling the operating costs of the SAR Government as a whole, he should pay greater regard to or properly address the problem of how to conduct more long-term planning for Hong Kong by making use of the existing reserves of Hong Kong.
There is a major core issue which none of the Financial Secretaries in the past had explained clearly to the public or Legislative Council Members whether recurrent expenditure should be increased or investment in social infrastructure should be substantially increased in order to ensure a long-term and sustainable growth of our economy and social structure. For this problem, we have never heard of any proper answer or seen any study conducted by the Government.
Meanwhile, I can also see that Hong Kong will encounter many challenges ahead, such as an ageing population and a declining workforce starting from 2018 as mentioned in the Budget. Precisely because of these possible scenarios in the future, a long-term and forward-looking strategy is all the more essential to meet the needs. Unfortunately, the Budget has not mentioned how to cope with an ageing population and a dwindling workforce.
The second issue I wish to discuss is the tax base. This is not the first time I discuss the problem. Instead, I have raised the problem in different capacity for many years. The narrow tax base of Hong Kong is most obvious. Among the 3.6 million working population, 2 million of them (or 55% of the working population) are not subject to salaries tax. All direct taxes including profits tax, salaries tax, stamp duty and land revenue account for about 65% of total government revenue in 2013-2014. These direct taxes are easily affected by the fluctuation of an economic cycle. In the event of an economic downturn, the Government's revenues will inevitably decrease substantially.
It is easier said than done. If you really want to broaden the tax base, it is necessary to forge a broad consensus in society. Many Honourable colleagues in this Council tend to think that broadening the tax base would mean raising taxes. President, in fact it is not the case. Broadening the tax base can be tantamount to reducing taxes. After the tax base has been widened, the tax paid by a person may be reduced because of an increase in the number of taxpayers.
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In the Budget, the difficulty in introducing new taxes is also mentioned. As pointed out in paragraph 140 of the Budget: "it will be controversial to propose any new taxes, which need thorough consideration and public discussion." From past experiences, the proposed introduction of the goods and services tax in 2004 had encountered a lot of obstacles. However, we should not give up because of difficulties. Now that our financial position is relatively healthy, why does the Government not start considering how to broaden the tax base?
As I mentioned two months ago, a possible direction is to study the possibility of imposing the entry tax on visitors. Given that the average number of visitors in the past five years is around 42 million, if an entry tax at $50 is imposed, the Government can have an extra revenue of $2.1 billion per annum. In theory, the imposition of a small amount of entry tax on visitors is less controversial because it would not affect Hong Kong residents and it is easier to forge a consensus in society. If the Government does not have the courage to do so, our tax base will still remain narrow even though we discuss the issue for another 10 years or 20 years. Therefore, the Financial Secretary should seriously consider whether it is now the right time to study broadening the tax base.
President, the third area I wish to discuss is the "Future Fund". In the past couple of weeks, many Honourable colleagues have discussed the purpose of the "Future Fund", its functions, and whether it will be used for providing universal retirement protection. But the answers we have obtained are very vague. To date, the Government has not provided us any written document on the purpose of the "Future Fund". There are doubts whether the purpose of setting up of the "Future Fund" is to delay the handling of some long-term social structural problems. Is this a multi-purpose Fund so that funding will be drawn from it for the construction of infrastructure or the implementation of projects that need capital? What is the ultimate purpose of the Fund? I hope the Financial Secretary can provide a more detailed document on the purpose of the "Future Fund".
Apart from the "Future Fund", another point I wish to make is that our economy and industries are homogenous and we should consider how industries can be diversified. This issue has also been discussed for many years. According to the current mindset of the SAR Government, whenever Hong LEGISLATIVE COUNCIL ─ 9 April 2014 9857
Kong's competitiveness is mentioned, it will repeat time and again the rankings of Hong Kong in various fronts, and the four pillar industries' contributions to Hong Kong. We do not mean to deny the contributions of the four pillar industries to Hong Kong, but the four pillar industries have a long history. Should we examine if there are any other new economic activities or opportunities which will invigorate our economy, thereby facilitating the upward mobility of young people?
In the motion debate "Encouraging the return of the industrial sector for development" on 19 March, I suggested that the Government should be selective about the types of industries. It should encourage the return of industries with emphasis on research and development, high value-added, low pollution and lower requirement for site area, as well as industries which can attract talents and foreign investment. In the debate, I had cited two examples ― these are just examples and I do not mean the two examples represent the whole sector ― namely pharmaceutical production and certification as well as high-end fashion design and manufacturing. I mean high-end products, not the garment industry.
Let us look at Singapore. Many Honourable colleagues have mentioned Singapore today. But I am not going to talk about other aspects such as reclamation or importation of workers by Singapore. I just want to talk about its achievements in pharmaceutical and biotechnology industries in the past decade. During the period from 2000 to 2008, the FDI in pharmaceutical and biotechnology industries has increased from SGD$3.8 billion to $10.6 billion, which is not a small amount.
After talking about the homogeneous structure of our industries, I would like to talk about the middle class and small and medium enterprises (SMEs). I believe we all think that the middle class have paid large amounts of tax but enjoyed few welfare benefits. Perhaps they do not need any benefits at all. They just need a level playing field which can bring their talents into play. If there is such a benevolent policy, both the middle class and SMEs will feel satisfied. But unfortunately, owing to the rising operating costs and skyrocketing rents, SMEs or middle class have become "snails without shells". The SMEs cannot rent shops (particularly street level shops) to run their business, while the middle class is unable to acquire their own flats.
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Before the announcement of this year's Budget, I had submitted several suggestions to the Financial Secretary, such as a lower profits tax rate for SMEs when the turnover is less than $25 million. Certainly, I have heard some counter-proposal, claiming that given the small amount of tax paid by the middle class, even if the tax rate is set as 10%, they will not be much benefited. However, President, this is not a question of the actual benefit. Rather, if there is such a policy, the public will see that the Government is really concerned about the business environment and the future of SMEs rather than ignoring them.
I have also suggested that the expenditure on research and development should be entitled to a 150% super deduction. As for personal taxation, I also hope that the current tax band of salaries tax can be increased from $40,000 to $60,000. When it comes to child allowance, it certainly involves the long-term population policy which has been the subject of our discussion. If we want to encourage childbearing, it cannot be achieved simply by raising the deductible allowance. Other social policies and complementary measures, such as education and housing, are also needed. I have discussed the issue with many friends from the middle class. They consider these two factors are in fact their major concerns. Owing to their doubts and worries, they have no confidence to raise children. The child allowance, as a tax policy, is in fact far from adequate. I hope the Financial Secretary will consider raising the child allowance to $120,000 (for each dependent) in the next financial year. Certainly, under the policies of some countries, local parents will receive cash subsidy on top of tax deductible allowance if they have newborn babies. A lot of expenses will be incurred in connection with the birth of a child, such as expenses on powdered formula, diapers, and so on, apart from the need to procure many other necessities. So, in addition to raising the tax deductible allowance, I fully support the provision of cash allowance to taxpayers who have newborn children during the relevant financial year.
Finally, President, I wish to talk about the role of the Legislative Council in monitoring the Government. According to the Public Finance Ordinance (Cap. 2), the Financial Secretary shall prepare in each financial year estimates of the revenue and expenditure of the Government for the next following financial year. According to Article 73 of the Basic Law, the Legislative Council shall examine and approve budgets introduced by the Government, as well as approve taxation and public expenditure. In addition to the aforesaid responsibilities, the Legislative Council has the constitutional status in monitoring public expenditure. LEGISLATIVE COUNCIL ─ 9 April 2014 9859
However, when our Honourable colleagues raise questions about the expenditure of various government departments, they often encounter many difficulties and cannot obtain the required information. Certainly, the questions must be related to the budgets. This is the first condition. But very often, the government departments do not disclose the relevant information to us in an open manner. For instance, when we raise questions about the law-enforcement agencies (particularly the Security Bureau), the reply or even the excuse is that such information is related to the deployment details of the disciplined forces and cannot be disclosed. This is the standard answer of the authorities. But the authorities have not explained why information relating to deployment or involving classified information cannot be disclosed. Even expenditure on the procurement of pepper spray cannot be disclosed. The examples cited by me are just the tip of the iceberg. In fact, examples of this abound. If the authorities keep on replying Members' questions on expenditure in such a manner, the Legislative Council simply cannot play the role in monitoring the Government.
Finally, I hope the Financial Secretary will, in the days to come, give us a more specific proposal on how to monitor the financial expenditure, increase revenues and reduce expenditures in order to ensure a healthy and sustainable financial position of the SAR Government (The buzzer sounded) … and avoid the depletion of reserves in seven years. Thank you, President.
PRESIDENT (in Cantonese): Mr LEUNG, time is up.
SUSPENSION OF MEETING
PRESIDENT (in Cantonese): There are no Members in the Chamber who have not spoken. I now suspend the meeting until 9 am tomorrow.
Suspended accordingly at half past Nine o'clock.