LEGISLATIVE COUNCIL ─ 13 April 2016 7065

OFFICIAL RECORD OF PROCEEDINGS

Wednesday, 13 April 2016

The Council met at Eleven o'clock

MEMBERS PRESENT:

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

THE HONOURABLE ALBERT HO CHUN-YAN

THE HONOURABLE LEE CHEUK-YAN

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

THE HONOURABLE LEUNG YIU-CHUNG

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 YU-YAN, G.B.S., J.P.

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

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

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

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

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

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

THE HONOURABLE CYD HO SAU-LAN, J.P.

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, S.B.S.

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

THE HONOURABLE MRS 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

THE HONOURABLE WONG YUK-MAN

THE HONOURABLE CLAUDIA MO

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

LEGISLATIVE COUNCIL ─ 13 April 2016 7067

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

THE HONOURABLE STEVEN HO CHUN-YIN, B.B.S.

THE HONOURABLE FRANKIE YICK CHI-MING, J.P.

THE HONOURABLE WU CHI-WAI, M.H.

THE HONOURABLE YIU SI-WING, B.B.S.

THE HONOURABLE GARY FAN KWOK-WAI

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

THE HONOURABLE CHARLES PETER MOK, J.P.

THE HONOURABLE CHAN CHI-CHUEN

THE HONOURABLE CHAN HAN-PAN, J.P.

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, B.B.S., J.P.

DR THE HONOURABLE KWOK KA-KI

THE HONOURABLE DENNIS KWOK

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

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

DR THE HONOURABLE HELENA WONG PIK-WAN

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THE HONOURABLE IP KIN-YUEN

THE HONOURABLE CHEUNG-KONG, S.B.S., J.P.

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

THE HONOURABLE TANG KA-PIU, J.P.

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

IR DR THE HONOURABLE LO WAI-KWOK, S.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, B.B.S.

THE HONOURABLE ALVIN YEUNG NGOK-KIU

MEMBERS ABSENT:

THE HONOURABLE JAMES TO KUN-SUN

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

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

THE HONOURABLE LEUNG KWOK-HUNG

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

THE HONOURABLE KWOK WAI-KEUNG

DR THE HONOURABLE FERNANDO CHEUNG CHIU-HUNG

DR THE HONOURABLE ELIZABETH QUAT, J.P.

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PUBLIC OFFICERS ATTENDING:

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

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

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

MS CHRISTINE LOH KUNG-WAI, J.P. SECRETARY FOR THE ENVIRONMENT

THE HONOURABLE LAU KONG-WAH, J.P. SECRETARY FOR HOME AFFAIRS

THE HONOURABLE CLEMENT CHEUNG WAN-CHING, J.P. SECRETARY FOR THE CIVIL SERVICE

CLERKS IN ATTENDANCE:

MR KENNETH CHEN WEI-ON, S.B.S., SECRETARY GENERAL

MISS ODELIA LEUNG HING-YEE, DEPUTY SECRETARY GENERAL

MS DORA WAI, ASSISTANT SECRETARY GENERAL

MR MATTHEW LOO, ASSISTANT SECRETARY GENERAL

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PRESIDENT (in ): Will the Clerk please ring the bell to summon Members to the Chamber.

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

TABLING OF PAPERS

The following papers were laid on the table under Rule 21(2) of the Rules of Procedure:

No. 79 ─ Rotary Club Students' Loan Fund Financial Statements for the year ended 31 August 2015

No. 80 ─ Sing Tao Charitable Foundation Students' Loan Fund Financial Statements for the year ended 31 August 2015

No. 81 ─ Self-financing Post-secondary Education Fund Financial statements for the year ended 31 August 2015

No. 82 ─ HKSAR Government Scholarship Fund Financial statements for the year ended 31 August 2015

Report No. 16/15-16 of the House Committee on Consideration of Subsidiary Legislation and Other Instruments

WRITTEN ANSWERS TO QUESTIONS

Car-parking Facilities Under Link Real Estate Investment Trust

1. MR ALAN LEONG (in Chinese): President, in 2005, the Hong Kong Housing Authority divested certain retail and car-parking facilities of its public housing estates to The Link Real Estate Investment Trust, which was renamed as Link Real Estate Investment Trust (Link REIT) in August 2015. It has been learnt that the land leases for the car parks of Link REIT generally provide that the parking spaces may be let only to the residents, occupiers and their bona fide visitors specified therein. However, Link REIT may apply to the (LandsD) for waivers of the relevant lease conditions so as to let LEGISLATIVE COUNCIL ─ 13 April 2016 7071 some of the parking spaces to non-residents, and in doing so, it has to pay waiver fees as well as comply with the terms and conditions set out by LandsD in the waivers. Some members of the public have relayed to me that in recent years, Link REIT has increased the proportion of 12-hour and 24-hour parking spaces for letting to non-residents. As the monthly parking spaces of some of its car parks are often fully taken up and there are often a number of prestigious sedans parked there, those members of the public suspect that some tenants of the shopping malls have assisted, for profits, non-residents in renting the monthly parking spaces. In this connection, will the Government inform this Council:

(1) whether it knows the respective current numbers of monthly and hourly parking spaces in the car parks under Link REIT, and the respective percentages of such numbers in the total number of its parking spaces, with a breakdown by name of car park; whether the Government has monitored if such numbers and percentages from 2005 onwards have complied with the relevant land lease conditions;

(2) whether it knows the current total number of parking spaces in the car parks under Link REIT which are for letting to non-residents; among such parking spaces, of the respective numbers of those which are let hourly, monthly or by other means (if any), with a breakdown by name of car park; whether the Government has monitored if such numbers and the percentages of such numbers in the total numbers of the relevant parking spaces from 2005 onwards have complied with the relevant land lease conditions;

(3) of the existing mechanism put in place by the Government to monitor and investigate whether Link REIT has complied with the requirement that the parking spaces of its car parks may be let only to the residents, occupiers and their bona fide visitors as specified in the land leases; and

(4) of the number of applications made by Link REIT to LandsD each year since 2005 for waivers of the relevant lease conditions so as to let its parking spaces to non-residents, and the annual total amount of wavier fees paid by Link REIT?

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SECRETARY FOR TRANSPORT AND HOUSING (in Chinese): President, to enable the Hong Kong Housing Authority (HA) to focus its efforts in fulfilling its mission to provide subsidized public housing, and to improve the HA's financial position in the short- to medium-term with proceeds from the divestment of facilities, the HA divested 180 properties, including car-parking facilities, through The Link Real Estate Investment Trust (now known as Link REIT) in 2005. Link REIT has been a private entity since its listing in 2005. The Government and HA do not hold any units of Link REIT. The business direction and day-to-day operation of Link REIT are entirely independent of the Government and HA.

Having consolidated inputs from the and the Lands Department (LandsD), my consolidated reply to Mr Alan LEONG's question is as follows:

As with all private owners, so long as its operations comply with the legislation and land lease conditions, the Government and HA have no right to interfere with the commercial decisions of Link REIT. According to information provided by the LandsD, land leases granted by the Government to HA, with the commercial facilities and car parks subsequently divested by the HA to Link REIT, contain restrictions on the number of parking spaces to be provided and the types of vehicles to be parked in the relevant lots. Generally speaking, land leases contain provisions stipulating that the parking spaces shall only be used for the parking of vehicles of the residents and visitors of the lots in question. Individual land leases may also stipulate that some of the parking spaces shall be provided for the parking of vehicles of the residents or visitors of other specified lots to cater for local residents' needs for car-parking. Nevertheless, land leases generally do not restrict the mode of operation of the car parks, such as letting of the parking spaces on an hourly or monthly basis. Neither the Government nor HA has obtained or kept information on the number of monthly and hourly parking spaces under Link REIT. In light of the question from Member, we have checked public documents published in the website of Link REIT but there is no such information.

Due to time constraints, the LandsD is unable to examine the 180 land leases of all the commercial and car-parking facilities divested by the HA to Link REIT in 2005 to find out the total number of parking spaces in car parks under Link REIT which can be used to park vehicles belonging to non-residents of the respective estates. However, detailed provisions of the land leases of the estates or courts concerned can be obtained by land searches at the Land Registry.

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As for monitoring whether the lessees (including Link REIT) complies with the lease conditions on the provision of parking spaces, given the huge number of private land leases and considering constraints in manpower resources, it is neither possible nor cost-effective for the LandsD and its District Lands Offices to conduct regular inspections of all private land. Therefore, the LandsD mainly acts on complaints, referrals or enquiries, and where necessary, inspects black spots with frequent breaches of leases. Managers of the Deed of Mutual Covenant (DMC) are tasked to enforce provisions under the DMC, which include compliance with land lease conditions.

Since the divestment of the car parks to Link REIT in 2005, if Link REIT, as the owner of those car parks, finds it necessary to deviate from provisions of the land leases and let its car-parking spaces to non-residents, or to convert the use of some of its surplus car-parking spaces for parking other types of vehicles, it can apply to the (TPB) for planning permissions and the LandsD for temporary waivers to vary the lease provisions concerned respectively, in accordance with the prevailing legislation and relevant procedures. According to information provided by the LandsD, Link REIT has made a total of 122 applications for temporary waivers in relation to car parks, the bulk of which involve changing the numbers and types of parking spaces to be provided, and allowing some of the parking spaces to be used by non-residents of the respective estates or by those not specified in the land leases. Link REIT subsequently withdrew 21 of the applications. As at February 2016, the remaining 101 applications for temporary waivers had been approved by the LandsD to cater for the actual circumstances in order to make good use of the vacant parking spaces. The LandsD processed the waiver applications in accordance with the established procedures, which include consulting relevant government departments such as the District Offices concerned, Planning Department, Transport Department and . Among the 101 temporary waivers, 27 waivers allow the parking of vehicles of non-residents of the respective estates or vehicles of those persons not specified in the land leases on the surplus parking spaces. A total of 319 parking spaces (296 motor-cycle parking spaces, 22 goods vehicle parking spaces and one private car-parking space) were involved. The total sum of waiver fees paid by Link REIT in 2015 for these 27 temporary waivers (which involves the parking of vehicles belonging to non-residents of the respective estates) was about $4 million. The waiver fees include the fees payable to the Government for the relaxation of restrictions under 7074 LEGISLATIVE COUNCIL ─ 13 April 2016 these 27 waivers, that is, changes to the numbers and types of parking spaces and allowing non-residents of the respective estates or those not specified in the land leases to use the parking spaces. Due to time constraints, the LandsD is unable to provide a yearly breakdown of the number of temporary waivers granted in respect of car parks under Link REIT and the total amount of waiver fees since 2005.

Entry Requirements Imposed by Foreign Governments on Hong Kong Special Administrative Region Passport Holders

2. MR ANDREW LEUNG (in Chinese): President, since the 15th of last month, the Government of Canada has imposed a new stipulation requiring holders of passports exempted from the visa requirement (including Hong Kong Special Administrative Region (HKSAR) passport) to obtain an Electronic Travel Authorization (eTA) prior to check-in for flights to Canada. Regarding the entry requirements imposed by foreign governments on HKSAR passport holders, will the Government inform this Council:

(1) of the number of countries/territories, other than Canada, which have granted visa-free access to HKSAR passport holders but require the holders to obtain an eTA before entry;

(2) whether it has considered imposing the same entry requirement on holders of passports issued by those countries/territories in (1); if it has, of the details; if not, the reasons for that; and

(3) as it is stated on the web page of the Government of Canada that eTA is electronically linked to the passport of the person to whom eTA has been issued, and the Immigration Department has accepted applications for HKSAR ePassport from members of the public only since 5 February 2007, of the current number of HKSAR passports whose validity period has not expired and which are not e-Passports, as estimated by the authorities, and how the authorities will assist holders of those passports in applying for the eTA concerned?

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SECRETARY FOR SECURITY (in Chinese): President,

(1) A total of 156 countries or territories currently grant visa-free access or visa-on-arrival to HKSAR passport holders. Among them, only Canada requires HKSAR passport holders to obtain an Electronic Travel Authorization (eTA) prior to check-in for a flight. So far, the HKSAR Government has not received any official notice from other countries or territories of the same arrangement.

(2) The Immigration Department (ImmD) reviews its visa policy (including visa-free arrangement) from time to time and considers making adjustments or introducing new measures where necessary to ensure that, while facilitating travel convenience for genuine visitors, its visa policy is able to maintain effective immigration control. The HKSAR Government does not have any plan to implement pre-arrival registration in respect of the country mentioned in part (1) of the question (that is, Canada) at present.

(3) According to information provided by the Government of Canada, starting from 15 March 2016, visa-exempt foreign nationals (including holders of HKSAR passport) who fly to or transit through Canada by air, whether on the strength of an electronic passport (e-Passport) or a non-e-Passport, are required to obtain an eTA prior to check-in for a flight. The application procedures for both e-Passports and non-e-Passports are the same, while the entry requirements for other means of travel (by land or sea) remain unchanged. As at end of February 2016, there are about 340 000 unexpired HKSAR non-e-Passports. For the new arrangements for entry into and transit through Canada, the ImmD has uploaded relevant information onto its official website. In addition, through the Travel Industry Council and the Airline Operators Committee of the Hong Kong International Airport, the ImmD has notified travel agencies and airline companies of the new arrangements for entry into and transit through Canada. Members of the public may visit the website of the Government of Canada at for details on application for an eTA. In case of enquiry, members of the public are also advised to consult the Consulate General of Canada in Hong Kong before travelling.

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Promoting Reading Culture

3. MR MICHAEL TIEN (in Chinese): President, as revealed by the outcome of a survey conducted last year, only 5.7% of the children in Hong Kong read 10 books or more each month, and this figure was far below those of Japan and Taiwan, which stood at 38.3% and 30.3% respectively. Furthermore, a Research Brief published by the Legislative Council Secretariat early this year pointed out that usage of public library services had been falling over the last decade, e.g. the number of books on loan had fallen by 11%. There have been comments that given the growing prevalence of smart phones and rapid development of Internet platforms, and certain edges that such media have over the printed media in information dissemination (e.g. instantaneity, portability and interactivity), public library services are facing immense challenges and the reading culture is on the wane. In view of this situation, quite a number of countries and territories have been taking pro-active measures in recent years to reform their public library services and promote reading culture. For example, in Singapore, the stock of e-books has increased tremendously, and the libraries of San Francisco and Japan have set up designated reading areas exclusively for teenagers. Besides, Taiwan has set up book-floating points in public places extensively so that members of the public can give away their books for "book-floating" purposes and take away free of charge books for reading as they wish, and established unmanned libraries at metro stations to enable the working population and students to borrow and return books on a self-service basis. In this connection, will the Government inform this Council:

(1) whether it conducted any study in the past three years on the reading habit of the people of Hong Kong, and assessed how the lethargic reading culture had affected (i) Hong Kong's competitiveness, (ii) the cultural literacy of members of the public and (iii) their language competency; if it did, of the details; if not, whether it will consider conducting the relevant studies;

(2) of the measures introduced by the authorities in the past three years to promote reading culture and the effectiveness of such measures; and

(3) whether it will set up book-floating points and make available at these points, for members of the public to freely take away for reading, those books which have been written-off by the public LEGISLATIVE COUNCIL ─ 13 April 2016 7077

libraries each year but which are still in readable conditions, and whether it will, by making reference to the aforesaid overseas practices, reform the public library services with a view to promoting reading culture through a multi-pronged approach; if it will, of the details; if not, the reasons for that?

SECRETARY FOR HOME AFFAIRS (in Chinese): President, the Hong Kong Public Libraries (HKPL) of the Leisure and Cultural Services Department (LCSD) currently operates a network of 68 static libraries and 12 mobile libraries to provide territory-wide public library services to meet the community's needs for knowledge, information, self-learning and continuous education as well as the constructive use of leisure time. The HKPL also organizes a wide variety of programmes to promote literary arts and reading culture in Hong Kong. My reply to the various parts of Mr TIEN's question is as follows:

(1) The HKPL has been assessing the reading habits of readers through making daily contacts with members of the public and analysing the usage of the library collections. Our major observations in recent years are as follows:

- Despite a drop in the overall number of loans in the past three years, an upward trend has been witnessed in the number of loans for children's books with a marked rise in the number of loans for Chinese Children Picture Books and books under the category of Chinese History and Geography. The numbers of loans in 2015 showed an increase of about 15% and 19% respectively over 2013. As regards English books for children, books under the categories of History, Pure Science and Children Picture Books were more popular with a rise of 21%, 14% and 7% respectively in the numbers of loans. For adult books, there was a rise of around 9% in the number of loans for Chinese books under the category of History and Geography and Biography.

- In view of the growing popularity of smart phones and tablets, and the changes in the reading pattern of the public, the HKPL devotes its efforts to develop a balanced and "mixed" library collection which covers printed books and e-resources to meet 7078 LEGISLATIVE COUNCIL ─ 13 April 2016

public needs. There was a continuous rise in the number of virtual visits (sessions) to the online "Library Without Walls" services of the HKPL (including the usage of e-resources) in the past three years. The number of virtual visits in 2015 was over 23 million times, which was 14% higher than that in 2014.

- Given the popularity of newspapers and periodicals services provided in libraries, the HKPL has increased the subscription of newspapers and periodicals in recent years to address the demands of readers.

In addition, the LCSD conducts regular opinion surveys on the facilities and services of public libraries to collect opinions of the public (including both users and non-users) on the current library services and future needs. The results of the 2014-2015 opinion survey showed that 85.6% of the library users were satisfied with the services and facilities of public libraries. For public library users, they had a regular reading habit and the books they read were mainly borrowed from public libraries (95.9%). As for non-users, they mostly preferred buying their own books (65.5%) or reading e-books through the Internet and smart phones (39.1%). With a view to further enhancing public library services to meet the expectations of users and attract non-users to use public library services and facilities, the LCSD is studying and analysing the survey statistics in depth and will also enhance collaboration and communication with the and other stakeholders in a bid to understand the reading habits and ability of students and the public.

(2) To foster a reading culture, the HKPL regularly organizes diversified reading activities for readers of different age groups. From 2013 to 2015, over 20 000 extension activities, with over 3 million attendance, were held each year. General extension activities include Reading Programmes for Children and Youth, Reading Clubs, Paired Reading Talks and Workshops, Thematic Storytelling Workshops and "Meet-the-Author" Talk Series, "Summer Reading Month", "4 ‧World23 Book Day Creative Competition", and so on. Each library will also hold thematic and roving book exhibitions LEGISLATIVE COUNCIL ─ 13 April 2016 7079 with tie-in recommended booklists. Since 2008, the HKPL has been collaborating with District Councils and local groups to organize reading activities which cater for the needs and characteristics of individual districts. These activities include Summer Reading Programme in Sham Shui Po and Reading Festival, and so on. To cultivate a reading habit among the public and fully utilize library resources, the HKPL regularly offers block loan services to schools and community organizations.

Moreover, the HKPL works actively with the Education Bureau every year to organize briefing sessions on library resources and facilities and various sessions of the "School Culture Day", participate in Education Bureau's "World Book Day" programmes to promote library resources and invite native-speaking English school teachers to conduct English storytelling sessions. In fact, since the implementation of the curriculum reform by the Education Bureau in 2001, "Reading to Learn" has been one of the Four Key Tasks. All kindergartens and primary and secondary schools in Hong Kong have spared no effort to promote reading. Adjustments and enhancements have been made in areas of school-based curriculum, teaching methodology and school library facilities to promote a reading culture in school. Relevant measures include the emphasis on the role of teacher-librarians in promoting reading, the implementation of reading schemes in different modes through home-school co-operation, and the ongoing initiative of teaching reading through the Chinese Language and English Language subjects. Since 2004, the Education Bureau has set up the "Book Works" website on reading, providing primary students with online reading materials in Chinese and English to enhance their reading interest and instil in them a good reading habit. Under the ongoing renewal of the school curriculum started in 2014, the Education Bureau has been promoting "Reading across the Curriculum" to enhance students' language proficiency through the enriched reading experiences and a broadened knowledge base provided in various Key Learning Areas and subjects. Improvements have been noted in students' reading proficiency, as reflected in international student reading assessment results in recent years.

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The HKPL will step up its promotion on "Reading among the Elderly" in future to cater for the needs of the elderly to pursue knowledge and make good use of leisure time. Measures include organizing different types of library activities and workshops which meet the needs of the elderly.

(3) The LCSD will continue to adopt proactive measures to promote reading through a multi-pronged approach as set out below:

- To facilitate access to public library books by schools and individual communities, the LCSD actively implements the Libraries@neighbourhood ― Community Libraries Partnership Scheme. Under the scheme, schools and non-profit making organizations are offered block loan of books and assistance for setting up community libraries tailored to their target audiences so that local residents can enjoy more prompt and convenient library services. At present, there are over 200 community libraries across the territory and the HKPL has lent out over 100 000 items.

- The HKPL is implementing a pilot scheme under which serviceable books of lower usage are donated to non-profit making organizations and educational bodies in accordance with the established procedures and regulations of the Government to optimize use of resources. The pilot scheme is underway and the LCSD will assess its effectiveness in due course.

- The LCSD also plans to provide on a trial basis in 2017-2018 three self-service library units, one each on Hong Kong Island, in and in the , at locations with heavier pedestrian flow and convenient access to public. The self-service units will provide round-the-clock library services on borrowing, returning and picking up reserved library materials, and so on.

- Having regard to the changing reading patterns of the public, apart from acquiring the types of books which have a high LEGISLATIVE COUNCIL ─ 13 April 2016 7081

lending rate, the HKPL plans to acquire or subscribe to 63 e-databases and eight e-book collections (covering about 240 000 titles) which include Chinese e-books of various subjects, English e-books for children and youngsters and various e-databases on newspapers and magazines in 2016-2017. The HKPL will continue to promote its e-services through publicity programmes of "Library at your fingertips".

The HKPL will endeavour and continue to enhance and improve library services and facilities actively in various aspects in order to promote reading, encourage a wider use of library facilities and cultivate a life-long reading habit.

Monitoring Safety of Glass Doors

4. IR DR LO WAI-KWOK (in Chinese): President, it has been reported that earlier on, a large-size glass door of a department store suddenly came off, crushing and injuring a passer-by. That accident has aroused public concern about monitoring of the safety of glass doors. In this connection, will the Government inform this Council:

(1) of the casualty figures for accidents involving glass doors each year since 2011 and, in respect of such figures, the respective numbers of persons injured as a result of crushing by falling glass doors and pinching by electrically operated sliding glass doors;

(2) as the Code of Practice for Installation of Electrically Operated Sliding Gates, Sliding Glass Doors and Rolling Shutters (the Code) issued by the Electrical and Mechanical Services Department (EMSD) was last revised in September 2003, and EMSD has no statutory power to monitor the safety of electrically operated sliding glass doors, whether the authorities will review the relevant legislation and the Code, with a view to stepping up the monitoring of the safety of electrically operated sliding glass doors; if they will, of the details; if not, the reasons for that; and

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(3) whether the authorities will enact legislation to regulate, in a unified manner, the installation, maintenance and repair as well as safety concerning various types of manually and electrically operated glass doors, so as to enhance the protection of public safety; if they will, of the details; if not, the reasons for that?

SECRETARY FOR DEVELOPMENT (in Chinese): President, in general, the erection of a glass door at a fence wall or at an entrance of a building is considered as "building works" under the Buildings Ordinance (Cap. 123) and its subsidiary legislation. Regardless of whether the works concerned are ones that require the Building Authority's prior approval of plans and consent for commencement, minor works under the Minor Works Control System or exempted works, they are subject to regulation under the aforementioned legislation and the practice notes and codes issued by the Building Authority. In particular, the Building Authority has issued a practice note to provide guidelines for compliance by the building industry on the design, installation, maintenance and repair of metal gates at fence walls or entrances of buildings, which also apply to glass doors. The said practice note states that reference should be made to the "Code of Practice for Installation of Electrically Operated Sliding Gates, Sliding Glass Doors and Rolling Shutters" published by the Director of Electrical and Mechanical Services (the EMSD Code) for electrically operated gates.

The reply to the three parts of the question is as follows:

(1) From 2011 to 2015, the numbers of casualties involved in accidents related to glass doors for which the Fire Services Department received calls requesting for its rescue assistance at the scene each year are as follows:

Year Number of persons injured Number of persons killed 2011 2 0 2012 7 0 2013 11 0 2014 5 0 2015 3 0 Total 28 0

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During the same period, the number of persons involved in reports received by the Electrical and Mechanical Services Department (EMSD) alleging injuries caused by electrically operated glass doors are as follows:

Number of persons alleging injuries caused by Year electrically operated glass doors 2011 2 2012 0 2013 0 2014 2 2015 1 Total 5

We do not have information on whether the two sets of figures above cover the same cases.

(2) and (3)

As mentioned above, carrying out works related to glass doors are subject to the regulation of the Buildings Ordinance, as well as the practice notes and codes issued by the Building Authority. Where the Building Authority finds any works are in contravention of any applicable regulation, or the works have been rendered dangerous or are liable to become dangerous, he may, by order, require the owner of the building or premises to carry out rectification or remedial works. Therefore, we consider that there is no need to introduce new legislation to regulate works related to glass doors.

As far as the EMSD Code is concerned, the fact that only five reports of accidents due to electrically operated glass doors were received by the EMSD in the past five years, and that all such reports involved minimal injuries, shows that the risk of relevant accidents is very low. The electrically operated glass doors involved in the five accidents mentioned above were in compliance with the EMSD Code. The EMSD considers that the EMSD Code has provided sufficient guidelines for reference by the industry and members of the public.

7084 LEGISLATIVE COUNCIL ─ 13 April 2016

Provision of Public Facilities and Services for Shui Chuen O Estate

5. MR CHAN CHI-CHUEN (in Chinese): President, the public rental housing development at Shui Chuen O, (SCO Estate) involves the construction of 18 blocks of buildings to provide 11 123 units. The development, being implemented in four phases, is scheduled for completion within this year and the units of the four blocks of buildings under Phase 1 were available for intake in 2015. Recently, some households of Shui Chuen O Estate have relayed to me that the public facilities and services in their district of residence are seriously insufficient, causing inconvenience to their daily living. In this connection, will the Government inform this Council:

(1) whether it knows the existing numbers of private cars and motor cycles owned by households of SCO Estate and the respective ratios of such numbers to the population of the Estate; whether it has assessed if the demand of households for parking spaces was underestimated in the initial planning of the numbers of parking spaces of private cars and motor cycles to be provided in SCO Estate; whether it has any plan to increase the numbers of such parking spaces;

(2) whether it has assessed if illegal parking was serious in SCO Estate last year; of the number of fixed penalty tickets issued by the Police each month at Pok Chuen Street against illegal parking since the intake of the Estate;

(3) given that some households of SCO Estate have relayed that the trip frequencies of the several franchised bus and green minibus routes that currently pass by the Estate are on the low side, whether the authorities have conducted any survey on whether the service levels of the relevant routes can meet the demand of the households during peak periods when they commute to and from work; whether the authorities have compiled statistics on the demand of the households for public transport services and collected their relevant views, as well as enhanced the external transport services for the Estate;

(4) as some households of SCO Estate have relayed to me that while police officers seldom patrol the Estate, police cars often drive through SCO Estate to Pok Chuen Street to take enforcement actions LEGISLATIVE COUNCIL ─ 13 April 2016 7085

against illegally parking, of the existing arrangement for police work in the Estate, and whether the authorities will consider deploying more police officers to patrol the Estate; and

(5) whether it has plans to enhance the fire and ambulance services for the district upon the completion of SCO Estate, and whether it has earmarked any "Government, Institution or Community" site near the Estate for the construction of a municipal services building?

SECRETARY FOR TRANSPORT AND HOUSING (in Chinese): President, my consolidated reply to the various parts of the question raised by Mr CHAN Chi-chuen is as follows:

(1) and (2)

During the planning of new public housing estates, the Hong Kong Housing Authority (HA) will determine the provision of parking facilities with reference to the Hong Kong Planning Standards and Guidelines (HKPSG) and in consultation with the Transport Department (TD) and District Councils. The provision of private car parking spaces and motorcycle parking spaces for residents of public housing estates generally depends on the number of public rental housing (PRH) units. Shui Chuen O Estate provides a total of about 11 100 PRH units. In accordance with the HKPSG, the HA should generally provide about 263 to 289 private car parking spaces and about 58 motorcycle parking spaces.

In the course of planning for Shui Chuen O Estate, the HA has taken into consideration of the isolated location of the Estate, Council's requests and the TD's comments and adopted a higher standard of parking facilities and provided an additional 15% of private car parking spaces and motorcycle parking spaces respectively for meeting the parking demand of residents. Where Shui Chuen O Estate provides a total of about 11 100 PRH units, a total of 403 private car parking spaces (including 333 private car parking spaces for residents and 70 private car parking spaces for the shopping centre) and 69 motorcycle parking spaces are provided.

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In the past year (from April 2015 to March 2016), the Police received a total of 238 complaints against obstruction by vehicles and illegal parking at Pok Chuen Street, and the complaint figures are shown as follows:

Month/Year Number of fixed penalty ticket issued Complaint figures 4/2015 43 1 5/2015 45 0 6/2015 49 1 7/2015 59 7 8/2015 71 9 9/2015 14 10 10/2015 84 48 11/2015 98 27 12/2015 240 39 1/2016 347 49 2/2016 142 31 3/2016 80 16 Total 1 272 238

The Police will take stringent enforcement action against illegal parking at major roads. And on roads where there is less traffic or used by construction site vehicles, the Police will take enforcement action against illegal parking under the Selective Traffic Enforcement Policy having regard to the actual situation. The Police will maintain close communication with the management of construction sites, and request the responsible persons to arrange large works vehicles to drive in and out of the construction sites during non-peak hours as far as possible so as to reduce traffic flow and maintain smooth road traffic.

(3) Prior to the completion of a new large-scale housing development, the TD will make plans for the public transport service arrangements for the development and introduce new routes or adjust existing services in a timely manner. After the intake of residents, the TD will deploy staff to conduct on-site inspections and surveys from time to time to monitor the changes in passenger demand. The TD will strengthen service to meet demand where necessary.

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Currently, Shui Chuen O Estate is served by two franchised bus routes with whole-day service, viz. Routes No. 287X and 288 of the Company (1933) Limited (KMB) which operate to/from Jordan and Sha Tin Town Centre respectively. Having regard to passenger demand, the headways during morning peak periods of these two routes have been shortened from 15 minutes when the services were first introduced to the current levels of 12 minutes and nine minutes respectively. In addition to the two aforesaid routes providing whole-day service, the number of franchised bus routes providing peak-only services for Shui Chuen O Estate has increased from two to five since the fourth quarter of 2015 in the light of passenger demand during peak periods. These peak-only services (that is, KMB Routes No. 47X and 83A and Cross-Harbour Bus Routes No. 182X, 682B and 982X) provide services between Shui Chuen O Estate and Kwun Tong, Kwai Tsing, Central, Wan Chai and Eastern District with a total of eight and nine special departures during morning and afternoon peak periods respectively.

Meanwhile, Shui Chuen O Estate is also served by three green minibus routes with whole-day service (that is, New Territories Green Minibus Routes No. 812 and 813 as well as Supplementary Route No. 813A) which operate to/from MTR Station, MTR Station and some other locations within Sha Tin. These routes, with headways of eight to 15 minutes during peak periods, provide more choices for short-haul passengers and those interchanging with railway services.

Based on the TD's observations, the overall service level of public transport for Shui Chuen O Estate can cater for the demand of the existing residents. In tandem with the anticipated population growth at Shui Chuen O Estate, the TD and franchised bus companies have put forward a number of proposals for enhancing franchised bus services for the Estate under the Route Planning Programme 2016-2017. These proposals include introducing the third route with whole-day service to/from Kwun Tong and an overnight service to/from Kowloon. The TD has also indicated that in accordance with the existing mechanism for adjusting the frequencies of franchised bus services, frequency improvement to the five aforesaid peak-only services will be implemented progressively once their patronage levels reach a certain threshold. 7088 LEGISLATIVE COUNCIL ─ 13 April 2016

Consultation with relevant District Councils on the proposals is underway. The TD will consider the views canvassed and decide on the proposals before implementing them gradually from the third quarter of 2016 onwards. The TD will continue to liaise closely with public transport operators, monitor the demand for public transport services at Shui Chuen O Estate, and make service adjustments in a timely manner.

(4) According to information provided by the Security Bureau, the Tin Sum Division of the Sha Tin District of the Police has already set up a temporary police post, manned by two police officers, on the ground floor of Shing Chuen House of Phase 2 of Shui Chuen O Estate. Apart from handling requests for assistance by residents of the Estate, the temporary police post also carries out patrol and traffic management duties in the Estate. In addition, the Tin Sum Division has arranged patrol vehicles to conduct patrols in the area of Shui Chuen O Estate. Police Tactical Units, Emergency Unit and Rural Area Patrol Team also conduct anti-crime patrols in the Estate from time to time for deterrence of crime. Also, the Regional Crime Prevention Office of the New Territories South Region of the Police and the Tin Sum Division have provided security advice to the Housing Department in order to enhance the security of Shui Chuen O Estate. During the intake and decoration periods of Shui Chuen O Estate, the Anti-triad Units of the New Territories South Region and Sha Tin District also conduct anti-crime patrols in the Estate to prevent infiltration of decoration works by law-breakers and to prevent crime. The Police will closely monitor the law and order situation of Shui Chuen O Estate and deploy suitable police manpower to maintain law and order.

(5) In the course of planning for the development of Shui Chuen O, the HA followed the requirements of HKPSG and has consulted relevant departments and organizations, including Planning Department, Fire Services Department and the District Council to formulate the planning brief and the provision of suitable facilities in the Estate. The Government will take into consideration the relevant policies and any needs arising from the development of the community, and review the provision of various public services in the district from time to time with the view to making suitable planning.

LEGISLATIVE COUNCIL ─ 13 April 2016 7089

Systems of Mutual Recognition of Professional Qualifications Between Hong Kong and Other Jurisdictions

6. MR MA FUNG-KWOK (in Chinese): President, some professionals have pointed out to me that the systems of mutual recognition of various professional qualifications established between Hong Kong and other jurisdictions can attract overseas professionals to work in Hong Kong, thereby promoting the development of Hong Kong's professional services. In this connection, will the Government inform this Council:

(1) whether it knows which of the following describes the present situation of the respective mutual recognition of professional qualifications between Hong Kong and the United Kingdom, the United States, Australia, New Zealand, Canada, France, Germany, Mainland China and Taiwan (list the names of the countries/territories concerned in the table below by profession):

(i) holders of overseas professional qualifications may directly obtain professional qualifications in Hong Kong through the mutual recognition system,

(ii) holders of overseas professional qualifications may obtain professional qualifications in Hong Kong by taking examinations run by the relevant professional bodies of Hong Kong,

(iii) the persons concerned are required to get local accreditation for their overseas professional qualifications before they may take the examinations run by the relevant professional bodies, and may obtain professional qualifications in Hong Kong upon passing the examinations, and

(iv) the overseas professional qualifications concerned are not recognized by the relevant professional bodies of Hong Kong; and

Professions (i) (ii) (iii) (iv) 1. General practitioner 2. Medical specialist 3. Forensic pathologist 4. Nurse 5. Chinese medicine practitioner 7090 LEGISLATIVE COUNCIL ─ 13 April 2016

Professions (i) (ii) (iii) (iv) 6. Dentist 7. Veterinary surgeon 8. Chiropractor 9. Medical laboratory technologist 10. Optometrist 11. Dietician 12. Pharmacist 13. Physiotherapist 14. Occupational therapist 15. Radiotherapist 16. Speech therapist 17. Clinical psychologist 18. Accountant 19. Social worker 20. Estate surveyor 21. Architect 22. Planner 23. Quantity surveyor 24. Building surveyor 25. Electrical engineer 26. Landscape architect 27. Land surveyor 28. Aeronautical engineer 29. Biomedical engineer 30. Construction engineer 31. Building services engineer 32. Chemical engineer 33. Civil engineer 34. Control engineer 35. Automation and instrumentation engineer 36. Electrical engineer 37. Electronic engineer 38. Environmental engineer 39. Energy engineer 40. Fire engineer 41. Gas engineer 42. Geotechnical engineer 43. Logistics and transportation engineer 44. Manufacturing and industrial engineer LEGISLATIVE COUNCIL ─ 13 April 2016 7091

Professions (i) (ii) (iii) (iv) 45. Marine and naval architecture engineer 46. Materials engineer 47. Mechanical engineer 48. Information engineer 49. Structural engineer

(2) what plans or concrete measures are in place to assist holders of overseas professional qualifications in obtaining the relevant professional qualifications in Hong Kong?

SECRETARY FOR LABOUR AND WELFARE (in Chinese): President, my reply to the question raised by Mr MA Fung-kwok's question is as follows:

(1) The present situation of the respective mutual recognition of professional qualifications between Hong Kong and the United Kingdom, the United States, Australia, New Zealand, Canada, France, Germany, Mainland China and Taiwan (by profession) is set out at Annex.

(2) Regarding the healthcare professions, to facilitate admission of more non-locally trained doctors to practise in Hong Kong, the Medical Council of Hong Kong (MCHK) has increased the frequency of the Licensing Examination from once to twice a year since 2014 and has introduced more flexible arrangement for the relevant internship requirement since 2016. Any person who has passed the Licensing Examination may apply for exemption from the internship training in a specialty if he/she has a comparable specialist experience. The internship period can be shortened from one year to six months. In addition, the Government has introduced a Bill into the Legislative Council in March 2016 to handle matters related to doctors, including enhancing the flexibility in admitting doctors from abroad to meet local needs. Under the Bill, the maximum term of registration and renewal of medical practitioners with limited registration will be extended from not more than one year to not more than three years. The MCHK has also been discussing with the Government how to improve the transparency of the Licensing Examination. The Government is actively considering the relevant proposal.

7092 LEGISLATIVE COUNCIL ─ 13 April 2016

The Dental Council of Hong Kong and the Nursing Council of Hong Kong have also increased the frequency of the Licensing Examination from once to twice a year to attract more qualified non-locally trained dentists and nurses to practise in Hong Kong.

In response to the challenges of an ageing population and increasing demand for healthcare services with higher expectations, the Government is conducting a strategic review on healthcare manpower planning and professional development in Hong Kong. The review covers 13 healthcare professions that are subject to statutory regulation, viz. medical practitioners, dentists, dental hygienists, nurses, midwives, Chinese medicine practitioners, pharmacists, chiropractors, medical laboratory technologists, occupational therapists, optometrists, physiotherapists and radiographers. It aims to make recommendations that would enable our society to better meet the projected demand for healthcare manpower as well as to foster professional development. The review is expected to be completed in mid-2016. The Government will publish the review report and take forward the recommendations as appropriate upon completion of the review.

Annex

The present situation of the respective mutual recognition of professional qualifications between Hong Kong and the United Kingdom, the United States, Australia, New Zealand, Canada, France, Germany, Mainland China and Taiwan (by profession)

Mutual recognition of professional qualifications Profession (i)(1) (ii)(2) (iii)(3) (iv)(4) (v)(5) 1. General - - - - MCHK will practitioner consider the qualifications and eligibility of all applicants on a case-by-case basis before allowing them to sit for relevant examination. LEGISLATIVE COUNCIL ─ 13 April 2016 7093

Mutual recognition of professional qualifications Profession (i)(1) (ii)(2) (iii)(3) (iv)(4) (v)(5) 2. Medical - - - - The Hong Kong specialist Academy of Medicine (HKAM) will consider the background of the applicants, including their professional qualifications, professional training received and continuing medical education activities they have joined on a case-by-case basis to confirm that they have met the eligibility criteria specified in the Specialist Register of the MCHK. 3. Forensic - - - - Forensic pathology pathologist is one of the specialties under the HKAM. Qualifications for registration as specialists are the same as above. 4. Nurse - - United - - Kingdom, United States, Australia, New Zealand, Canada, France, Germany, Mainland China and Taiwan 7094 LEGISLATIVE COUNCIL ─ 13 April 2016

Mutual recognition of professional qualifications Profession (i)(1) (ii)(2) (iii)(3) (iv)(4) (v)(5) 5. Chinese - - United - - medicine Kingdom, practitioner United States, Australia, New Zealand, Canada, France, Germany, Mainland China and Taiwan 6. Dentist - - United - - Kingdom, United States, Australia, New Zealand, Canada, France, Germany, Mainland China and Taiwan 7. Veterinary United - - - - surgeon Kingdom, United States, Australia, New Zealand, Canada and Taiwan(6) 8. Chiropractor - - - - The Chiropractors Council will consider each application on individual merit. LEGISLATIVE COUNCIL ─ 13 April 2016 7095

Mutual recognition of professional qualifications Profession (i)(1) (ii)(2) (iii)(3) (iv)(4) (v)(5) 9. Medical - - - - The Medical laboratory Laboratory technologist Technologists Board will consider each application on individual merit, and may request those applicants with non-local qualifications to pass relevant examination. 10. Optometrist - - - - The Optometrists Board will consider each application on individual merit, and may request those applicants with non-local qualifications to pass relevant examination. 11. Dietician There is no statutory requirement for professional registration in Hong Kong. 12. Pharmacist - - United - - Kingdom, United States, Australia, New Zealand, Canada, France, Germany, Mainland China and Taiwan 7096 LEGISLATIVE COUNCIL ─ 13 April 2016

Mutual recognition of professional qualifications Profession (i)(1) (ii)(2) (iii)(3) (iv)(4) (v)(5) 13. Physiotherapist - - - - The Physiotherapists Board will consider each application on individual merit, and may request those applicants with non-local qualifications to pass relevant examination. 14. Occupational - - - - The Occupational therapist Therapists Board will consider each application on individual merit, and may request those applicants with non-local qualifications to pass relevant examination. 15. Radiotherapist - - - - The Radiographers Board will consider each application on individual merit, and may request those applicants with non-local qualifications to pass relevant examination. 16. Speech There is no statutory requirement for professional registration in Hong therapist Kong. 17. Clinical There is no statutory requirement for professional registration in Hong psychologist Kong. LEGISLATIVE COUNCIL ─ 13 April 2016 7097

Mutual recognition of professional qualifications Profession (i)(1) (ii)(2) (iii)(3) (iv)(4) (v)(5) 18. Accountant(7) Qualifications Qualifications - Qualifications - of members of members of members of certain of certain of accountancy accountancy accountancy bodies in bodies in bodies in United United France, Kingdom, States and Germany Australia, Mainland and Taiwan New China not Zealand and recognized recognized Canada recognized 19. Social worker - - - - There is currently no arrangement of mutual recognition of professional qualifications between Hong Kong and the countries/territories mentioned in the question. The Social Workers Registration Board (Board) has put in place arrangements for recognizing the social work qualifications awarded by certain countries/territories (including United Kingdom, United States, Australia, Canada and Taiwan). Details are set out on the Board's website . 7098 LEGISLATIVE COUNCIL ─ 13 April 2016

Mutual recognition of professional qualifications Profession (i)(1) (ii)(2) (iii)(3) (iv)(4) (v)(5) 20. Estate surveyor - Mainland United - - China Kingdom, United States, Australia, New Zealand, Canada, France, Germany and Taiwan 21. Architect - Mainland United - - China(8) Kingdom, United States, Australia, New Zealand, Canada, France, Germany and Taiwan 22. Planner - Mainland United - - China(9) Kingdom, United States, Australia, New Zealand, Canada, France, Germany and Taiwan 23. Quantity - - United - - surveyor Kingdom, United States, Australia, New Zealand, Canada, France, Germany, Mainland China and Taiwan LEGISLATIVE COUNCIL ─ 13 April 2016 7099

Mutual recognition of professional qualifications Profession (i)(1) (ii)(2) (iii)(3) (iv)(4) (v)(5) 24. Building - - United - - surveyor Kingdom, United States, Australia, New Zealand, Canada, France, Germany, Mainland China and Taiwan 25. Electrical Please refer to item 36. Electrical engineer. engineer 26. Landscape Australia - United - - architect and New Kingdom, Zealand United States, Canada, France, Germany, Mainland China and Taiwan 27. Land surveyor - - United - - Kingdom, United States, Australia, New Zealand, Canada, France, Germany, Mainland China and Taiwan 28. Aeronautical United - Australia, - - engineer Kingdom, United New States, Zealand and France, Canada Germany, Mainland China and Taiwan 7100 LEGISLATIVE COUNCIL ─ 13 April 2016

Mutual recognition of professional qualifications Profession (i)(1) (ii)(2) (iii)(3) (iv)(4) (v)(5) 29. Biomedical Australia, - United - - engineer New Kingdom, Zealand and United Canada States, France, Germany, Mainland China and Taiwan 30. Construction Australia, - United - - engineer New Kingdom, Zealand and United Canada States, France, Germany, Mainland China and Taiwan 31. Building United - United - - services Kingdom, States, engineer Australia, France, New Germany, Zealand and Mainland Canada China and Taiwan 32. Chemical United - United - - engineer Kingdom, States, Australia, France, New Germany, Zealand and Mainland Canada China and Taiwan 33. Civil engineer United - United - - Kingdom, States, Australia, France, New Germany, Zealand and Mainland Canada China and Taiwan 34. Control Please refer to item 35. Automation and instrumentation engineer. engineer LEGISLATIVE COUNCIL ─ 13 April 2016 7101

Mutual recognition of professional qualifications Profession (i)(1) (ii)(2) (iii)(3) (iv)(4) (v)(5) 35. Automation United - United - - and Kingdom, States, instrumentation Australia, France, engineer(10) New Germany, Zealand and Mainland Canada China and Taiwan 36. Electrical United - United - - engineer(11) Kingdom, States, Australia, France, New Germany Zealand, and Taiwan Canada and Mainland China 37. Electronic United - United - - engineer Kingdom, States, Australia, France, New Germany, Zealand and Mainland Canada China and Taiwan 38. Environmental United - United - - engineer Kingdom, States, Australia, France, New Germany, Zealand and Mainland Canada China and Taiwan 39. Energy United - United - - engineer Kingdom, States, New Australia, Zealand and France, Canada Germany, Mainland China and Taiwan 40. Fire engineer United - United - - Kingdom, States, Australia, France, New Germany, Zealand and Mainland Canada China and Taiwan 7102 LEGISLATIVE COUNCIL ─ 13 April 2016

Mutual recognition of professional qualifications Profession (i)(1) (ii)(2) (iii)(3) (iv)(4) (v)(5) 41. Gas engineer United - United - - Kingdom, States, Australia, France, New Germany, Zealand and Mainland Canada China and Taiwan 42. Geotechnical United - United - - engineer Kingdom, States, Australia, France, New Germany, Zealand and Mainland Canada China and Taiwan 43. Logistics and United - United - - transportation Kingdom, States, engineer New Australia, Zealand and France, Canada Germany, Mainland China and Taiwan 44. Manufacturing United - United - - and industrial Kingdom, States, engineer Australia, France, New Germany Zealand, and Taiwan Canada and Mainland China 45. Marine and United - United - - naval Kingdom, States, architecture Australia, France, engineer New Germany, Zealand and Mainland Canada China and Taiwan 46. Materials United - United - - engineer Kingdom, States, Australia, France, New Germany, Zealand and Mainland Canada China and Taiwan LEGISLATIVE COUNCIL ─ 13 April 2016 7103

Mutual recognition of professional qualifications Profession (i)(1) (ii)(2) (iii)(3) (iv)(4) (v)(5) 47. Mechanical United - United - - engineer Kingdom, States, Australia, France, New Germany Zealand, and Taiwan Canada and Mainland China 48. Information United - United - - engineer Kingdom, States, Australia, France, New Germany, Zealand and Mainland Canada China and Taiwan 49. Structural - - United - - engineer Kingdom, United States, Australia, New Zealand, Canada, France, Germany, Mainland China and Taiwan

Notes:

(1) Holders of overseas professional qualifications may directly obtain professional qualifications in Hong Kong through the mutual recognition system.

(2) Holders of overseas professional qualifications may obtain professional qualifications in Hong Kong by taking examinations run by the relevant professional bodies of Hong Kong.

(3) The persons concerned are required to get local accreditation for their overseas professional qualifications before they may take the examinations run by the relevant professional bodies, and may obtain professional qualifications in Hong Kong upon passing the examinations.

(4) The overseas professional qualifications concerned are not recognized by the relevant professional bodies of Hong Kong.

(5) The professions to which the other four scenarios of mutual recognition of professional qualifications are not applicable.

7104 LEGISLATIVE COUNCIL ─ 13 April 2016

(6) Qualifications currently recognized by the Veterinary Surgeons Board (VSB) for registration purpose are listed in Schedules 1 and 2 to the Rules of the Veterinary Surgeons Board (Registration of Veterinary Surgeons). These include (but are not limited to) certain veterinary qualifications awarded by United Kingdom, United States, Australia, New Zealand, Canada and Taiwan. Generally speaking, holders of the relevant qualifications may be registered as veterinary surgeons for practice in Hong Kong. For holders of qualifications not listed in the said Schedules, the VSB will consider each application on individual merit.

(7) Members of overseas accountancy bodies recognized by the Hong Kong Institute of Certified Public Accountants can enjoy various levels of professional qualification recognition if they meet certain conditions.

(8) Only limited to the 347 architects from the Mainland China who have obtained the membership of the Hong Kong Institute of Architects through attending seminars, tests and interviews of mutual recognition of architect qualifications conducted yearly from 2004 to 2008.

(9) Only limited to the 51 planners from the Mainland China who have obtained the membership of the Hong Kong Institute of Planners through attending training sessions, examinations and interviews of mutual recognition of planner qualifications conducted yearly from 2006 to 2010.

(10) The mutual recognition of professional qualifications for this profession also applies to "Control engineer". "Control engineer" is a professional discipline on the Mainland China, which is similar to that of "Control, automation and instrumentation engineer" as classified by the Hong Kong Institution of Engineers.

(11) The mutual recognition of professional qualifications for this profession also applies to "Electrical engineer" (item 25). "Electrical engineer" (item 25) is a professional discipline on the Mainland China, which is similar to that of "Electrical engineer" (item 36) as classified by the Hong Kong Institution of Engineers.

Hong Kong's Position as a Major Capital Raising and Financing Centre

7. MR NG LEUNG-SING (in Chinese): President, in January this year, the Financial Services and the Treasury Bureau submitted a paper to the Panel on Financial Affairs of this Council, outlining the various policy initiatives to be implemented by the Bureau this year. The authorities have stated in the paper that the Government will capitalize on the opportunities arising from the implementation of the National 13th Five-year Plan and the "Belt and Road" Initiative to consolidate and enhance Hong Kong's position as a major platform of capital raising and financing for Mainland and overseas enterprises as well as a hub for offshore Renminbi (RMB) business, and that Hong Kong could also serve as a vital bridge between our country and countries along the Belt and Road. Moreover, the Financial Secretary (FS) has indicated in his Budget Speech this year that he has asked the Hong Kong Monetary Authority to establish an office to facilitate the financing of infrastructure projects and provide a platform for pooling the efforts of investors, banks and the financial sector to offer comprehensive financial services for various infrastructure projects. In this connection, will the Government inform this Council:

LEGISLATIVE COUNCIL ─ 13 April 2016 7105

(1) of the working relationship between the infrastructure project financing facilitation office and the various existing segments of the finance industry upon the commissioning of the office;

(2) whether it has studied the synergy effect between the conduct of financing activities in Hong Kong for the Belt and Road Initiative and the development of offshore RMB business in Hong Kong; if it has studied, of the details; and

(3) given that FS has said in his blog in June 2013 that the development of the bond market in Hong Kong lags behind that of other financing channels (e.g. banks and stock markets), how the Government will leverage on the financing activities for the Belt and Road Initiative to further boost the development of the bond market in Hong Kong?

SECRETARY FOR FINANCIAL SERVICES AND THE TREASURY (in Chinese): President,

(1) The Infrastructure Financing Facilitation Office (IFFO), which will be established by the Hong Kong Monetary Authority shortly, will bring together key stakeholders, covering fund providers (including equity investors such as private equity funds, infrastructure investment funds, sovereign wealth funds, and debt investors such as banks, multilateral development banks), infrastructure project proponents (for example, governmental institutions and corporates along the Belt and Road (B&R) region), and relevant professionals. IFFO will provide a platform for information exchange, experience sharing and capacity building on infrastructure financing, and promote Hong Kong as a major platform for B&R infrastructure project sourcing, financing and fund management, through collaboration with stakeholders, leveraging Hong Kong's role as an international financial centre.

(2) and (3)

With the implementation of the B&R Initiative and RMB internationalization, substantial financing needs will arise from related infrastructure development. Hong Kong, with efficient and reliable financial infrastructure, a deep RMB market, and a flexible 7106 LEGISLATIVE COUNCIL ─ 13 April 2016

issuance platform for bonds (including conventional bonds, dim sum bonds, Islamic bonds, green bonds, and so on), can provide an excellent platform to meet these financing needs. These additional financing activities in Hong Kong will help promote the further development of the bond market in Hong Kong, and consolidate and enhance Hong Kong's status as an international financial centre and a global offshore RMB business hub.

Ex-gratia Allowance for Fishermen in Respect of Marine Works

8. MR STEVEN HO (in Chinese): President, quite a number of fishermen have relayed to me that the various marine works carried out in recent years have resulted in temporary loss of fishing grounds during the works periods. Also, the fish catch of fishermen in the surrounding waters has dropped as the sea waters have been seriously polluted. In addition, upon completion of the works, parts of the waters concerned have been permanently designated as fishing restricted areas, which has further reduced the area of fishing grounds, affecting the livelihood of fishermen. However, the ex-gratia allowance (EGA) for fishermen currently granted by the Government in respect of marine works cannot fully compensate fishermen's losses due to such works. In this connection, will the Government inform this Council:

(1) of the relevant information in respect of the reclamation works under the following development projects which have commenced or have been proposed, namely: (i) the Hong Kong-Zhuhai-Macao Bridge and its related projects (including the artificial island), (ii) the Three-Runway System Project at the Hong Kong International Airport, (iii) development projects in Lantau (Tung Chung New Town Extension, Sunny Bay Reclamation and Siu Ho Wan Reclamation), and (iv) reclamation projects outside Victoria Harbour (including reclamation at Lung Kwu Tan, Tsing Yi Southwest and , together with the artificial islands in the central waters) (set out in the table below);

Development project Relevant reclamation works (i) (ii) (iii) (iv) 1. actual/projected time required for the works (including commencement and completion dates) LEGISLATIVE COUNCIL ─ 13 April 2016 7107

Development project Relevant reclamation works (i) (ii) (iii) (iv) 2. actual/projected total area of reclamation 3. actual/projected total area of permanent loss of fishing grounds 4. actual/projected total area of temporary loss of fishing grounds 5. actual/projected total area of fishing restricted areas that have been/will be established 6. actual/projected total amount of EGA that has been/will be granted to fishermen

(2) in respect of each of the marine works that commenced in the past five years or will commence in the next five years, of the actual or projected total area of temporary loss of fishing grounds due to such works and the time period involved;

(3) in respect of each of the marine works that commenced in the past five years or will commence in the next five years, of the actual or projected total area of marine parks that were or will be established upon completion of such works, with the relevant waters covered by such area marked on a map;

(4) of the number of EGA applications handled and the total amount of EGA granted by the authorities in each of the past five years;

(5) of the details of the existing procedures for handling as well as for vetting and approving EGA applications, including the average time taken from preparing to set up a relevant inter-departmental working group, registering the affected fishermen to granting EGA to them; the criteria adopted by the authorities for determining whether an individual fisherman has been affected by certain marine works;

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(6) of the respective numbers of EGA applications that are being handled and those which are still outstanding, and the expected time for completion of handling all such applications and releasing the EGA involved;

(7) as some fishermen have pointed out that, under the existing mechanism, no EGA will be granted to the affected fishermen in respect of the establishment of a fishing restricted area (e.g. a marine park) which is larger than the reclamation area in the waters concerned upon completion of the marine works, and that at present the durations of temporary loss of fishing grounds caused by some marine works have exceeded five years, showing that the existing mechanism has underestimated the durations of temporary loss of fishing grounds caused by some marine works which has resulted in the EGA granted to fishermen being less than their actual losses, whether the authorities will review the current methods for calculating EGA so as to take into account the aforesaid factors; if they will, of the details; if not, the reasons for that; and

(8) as some fishermen have pointed out that the Government, when planning various development projects, has often sacrificed the survival and development of the fishing industry, how the Government will prevent the occurrence of such a situation in future with a view to achieving a win-win situation between the development of the fishing industry and the development projects?

SECRETARY FOR FOOD AND HEALTH (in Chinese): President, when planning marine works, the Government will duly consult the stakeholders, and seek to minimize the impact on different stakeholders and the fisheries resources in the waters concerned. We understand that some fishermen are worried about the possible reduction in fishing grounds as a result of such marine works. The Government has put in place a mechanism to provide on compassionate grounds an ex-gratia allowance (EGA) to eligible fishermen affected for the purpose of relieving their burden. The Government will continue to consult fishermen through various channels when planning marine works and at the same time strive to foster the sustainable development of the local fisheries industry.

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My reply to the various parts of the question is as follows:

(1) and (2)

Information about the development projects already commenced or proposed are as follows:

Development projects Information sought (i) (ii) (iii) (iv) 1. Actual/projected The works of The - Tung Chung Reclamation time required Hong Kong Three-Runway New Town projects for the works Boundary System Extension: outside (including Crossing Project at the the 4th Victoria commencement Facilities, the Hong Kong quarter of Harbour are and completion Hong Kong International 2017 to the yet to be dates) Link Road Airport is 3rd quarter studied and the Tuen expected to of 2023 Mun ― Chek commence in (about 69 Lap Kok Link 2016 and take months) of Hong about eight Kong-Zhuhai- years to - Sunny Bay Macao Bridge complete and Siu Ho (HZMB) Wan commenced Reclamation: in 2011, 2012 yet to be and 2013 studied respectively. On the completion dates, please see note below. 2. Actual/projected About About - Tung Chung - Projects in total area of 190 hectares 650 hectares New Town central reclamation Extension: waters: about expect to 129 hectares build one or more - Sunny Bay artificial Reclamation: islands, about 60 to including 100 hectares possible reclamation 7110 LEGISLATIVE COUNCIL ─ 13 April 2016

Development projects Information sought (i) (ii) (iii) (iv) - Siu Ho Wan of about 600 Reclamation: to about 60 to 800 hectares 80 hectares in Kau Yi Chau nearby

- Other projects: yet to be studied 3. Actual/projected About About - Tung Chung Yet to be total area of 227 hectares 650 hectares New Town studied fishing grounds Extension: permanently lost about 129 hectares

- Sunny Bay and Siu Ho Wan Reclamation: yet to be studied 4. Actual/projected About About - Tung Chung Yet to be total area of 387 hectares 990 hectares New Town studied fishing grounds Extension: temporarily lost about 71 hectares

- Sunny Bay and Siu Ho Wan Reclamation: yet to be studied 5. Actual/projected No fishing restricted area Yet to be Yet to be total area of would be set up. As for the studied studied fishing marine parks established in restricted areas relation to the relevant works that have projects, please see reply in been/will be part (3). established LEGISLATIVE COUNCIL ─ 13 April 2016 7111

Development projects Information sought (i) (ii) (iii) (iv) 6. Actual/projected Around Yet to be Yet to be Yet to be total amount of HK$47 million calculated calculated calculated EGA that has been/will be granted to fishermen

Note:

In view of the construction difficulties and challenges such as the unstable supply of materials, shortage of labour, restriction in airport height, constraints in environmental protection requirements and the slower-than-expected consolidation performance of reclamation works, the Highways Department anticipates that the Hong Kong Link Road and Hong Kong Boundary Crossing Facilities projects will be completed by end 2017. The completion date of the Southern Connection of the Tuen Mun-Chek Lap Kok Link will tie in with that of the Hong Kong-Zhuhai-Macao Bridge Main Bridge whilst the Northern Connection is targeted for completion in 2018.

(3) The Government did not establish any marine park as a result of the marine works carried out in the past five years. The name, location and area of the marine parks proposed in relation to the marine works to be carried out in the coming five years are listed in the table below:

Marine works Location of Marine Parks Area of Marine Parks concerned HZMB Hong The waters around the About 970 hectares Kong Boundary Brothers north of Lantau Crossing Island Facilities Project Integrated The waters between Soko About 700 hectares Waste Islands and Shek Kwu Management Chau in the southern part Facilities Project of Hong Kong Three-runway The waters between the About 2 400 hectares System Project existing Sha Chau and Lung Kwu Chau Marine Park and the proposed Brothers Marine Park north of Lantau Island

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The boundaries of the marine parks proposed in relation to the HZMB Hong Kong Boundary Crossing Facilities Project and the Three-runway System Project are shown in the Annex. For the marine park proposed in relation to the Integrated Waste Management Facilities Project, detailed study of the proposal is still underway and the specific boundaries of the marine park have yet to be confirmed.

(4) The Government will set up an inter-departmental working group (IWG) to handle matters relating to the disbursement of EGA to fishermen affected by marine works. The number of EGA applications handled by IWGs and the total amount of EGA involved in the past five years are as follows:

Waters involved in Number of EGA Total amount of EGA marine works applications handled Lamma Island and 309 applications Around HK$1 million nearby waters handled Waters north of 701 applications Around HK$57 million Lantau Island handled Waters south of 1 284 applications Applications are being Tsuen Wan, Tsing being handled handled and hence Yi and Lantau information on the total Island, and in amount of EGA is not Victoria Harbour available yet and waters southeast of Hong Kong Island

(5) The IWG is responsible for handling matters relating to fishermen's EGA applications, including setting the eligibility criteria for the relevant EGA exercise (for instance, prescribing that the homeport of the fisherman's vessel must be associated with the affected fishing grounds, and that the vessel owner must be the holder of relevant documents such as a valid certificate of ownership and operating licence, and so on), planning and carrying out the registration of fishermen, vetting applications, formulating the apportionment criteria for the EGA exercise and disbursing the EGA. The IWG comprises representatives from the Lands Department (Chairman), the Agriculture, Fisheries and Conservation Department (AFCD), the LEGISLATIVE COUNCIL ─ 13 April 2016 7113

Marine Department (MD), the and the relevant works departments.

Prior to registering the EGA claims of fishermen, the IWG will conduct briefing for the fishermen of the approved homeports to explain in detail the eligibility criteria for registration, the arrangements for collecting the chits for registration and the arrangements for the registration day itself, the documents that applicants are required to put up, and other relevant information and details. Guidance Notes for Registration will also be distributed at the briefing session. The IWG will also inform fishermen of the arrangements for applying for EGA through press releases issued by the Information Services Department and other channels, such as posting the relevant notice at conspicuous places in the approved homeports and on the notice boards of the AFCD, the MD, the relevant district lands offices and district offices, and the wholesale fish markets under the Fish Marketing Organization. Copies of the notice will also be sent to the relevant Legislative Council Members, fishermen groups, District Council members and Rural Committees. The fishermen of approved homeports will then register their claims with the IWG on the days specified. After assessing the applications carefully, the IWG will inform the applicants in writing of the assessment results and the arrangements for the disbursement of the EGA. Generally speaking, it takes the IWG about 18 to 24 months to handle an EGA exercise from registration to the completion of assessment.

(6) The IWG is currently processing 1 284 EGA applications from fishermen in relation to marine works in the waters south of Tsuen Wan, Tsing Yi and Lantau Island, and in Victoria Harbour and the waters southeast of Hong Kong Island. It expects to complete the vetting work and disbursement of the EGA payment in early 2017.

(7) Since the waters in Hong Kong do not belong to any person, fishermen who lost their habitual fishing grounds due to marine works projects are not entitled to any statutory compensation because they do not have legal rights over these waters. However, recognizing that the fishermen affected may suffer a reduction in income and may incur extra expenses in relocating their activities to fishing grounds elsewhere, the Government has put in place a 7114 LEGISLATIVE COUNCIL ─ 13 April 2016

mechanism to provide on compassionate grounds an EGA for these fishermen who fulfil the eligibility criteria.

The EGA payable to fishermen affected by marine works is calculated on the basis of the notional value of fish catch from the area with permanent loss of habitual fishing grounds as a result of marine works (mainly due to reclamation operations), or the notional value of fish catch from the area with temporary loss of habitual fishing grounds as a result of sand dredging or mud disposal operations.

The Government reviewed the mechanism in 2012 and obtained support from the Finance Committee of the Legislative Council on 27 April in the same year for a significant upward adjustment of the basis for calculating the EGA. According to the new calculation basis, the EGA payable in respect of marine works resulting in a permanent loss of fishing grounds is equivalent to the notional value of fish catch in the affected area for 11 years (raised from seven years) whereas the EGA payable in respect of marine works resulting in a temporary loss of fishing grounds is equivalent to the notional value of fish catch in the affected area for five years (raised from three years). This calculation basis has taken into account whether the marine works will result in permanent or temporary loss of fishing grounds, regardless of the duration of the marine works projects concerned. In our view, sufficient justifications for another review of the mechanism do not exist for the time being.

As for the restricted areas set up for the purpose of safeguarding the safety of marine channels and aviation safety, since the restrictions would be applicable to all vessels (including fishing vessels), the Government will not grant EGA to fishermen because of the establishment of such restricted areas. The establishment of marine parks is for protecting fisheries resources in the waters concerned. Likewise, the Government will not grant EGA to fishermen for such a reason.

(8) Currently, all reclamation and major works of the Government are planned and implemented by the relevant planning and works departments. The Development Bureau is responsible for formulating development policies, and monitoring and co-ordinating LEGISLATIVE COUNCIL ─ 13 April 2016 7115 the implementation of the public works programme. During the implementation of the projects, the responsible departments will duly consult the relevant bureaux, departments and stakeholders to ensure that various considerations will be taken into account in a balanced way, serving the best interests of all parties concerned.

With regard to the development of the fisheries industry, the Government has been implementing step-by-step the suggestions made in the report of the Committee on Sustainable Fisheries, such as implementing the trawl ban, introducing a registration system for local fishing vessels, setting up the Sustainable Fisheries Development Fund, providing loans through the Fisheries Development Loan Fund and training courses for fishermen, and preparing for the designation of fisheries protection areas, with a view to promoting the sustainable development of the fisheries industry and assisting fishermen in developing or switching to sustainable fisheries and related operations. We will continue with the relevant work.

Annex

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Management of Police Operational Nominal Index Computer System

9. MR DENNIS KWOK: President, the Police Operational Nominal Index Computer System (PONICS), managed by the Criminal Records Bureau of the (HKPF), maintains a central repository of criminal records in Hong Kong. However, the policy of HKPF on keeping criminal records in PONICS and a prevailing list of offences in respect of which criminal records are to be kept in PONICS (Recordable Offence List) have not been made public. As a result, an individual convicted of an offence (particularly a minor offence) has no way to tell if his or her criminal record has been/will be kept in PONICS, either at the time of the conviction or anytime in the future. Regarding the management of PONICS, will the Government inform this Council:

(1) of the details of HKPF's policy on keeping criminal records in PONICS; how often HKPF conduct a review on the policy and whether HKPF will make public the outcome of such reviews;

(2) whether all criminal records which involve a sentence of imprisonment will be kept in PONICS, regardless of whether the relevant offences are on the Recordable Offence List at the time of conviction;

(3) whether, upon an offence being added to or removed from the Recordable Offence List, HKPF will retrospectively add to or remove from PONICS previous criminal records in respect of such an offence; and

(4) of the current Recordable Offence List and a list of offences which are no longer recordable, together with the dates on which the offences were added to or removed from the Recordable Offence List; whether HKPF will make public future updates to the Recordable Offence List; if HKPF will, of the details; if not, the reasons for that?

SECRETARY FOR SECURITY: President, under section 59 of the Police Force Ordinance (Cap. 232), the Police may retain all identifying particulars of a person who has been arrested for or convicted of an offence. Such records are kept primarily to assist the Police in discharging their statutory duties of preventing, detecting and investigating crimes.

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My consolidated reply to Mr Dennis KWOK's question is as follows:

The Police Operational Nominal Index Computer System (PONICS) maintains a central repository of criminal records in Hong Kong. In determining whether an offence upon conviction by court (Recordable Offence) should be recorded in the PONICS, the Police follow a number of guiding principles, which include:

- the gravity of the offence;

- the prevalence of the offence;

- whether heavier penalty could be imposed under the law upon a second or subsequent conviction of such an offence;

- the harm that has been or could be inflicted on persons or properties; and

- that the offence is not purely regulatory in nature.

Apart from the above principles, where a term of imprisonment, including a suspended sentence, is imposed upon conviction for any offence, that conviction will be recorded irrespective of whether the offence is on the list of Recordable Offences.

Examples of Recordable Offences include those involving the use of violence (for example, wounding, assault occasioning actual bodily harm); resulting or which may result in pecuniary loss to the public (for example, burglary and forgery); which are sexual in nature (for example, rape, indecent assault); involving dangerous drugs (for example, manufacturing and trafficking dangerous drugs); against the Banking Ordinance (Cap. 155); and relating to dangerous driving. Examples of offences the conviction of which will not normally be recorded include minor offences such as jay walking and hawking, and regulatory offences.

There is no retrospective effect regarding all newly-added Recordable Offences on the list; whereas in case an offence is removed from the list, previous convictions relating to that offence shall remain on the criminal records of the persons concerned.

7118 LEGISLATIVE COUNCIL ─ 13 April 2016

In 2004, the Police provided the then prevailing list of "recordable offences" on the request of the Legislative Council Panel on Security (details at ). The Police have been introducing timely amendments to the list in the light of updates to the law, and consulting the relevant government departments and statutory bodies as necessary. The list is currently under review by the Police and the relevant information will be made available to the public upon completion of the review.

Assessment of Statutory Compensation for Resumed Properties

10. MR WU CHI-WAI: President, at present, the Government may resume private lands for public purposes pursuant to the relevant legislation, e.g. the Lands Resumption Ordinance (Cap. 124). In determining statutory compensation in respect of lots/buildings under multiple ownerships, the Lands Department (LandsD) has adopted the practice of assessing the open market value of an individual unit on the date of resumption of the lot(s)/building(s) concerned, with reference to the use as shown on the approved building plan(s)/alterations and additions plan(s) and the use as permitted under the lease. For lots/buildings under a single ownership, LandsD considers that the owner concerned will normally choose to redevelop his or her lot(s)/building(s) if redevelopment is proved to be more profitable. In such cases, where redevelopment as a private initiative is more likely to take place, LandsD assesses the existing use value and the redevelopment value of the lot(s)/building(s) concerned, and proposes the higher of the two values reflecting a more profitable option as the statutory compensation. Furthermore, the (URA), established under the Urban Renewal Authority Ordinance (Cap. 563) in May 2001, carries out redevelopment projects in the urban areas of Hong Kong, and the Urban Renewal Strategy is a government strategy the implementation of which should be undertaken by URA. Regarding the assessment of statutory compensation for resumed properties, will the Government inform this Council:

(1) whether it was the Government's policy to distinguish between single ownership and multiple ownerships in respect of assessment of statutory compensation payable to dispossessed owners of resumed properties (SOMO Distinction) before Cap. 563 came into force in 2001;

LEGISLATIVE COUNCIL ─ 13 April 2016 7119

(2) whether the authorities have conducted any research into or study on SOMO Distinction before its implementation; if they have, of the research or study outcome;

(3) given that there are views that neither Cap. 563 provides for nor did the Consultation Paper on Urban Renewal Strategy (published by the authorities in 2001) contain any provisions for the assessment of statutory compensation payable to the affected owners, whether the authorities have assessed if the prevailing assessment principles are inadequate or irrelevant; if they have, of the assessment outcome; given that there are views that the Government or URA should issue guidelines in respect of assessment of statutory compensation for resumed properties in order to avoid confusion and disputes, whether the authorities have plans to issue such guidelines;

(4) given that paragraph 6.2(a) in the Land Resumption and Compensation in the Urban Area ― Guidelines for Owners, Occupiers and Surveyors states that, in respect of compensation to owner-occupiers of commercial properties, "[i]n appropriate cases where the redevelopment value for the land resumed is higher than the existing use value as at the date of reversion, the former will be offered as a statutory compensation", whether the authorities used the term "appropriate cases" in recognition of the fact that there were exceptions to the established approach of assessing the value of resumed properties; if so, whether there is a policy in place for specifying the circumstances or conditions which constitute such exceptions; and

(5) whether it is the case that the use of the term "appropriate cases" is intended to reserve discretionary powers to be exercised by the authorities; if so, of the legal basis for such a power?

SECRETARY FOR DEVELOPMENT: President, to facilitate the implementation of development projects/schemes by the Urban Renewal Authority (URA) under the Urban Renewal Authority Ordinance (Cap. 563) (URAO), the Government may need to resume landed properties. Under section 29 of the URAO, resumption of landed properties to facilitate the implementation of development projects/schemes by the URA shall be deemed to 7120 LEGISLATIVE COUNCIL ─ 13 April 2016 be a resumption for a public purpose within the meaning of the Lands Resumption Ordinance (Cap. 124) (LRO). The basis for assessing the statutory compensation payable to owners of landed properties affected by resumptions for implementing the URA's development projects/schemes is no different from that for resumptions for other public purposes under LRO.

My reply to the five-part question is as follows:

(1) and (2)

According to section 12(d) of the LRO, the value of the land resumed shall be taken to be the amount which the land if sold by a willing seller in the open market might be expected to realize. LRO, together with the applicable common law principles, provides the underlying basis for assessing the statutory compensation payable to the owners affected by resumption. Statutory compensation is based on the open market value of resumed properties, and it is not the Government's policy to distinguish between single ownership and multiple ownership in the assessment of compensation.

Generally speaking, in assessing the statutory compensation (that is, open market value) of a resumed property within a building in multiple ownership, only its existing use value (EUV) will be assessed. Where redevelopment by the owner is an option (such as when the building is in single ownership), both the EUV and redevelopment value (RDV) will be assessed and the higher of the two values will be offered.

(3) to (5)

Statutory compensation is assessed by Lands Department (LandsD) in accordance with the statutory provisions and the applicable common law principles. Section 5 of the "Land Resumption and Compensation in the Urban Area ― Guidelines for Owners, Occupiers and Surveyors" (Guidelines) generally set out the valuation principles and practices adopted by the LandsD in assessing the open market value for resumed properties.

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In a typical case, the LandsD will negotiate with the claimant and/or the professional appointed by the claimant the amount of statutory compensation. In default of agreement, the claimant may refer the case to the Lands Tribunal for a determination in accordance with section 6(3) of the LRO and any costs or remuneration reasonably incurred or paid by the claimant in employing persons to act in a professional capacity in connection with such offer or claim under section 6(2A) and section 8(4) of the LRO would be reimbursed. The procedure is comprehensively set out and explained in the Guidelines which is accessible from the LandsD's website and provide to all affected owners and occupiers for their information.

The term "appropriate cases" stated in paragraph 6.2 of the Guidelines refers to cases where redevelopment is an option and RDV can be realized, which is applicable when the owner can have complete control of the lot.

Proposals on Regulatory Regimes for Healthcare Professions

11. PROF JOSEPH LEE (in Chinese): President, the Government has mentioned in the 2016 Policy Address that it will soon complete the strategic review of healthcare manpower planning and professional development (the strategic review), and will gradually implement the recommendations of the strategic review, including the proposals on the regulatory regimes for healthcare professions. In this connection, will the Government inform this Council:

(1) given that members of the pharmaceutical industry have proposed the establishment of two boards to replace the existing Hong Kong Pharmacy and Poisons Board, and to separately regulate registration of pharmacists and matters concerning pharmaceutical products, whether this proposal has been studied in the strategic review; if so, of the details and the outcome; if the outcome of the study supports such a proposal, of the implementation timetable; if the proposal has not been studied, the reasons for that;

7122 LEGISLATIVE COUNCIL ─ 13 April 2016

(2) given that members of the supplementary medical professions have proposed that the chairmanships of the five boards under the Supplementary Medical Professions Council be taken up by members of the professions so as to enhance professional autonomy and promote development of the trades, whether this proposal has been studied in the strategic review; if so, of the details and the outcome; if the outcome of the study supports such a proposal, of the implementation timetable; if the proposal has not been studied, the reasons for that;

(3) given that, since 1997, members of the nursing sector have put forward a number of proposed amendments to the Nurses Registration Ordinance (Cap. 164), of the reasons why the authorities have not yet implemented such proposals, the details of their follow-up work and the timetable for implementing such proposals; and

(4) of the details of the strategic review conducted by the authorities in respect of the regulation of the 13 healthcare professions which are regulated by law, the specific proposals put forward and the timetable for implementing such proposals (set out in a table)?

SECRETARY FOR FOOD AND HEALTH (in Chinese): President, in response to the challenges of an ageing population and increasing demand for and higher expectations of healthcare services, the Government has set up a steering committee to conduct a strategic review on healthcare manpower planning and professional development in Hong Kong (the Review). The Review aims to formulate recommendations that would better enable our society to meet the projected demand for healthcare manpower and foster professional development, with a view to ensuring the healthy and sustainable development of our healthcare system.

The review covers 13 healthcare disciplines which are subject to statutory regulation, including medical practitioners, dentists, nurses, midwives, Chinese medicine practitioners, chiropractors, dental hygienists, medical laboratory technologists, occupational therapists, optometrists, pharmacists, physiotherapists and radiographers.

LEGISLATIVE COUNCIL ─ 13 April 2016 7123

To assist the steering committee in making informed recommendations, the Government commissioned the University of Hong Kong and The Chinese University of Hong Kong (CUHK) to provide professional input and technical support for the review. The Government also set up six consultative sub-groups, namely Medical Sub-group, Dental Sub-group, Nursing and Midwifery Sub-group, Traditional Chinese Medicine Practitioners Sub-group, Pharmacists Sub-group and Other Healthcare Professionals Sub-group, under the steering committee to hear and consolidate views from the healthcare professions.

My consolidated reply to Prof Joseph LEE's questions is as follows:

The steering committee is reviewing the regulatory regimes of the above 13 healthcare professions which are subject to statutory regulation, and will make recommendations on the way forward based on the findings of CUHK, including the prevalent international practices which gear towards more transparency, higher accountability and greater public participation, the local circumstances of Hong Kong which include public aspirations and concerns, as well as the history and development of statutory regulatory bodies.

Key areas of the review include:

(i) functions of the statutory regulatory bodies;

(ii) membership of the statutory regulatory bodies, in particular, the number and proportion of lay members;

(iii) arrangements for non-locally trained healthcare professionals to practise in Hong Kong;

(iv) complaint handling and disciplinary inquiry mechanism; and

(v) training and development, in particular, mandatory continuous professional education and development.

As mentioned above, the review covers the functions and composition of the statutory regulatory bodies, including the Pharmacy and Poisons Board of Hong Kong as well as the Supplementary Medical Professions Council and its 7124 LEGISLATIVE COUNCIL ─ 13 April 2016 boards. The steering committee agrees that the prevalent legislation which governs the healthcare professions, such as the Nurses Registration Ordinance, should keep pace with the times and should be comprehensively reviewed.

We expect that the Review will be completed in mid-2016. Upon its completion, the Government will publish the review report and consult stakeholders on how to take forward the relevant recommendations accordingly.

Statistics on Small Houses

12. MR ALBERT CHAN (in Chinese): President, under the Government's Small House Policy, a male indigenous villager at least 18 years old who is descended through the male line from a resident in 1898 of a recognized village in the New Territories (indigenous villager) may apply once during his lifetime to the authorities for permission to erect for himself a small house on a suitable site within his own village. Upon being given approval by the authorities to construct a small house, an indigenous villager must, before commencement of the works, apply for the issue of a Certificate of Exemption pursuant to the Buildings Ordinance (Application to the New Territories) Ordinance (Cap. 121) in respect of building, site formation and drainage works. After the relevant works have been completed, a District Lands Officer will issue a Certificate of Compliance upon receipt of the construction completion report and at the same time upon his satisfaction that all other obligations imposed on the applicant have been fully complied with. Some members of the public have recently relayed to me that in recent years, quite a number of indigenous villagers have constructed many small houses in a number of villages, which has seriously affected their living environment. In this connection, will the Government inform this Council, in each of the past 10 years:

(1) of (i) the number of applications received by the Lands Department (LandsD) for the construction of small houses, (ii) the number of Certificates of Exemption issued by LandsD for the construction of small houses, and (iii) the number of Certificates of Compliance issued by LandsD for small house construction works; regarding each of the items (i) to (iii), the District Council district and village in which the largest number of cases were found; and

LEGISLATIVE COUNCIL ─ 13 April 2016 7125

(2) of (i) the number of cases in which removal of restriction on alienation for small houses was approved by the authorities following the owners' payment of land premium for the small houses concerned, (ii) the total amount of such land premium collected by the authorities in respect of small houses, and (iii) the respective largest and smallest amounts of land premium collected by the authorities in a single case?

SECRETARY FOR DEVELOPMENT (in Chinese): President, my reply to various parts of the question is as follows:

(1) The number of small house applications received and Certificates of Compliance (CCs) issued by the Lands Department (LandsD) in the past 10 years (2006 to 2015) is set out below:

Number of small house Year Number of CCs issued applications received 2006 1 767 797 2007 1 466 1 085 2008 1 810 920 2009 1 769 847 2010 1 959 973 2011 2 374 812 2012 2 690 1 089 2013 2 566 1 151 2014 2 522 1 066 2015 2 547 904

Note:

In view of the time required for processing small house applications and building small houses, the applications received in a particular year do not necessarily imply that the relevant CCs were issued in the same year.

The LandsD does not keep a separate breakdown of the number of Certificates of Exemption in respect of building works issued solely for small houses.

According to the LandsD's records, in the past 10 years (2006 to 2015), the District Lands Office received the largest 7126 LEGISLATIVE COUNCIL ─ 13 April 2016

number of small house applications at around 8 900 and issued the largest number of CCs at around 3 900.

The LandsD has no separate breakdown, by District Council district or by village, of the number of small house applications received and CCs issued.

(2) The number of approved cases for removal of restriction on alienation and the amount of premium collected for removal of restriction on alienation by the LandsD in the past 10 years (2006 to 2015) are set out below:

Number of approved cases Amount of premium collected for Year for removal of restriction removal of restriction on alienation on alienation ($ million) 2006 444 383 2007 407 352 2008 494 457 2009 474 344 2010 454 394 2011 493 519 2012 404 513 2013 485 597 2014 577 829 2015 462 749

The highest and lowest amount of premium collected for removal of restriction on alienation (for a single case) in the past 10 years (2006 to 2015) were about $14.6 million and $118,000 respectively.

Housing for Elderly

13. MR TONY TSE (in Chinese): President, there are comments that following the emergence of the problem of ageing population in Hong Kong, the housing needs of the elderly have become one of the major issues of public concern, and have expanded the domain of housing development in the future. Nevertheless, only the Hong Kong Housing Authority and the Hong Kong Housing Society have provided housing flats tailor-made for the elderly at LEGISLATIVE COUNCIL ─ 13 April 2016 7127 present, whilst private developers have not responded actively to the housing needs of the elderly. In this connection, will the Government inform this Council:

(1) whether it adopted any measure in the past five years to encourage private developers to provide flats that cater for the needs of the elderly when carrying out their residential development projects; if it did, of the details; if not, the reasons for that; whether it assessed in the past five years the disposition of private developers to provide such flats; if it did, of the outcome; if not, the reasons for that;

(2) whether it studied in the past five years ways to draw on overseas experience and practices so as to fully implement the policy visions of "ageing in place" and "inter-generational harmony"; if it did, of the details; if not, whether it will allocate resources to conduct such a study;

(3) whether it conducted in the past five years any comprehensive review of issues such as the land policy, town planning, land lease conditions, and the provisions regarding the universal design of residential buildings under the Buildings Ordinance (Cap. 123), with a view to implementing the policy visions mentioned in (2); if it did, of the outcome and the major recommendations for improvement; if not, the reasons for that and whether it will conduct the relevant review; and

(4) whether it will conduct a review in the near future of the contents, execution and effectiveness of the housing policy for the elderly; if it will, of the details; if not, the reasons for that?

SECRETARY FOR TRANSPORT AND HOUSING (in Chinese): President, with input from the Development Bureau and the Labour and Welfare Bureau, my consolidated reply to the various parts of the question raised by Mr Tony TSE is as follows:

Housing is a livelihood issue which concerns various age groups in the society. At the same time, the Government is also concerned about the welfare of the elderly and has been promoting the policy of "Ageing in place". "Ageing 7128 LEGISLATIVE COUNCIL ─ 13 April 2016 in place as the core, institutional care as back-up" is the Government's fundamental elderly care policy. In line with the policy of "Ageing in place" and to improve the living environment of the elderly, with regard to public housing, the Hong Kong Housing Authority (HA) has adopted the universal design in newly-built public rental housing (PRH) units to cater for the needs of tenants of different age and physical conditions. Tenants can continue to reside in the same unit even in their old age or when their mobility is impaired. For elderly tenants living in old PRH blocks, the HA will modify the facilities of their PRH units to cater for their needs. In addition, the HA implements a number of schemes such as the Harmonious Families Priority Scheme, Addition Policy for Harmonious Families, Harmonious Families Transfer Scheme and Amalgamation of Tenancies for Harmonious Families to encourage younger households to live with or live nearby their elderly family members with a view to promoting mutual family support and care for the elderly. The Hong Kong Housing Society also puts in place the "Ageing-in-Place" Scheme in its rental estates to improve the living environment and facilities for the elderly residents, enabling them to age in place.

Regarding private housing, section 72 of the Building (Planning) Regulations (Cap. 123F) under the Buildings Ordinance (Cap. 123) stipulates design requirements on barrier-free access and facilities to ensure that suitable barrier-free access and facilities are provided in buildings. The (BD) under the Development Bureau also issued the Design Manual: Barrier Free Access which provides guidelines on barrier-free access and facilities to supplement the provisions of section 72 of the Building (Planning) Regulations. All newly constructed buildings and any alterations, modifications or additions to existing buildings are required to comply with the latest barrier-free design standards as stated in the prevailing Building (Planning) Regulations and the Design Manual. Chapter 6 of the Design Manual also specifically lists out the design guidelines and considerations for the elderly and elderly with frailty. The barrier-free design requirements, design considerations and recommended design requirements of the Design Manual would enhance greater independence of the elderly, particularly those who are physically frail or with impaired mobility. The implementation of the requirements of the above Design Manual has resulted in greater awareness among property developers on the topic of barrier-free access and the importance of making the built-environment more accessible for the elderly.

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The Design Manual was first published in 1984 and was updated from time to time in light of the advancement in building technology and social development. The BD set up the Technical Committee on the Design Manual in June 2014 to collect and to listen to the views and suggestions of the building sector and relevant organizations in respect of the practical experience in the use of the Design Manual, advancements in building designs, technologies and construction methods, and the latest relevant overseas regulatory controls and standards. The BD will consider the Committee's recommendations on the Design Manual and continue to listen to the views of stakeholders with a view to continuously enhancing the barrier-free design.

In respect of urban planning, the Planning Department is carrying out the "Hong Kong 2030+: Towards a Planning Vision and Strategy Transcending 2030" (Hong Kong 2030+) to update the long-term territorial development strategy. The study will examine various social and economic trends which have far-reaching implications on the long-term development of Hong Kong, and assist in formulating suitable strategies on urban and spatial planning and development to cater for Hong Kong's future needs, including studying how urban planning and building design, and so on, can meet the challenges arising from the ageing population. The initial study findings and relevant recommendations of Hong Kong 2030+ will be available later this year and public engagement will be conducted.

Counter-cyclical Measures to Stabilize Property Market

14. MR JAMES TIEN (in Chinese): President, since 2009, the Hong Kong Monetary Authority (HKMA) has introduced seven rounds of counter-cyclical measures to tighten the requirements on property mortgage loans. The last round of measures, which was introduced on 27 February 2015, comprise three measures, one of which is the lowering of the maximum loan-to-value (LTV) ratio on mortgage loans to be offered by banks for self-use residential properties with value below $7 million from 70% (a cap which had been in place for over 23 years by then) to 60%. On the same day, the maximum cover under the Mortgage Insurance Programme (MIP) offered by the Hong Kong Mortgage Corporation Limited (HKMCL) was reduced from 90% LTV ratio to 80% LTV ratio accordingly. In this connection, will the Government inform this Council:

7130 LEGISLATIVE COUNCIL ─ 13 April 2016

(1) of the changes in the average prices and transaction volumes of residential properties following the introduction of each round of counter-cyclical measures;

(2) whether it has assessed the impacts of the measures taken by HKMA to reduce LTV ratio and by HKMCL to reduce MIP cover on members of the public, particularly the prospective home buyers; if it has assessed, of the details; if not, the reasons for that;

(3) given that the Chief Executive of HKMA said in February this year that although residential property prices had fallen gradually from the peak in September last year coupled with a decline in transaction volumes, the counter-cyclical measures would be suitably relaxed only when it was certain that the property market had entered a downward cycle, of the criteria adopted by HKMA for affirming that the property market has entered a downward cycle, and the level, to be reached by the falling property prices, at which HKMA has contemplated relaxing the counter-cyclical measures; and

(4) whether it will consider first restoring the maximum LTV ratio to 70% for self-use residential properties and the maximum MIP cover to 90% LTV for mortgage loans, so that members of the public with home purchase needs can secure the necessary loans; if it will, of the expected time for such restoration; if not, the reasons for that?

SECRETARY FOR FINANCIAL SERVICES AND THE TREASURY (in Chinese): President,

(1) The Hong Kong Monetary Authority (HKMA) has introduced seven rounds of countercyclical macroprudential measures since October 2009. Please refer to the Annex for changes in the residential property price index and property transactions.

(2) To maintain banking stability, the HKMA's countercyclical macroprudential measures to tighten property mortgages seek to strengthen the resilience of banks and borrowers to cope with any impact in the fall of property prices.

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The HKMA understands the public aspiration about home ownership, and is mindful that its supervisory measures may impact on some homebuyers. Hence, when the HKMA introduced each round of new measures, it would strive to minimize the impact of these measures on users, especially first-time homebuyers. In relation to the first six rounds of countercyclical measures, the HKMA had all along strived to allow homebuyers to borrow mortgage loans at a maximum loan-to-value (LTV) ratio of 70% for small and medium sized residential properties for self-use.

However, the property market, particularly that of small and medium sized residential units, had become buoyant since the second half of 2014. To safeguard banking stability, the HKMA introduced the seventh round of prudential measures in February 2015 to require banks to lower the maximum LTV ratio to 60% for any residential property with a value below HK$7 million.

Meanwhile, the Hong Kong Mortgage Corporation Limited (HKMCL), based on its own risk management and commercial considerations, adjusted its Mortgage Insurance Programme (MIP) to reduce the maximum coverage of the MIP for eligible residential properties from 90% to 80% in terms of the LTV ratio. However, a regular-salaried first-time homebuyer with a debt-to-income ratio of 45% or below would remain eligible for the maximum 90% mortgage coverage on a property of a value at HK$4 million or below. Based on the assessment of the HKMCL at that time (February 2015) with reference to its past experience, about half of the first-time homebuyers would remain eligible for the maximum 90% mortgage coverage.

(3) and (4)

Although residential property prices and the transaction volume scaled back in recent months, the demand and supply in the property market remains imbalanced. The current property prices are still not matching homebuyers' affordability. In determining whether the property market has entered into a downward cycle, we will consider various factors, including the risks faced by banks, economic conditions, affordability indicators, changes in prices and the transaction volume of the property market, and supply conditions, and so on.

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At the moment, the HKMA has yet to confirm a downward cycle in the property market. The HKMA will continue to monitor the market conditions closely and introduce appropriate measures according to the development of the property market cycle to safeguard banking stability.

In respect of mortgage insurance, the HKMCL will continue to monitor the market situation closely, and will consider the need to adjust the MIP coverage ratio based on relevant risk management and commercial considerations. The HKMCL has no intention to adjust the MIP coverage ratio at the moment.

Annex

Overall residential property transactions and property price index after HKMA introduced seven rounds of countercyclical macroprudential measures since October 2009

Overall residential property Overall residential Countercyclical transactions property price prudential (Average monthly index (1999 = 100) measures number of cases) 2009 September 12 285 129.9 October 9 300 131.7 1st round November 9 213 132.3 December 9 108 134.7 2010 January 10 656 138.3 February 11 733 140.7 March 10 860 143.4 April 12 236 146.6 May 11 014 145.8 June 9 130 146.9 July 12 957 151.3 August 14 699 154.9 2nd round September 10 424 156.1 October 9 552 160.2 November 13 189 163.7 3rd round December 9 328 163 LEGISLATIVE COUNCIL ─ 13 April 2016 7133

Overall residential property Overall residential Countercyclical transactions property price prudential (Average monthly index (1999 = 100) measures number of cases) 2011 January 8 002 169.5 February 10 390 176.4 March 10 456 179.5 April 7 635 183.3 May 9 681 185.9 June 9 043 188.1 4th round July 5 254 185.5 August 5 439 184.5 September 4 823 185.6 October 4 643 183.2 November 4 795 182 December 4 301 181.1 2012 January 3 507 179.8 February 3 884 183.8 March 11 358 192.2 April 8 217 198.5 May 8 349 203.2 June 5 886 205.1 July 5 709 206.1 August 8 087 210.8 September 7 301 217.8 5th round October 8 714 223.7 November 7 035 225.9 December 3 286 227.6 2013 January 5 430 232.5 February 6 307 240 6th round March 4 534 239.9 April 3 427 239.4 May 4 276 240.8 June 3 740 243.3 July 3 986 245.1 August 3 407 246.3 September 3 686 245.5 October 3 426 245.4 November 3 790 245 December 4 667 245.1 7134 LEGISLATIVE COUNCIL ─ 13 April 2016

Overall residential property Overall residential Countercyclical transactions property price prudential (Average monthly index (1999 = 100) measures number of cases) 2014 January 4 488 244.7 February 3 159 244.3 March 3 141 243.7 April 4 781 245 May 5 270 247.4 June 5 960 250.3 July 7 792 256.4 August 6 212 261.2 September 5 958 266.3 October 6 189 270.5 November 4 848 274.1 December 6 009 278.3 2015 January 6 412 284.6 February 6 027 291.5 7th round March 4 329 291.5 April 4 549 297.4 May 5 168 298.8 June 5 776 301.3 July 5 393 304.1 August 3 896 305.3 September 4 263 306.1 October 3 300 302.3 November 2 826 293.4 December 4 043 285.3 2016 January 2 045 278.9 February 1 807 272.8 March 2 369 Unreleased

Sources:

Overall residential property transactions: Land Registry

Overall residential property price index: Rating and Valuation Department

LEGISLATIVE COUNCIL ─ 13 April 2016 7135

Manpower of Doctors and Registration Requirements for Non-local Doctors

15. MR LEUNG YIU-CHUNG (in Chinese): President, according to the Medical Registration Ordinance (Cap. 161), except medical graduates of the University of Hong Kong and The Chinese University of Hong Kong, all persons who wish to register as medical practitioners (i.e. doctors) in Hong Kong are required to pass the Licensing Examination administered by the Medical Council of Hong Kong (MCHK) and complete the internship assessment in Hong Kong. All along, there have been views that due to the excessively high threshold of the Licensing Examination, over the years only a small number of non-local doctors have passed the Licensing Examination and registered as medical practitioners. As a result, the problem of shortage in doctors in Hong Kong cannot be alleviated. On 2 March this year, the Government introduced the Medical Registration (Amendment) Bill 2016 into this Council, and some of the proposals in the Bill aim at facilitating the admission of non-locally trained doctors, in particular specialists, to practise in Hong Kong. However, there are comments that MCHK needs to further relax the restrictions on the registration and practice of non-locally trained doctors in Hong Kong. In this connection, will the Government inform this Council:

(1) of the respective numbers of candidates sitting and passing the Licensing Examination in the past five years, broken down by the countries/territories where the candidates received their medical training and by the three parts of the Licensing Examination (i.e. Examination in Professional Knowledge, Proficiency Test in Medical English and Clinical Examination);

(2) of the number of local medical graduates and the number of doctors whom the Hospital Authority (HA) intends to recruit, in the next five years; whether it knows HA's manpower plans and objectives for doctors; and

(3) whether the strategic review on healthcare manpower planning and professional development currently conducted by the Government covers the review of the restrictions on the registration and practice of non-locally trained doctors in Hong Kong; if it does, of the direction, contents and timetable of the relevant review; if not, whether it will conduct such a review?

7136 LEGISLATIVE COUNCIL ─ 13 April 2016

SECRETARY FOR FOOD AND HEALTH (in Chinese): President, in response to the challenges of an ageing population and increasing demand for and higher expectations of healthcare services, the Government has set up a steering committee to conduct a strategic review on healthcare manpower planning and professional development in Hong Kong (hereinafter referred as "the Review"). The Review aims to formulate recommendations that would better enable our society to meet the projected demand for healthcare manpower and foster professional development, with a view to ensuring the healthy and sustainable development of our healthcare system. We expect that the Review will be completed in mid-2016.

In response to the mounting public concerns over the efficiency of the Medical Council of Hong Kong (MCHK) in complaint investigation and disciplinary inquiries, as well as the lack of flexibility in the arrangements for non-locally trained doctors to practise in Hong Kong, pending the completion of the Review report and in advance of the full implementation of its recommendations, the Government introduced the Medical Registration (Amendment) Bill 2016 into the Legislative Council in March 2016, aiming to:

(i) increase lay participation in MCHK, with a view to enhancing its accountability and public participation;

(ii) improve the complaint investigation and disciplinary inquiry mechanism of MCHK; and

(iii) facilitate non-locally trained doctors in Hong Kong to practise in Hong Kong through limited registration.

My reply to the three parts of the question raised by Mr LEUNG Yiu-chung is as follows:

(1) According to the Medical Registration Ordinance, except medical graduates of the University of Hong Kong and The Chinese University of Hong Kong, all persons who wish to register as medical practitioners with full registration in Hong Kong, regardless of whether they have obtained qualifications to practise as a medical LEGISLATIVE COUNCIL ─ 13 April 2016 7137

practitioner outside Hong Kong, are required to sit the Licensing Examination of MCHK and complete the internship assessment in Hong Kong.

The number of candidates who sat and passed the Licensing Examination in the past five years (2011 to 2015) by regions where they acquired medical qualifications is set out in the Annex.

(2) The Government does not have the number of local medical graduates in the coming five years (2016 to 2020). Generally speaking, the local medical students graduating in the coming five years are those admitted in the respective academic years from 2011-2012 to 2014-2015. The number of approved medical places funded by the University Grants Committee (UGC) in these academic years is as follows:

Approved Expected year UGC-funded of graduation places 2011-2012 academic year 320 2016 2012-2013 academic year (for candidates of the Hong Kong 420 2017 Advanced Level Examination) 2012-2013 academic year (for candidates of the Hong Kong 420 2018 Diploma of Secondary Education Examination) 2013-2014 academic year 420 2019 2014-2015 academic year 420 2020

The Hospital Authority (HA) assesses the manpower situation of doctors annually in the light of factors such as the estimated staff turnover, market supply, manpower requirement for new services and financial position, so as to estimate the annual manpower resources requirement. The HA plans to recruit about 420 doctors in 2016-2017.

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(3) The review by the Steering Committee on Healthcare Manpower Planning and Professional Development covers, among others, the arrangements for non-locally trained doctors to practise in Hong Kong, in particular the arrangements for practice through limited registration.

Non-locally trained medical graduates may become registered medical practitioners with full registration through the Licensing Examination of MCHK. Separately, specified institutions (including the Director of Health, the HA and the two medical schools) may also apply to MCHK on behalf of non-locally trained medical practitioners with proven experience and knowledge for limited registration for the purpose of teaching, conducting research or performing clinical work for the institutions.

Given that applications for limited registration are to be approved by MCHK and the registration is valid for only one year subject to annual renewal by MCHK, the number of non-locally trained doctors currently employed under limited registration is limited. The current mechanism is thus not effective in attracting non-locally trained medical professionals to practise in Hong Kong.

To facilitate non-locally trained doctors to practise in Hong Kong through limited registration the Government proposes to amend the Medical Registration Ordinance by extending the maximum term of limited registration from not exceeding one year to not exceeding three years. The purpose of this amendment is to improve the existing arrangements for limited registration, so as to facilitate non-locally trained doctors (especially those originally from Hong Kong) to work in and stay on in Hong Kong. Applications for limited registration will still be subject to MCHK's approval. There is no relaxation of the requirements for practising in Hong Kong.

LEGISLATIVE COUNCIL ─ 13 April 2016 7139

Annex

Number of candidates who sat and passed the Licensing Examination of MCHK 2011

Exam in Professional Knowledge Proficiency Test in Clinical Examination (Part III) (Part I) Medical English (Part II) Year Number who Number who Number who Number who Number who Number who % % % sat for exam passed sat for exam passed sat for exam passed 2011 8 (Australia) 5 (Australia) 63 48 (Mainland) 44 (Mainland) 92 4 (Australia) 1 (Bangladesh) 1 (Myanmar) 1 (Myanmar) 100 1 (Belgium) 2 (Belgium) 1 (Russia) 1 (Russia) 100 1 (Canada) 2 (Canada) 2 (Canada) 100 1 (Spain) 1 (Spain) 100 1 (India) 1 (India) 100 4 (India) 3 (Taiwan) 3 (Taiwan) 100 2 (Ireland) 5 (Ireland) 2 (Ireland) 40 36 (Mainland) 8 (Mainland) 22 131 (Mainland) 14 (Mainland) 11 1 (Netherlands 1 (Myanmar) Antilles) 1 (Nigeria) 1 (Philippines) 2 (Pakistan) 1 (South Africa) 1 (Philippines) 1 (Philippines) 100 24 (The 1 (Russia) 11 (The 46 United 1 (South 1 (South 100 United Kingdom) Kingdom) Africa) Africa) 4 (The 1 (Spain) 1 (The United 25 United 11 (Taiwan) 1 (Taiwan) 9 States) States) 1 (The Czech Republic)

1 (The United

Arab

Emirates)

45 (The United 23 (The United Kingdom) 51 Kingdom) 2 (The United 2 (The United States) 100 States) Total 221 51 23 54 50 93 76 21 28

Note:

( ) regions of acquiring medical qualifications

7140 LEGISLATIVE COUNCIL ─ 13 April 2016

Number of candidates who sat and passed the Licensing Examination of MCHK 2012

Exam in Professional Knowledge Proficiency Test in Clinical Examination (Part III) (Part I) Medical English (Part II) Year Number who Number who Number who Number who Number who Number who % % % sat for exam passed sat for exam passed sat for exam passed

2012 8 (Australia) 5 (Australia) 63 1 (Lebanon) 1 (Lebanon) 100 8 (Australia) 7 (Australia) 88 2 (Belgium) 66 (Mainland) 60 (Mainland) 91 1 (Belgium) 1 (Belgium) 100 3 (Canada) 1 (Canada) 33 1 (Philippines) 1 (Philippines) 100 1 (Canada) 1 (India) 1 (Russia) 1 (Russia) 100 1 (India)

6 (Ireland) 2 (Ireland) 33 5 (Taiwan) 4 (Taiwan) 80 4 (Ireland) 3 (Ireland) 75 1 (Israel) 54 (Mainland) 15 (Mainland) 28 1 (Lebanon) 1 (Philippines)

147 (Mainland) 30 (Mainland) 20 1 (South 1 (Myanmar) Africa) 1 (Nepal) 2 (Taiwan)

2 (Pakistan) 32 (The 19 (The 59 United 2 (Philippines) United Kingdom) Kingdom) 3 (Russia) 3 (The 2 (The 8 (Taiwan) 2 (Taiwan) 25 67 United United 1 (The Czech States) States) Republic)

1 (The United Arab

Emirates)

49 (The United 21 (The 43 Kingdom) United Kingdom)

Total 237 61 26 74 67 91 108 47 44

Note:

( ) regions of acquiring medical qualifications

LEGISLATIVE COUNCIL ─ 13 April 2016 7141

Number of candidates who sat and passed the Licensing Examination of MCHK 2013

Exam in Professional Knowledge Proficiency Test in Clinical Examination (Part III) (Part I) Medical English (Part II) Year Number who Number who Number who Number who Number who Number who % % % sat for exam passed sat for exam passed sat for exam passed

2013 7 (Australia) 5 (Australia) 71 2 (Australia) 2 (Australia) 100 6 (Australia) 2 (Australia) 33

1 (Belgium) 1 (Belgium) 100 1 (India) 1 (India) 100 1 (Belgium)

1 (Germany) 1 (Germany) 100 83 (Mainland) 72 (Mainland) 87 1 (Germany) 1 (Germany) 100

2 (India) 1 (Nepal) 1 (Nepal) 100 7 (Ireland) 4 (Ireland) 57

8 (Ireland) 6 (Ireland) 75 3 (Philippines) 3 (Philippines) 100 59 (Mainland) 11 (Mainland) 19

165 (Mainland) 30 (Mainland) 18 1 (Russia) 1 (Russia) 100 1 (Myanmar)

2 (Myanmar) 1 (Myanmar) 50 4 (Taiwan) 3 (Taiwan) 75 1 (Netherlands

2 (Nepal) 19 (The United 19 (The United 100 Antilles)

2 (Pakistan) 1 (Pakistan) 50 Kingdom) Kingdom) 1 (Pakistan)

4 (Philippines) 1 (Philippines) 25 1 (The United 1 (The United 100 2 (Philippines) States) States) 3 (Russia) 1 (Russia) 33 1 (Russia)

1 (South Africa) 1 (South Africa) 1 (South Africa) 100

9 (Taiwan) 4 (Taiwan) 44 6 (Taiwan)

1 (The United 1 (The United 100 1 (The United Arab Arab Arab Emirates) Emirates) Emirates)

70 (The United 48 (The United 52 (The United 69 27 (The United 52 Kingdom) Kingdom) Kingdom) Kingdom) 2 (The United 2 (The United 3 (The United 100 States) States) States)

Total 280 102 36 115 103 90 143 46 32

Note:

( ) regions of acquiring medical qualifications

7142 LEGISLATIVE COUNCIL ─ 13 April 2016

Number of candidates who sat and passed the Licensing Examination of MCHK 2014 (First Sitting)

Exam in Professional Knowledge Proficiency Test in Clinical Examination (Part III) (Part I) Medical English (Part II) Year Number who Number who Number who Number who Number who Number who % % % sat for exam passed sat for exam passed sat for exam passed

2014 2 (Australia) 1 (Australia) 50 1 (Belgium) 1 (Belgium) 100 4 (Australia) 4 (Australia) 100

(First 1 (Belgium) 1 (Indonesia) 1 (Indonesia) 100 1 (Belgium) 1 (Belgium) 100 Sitting) 1 (India) 14 (Mainland) 8 (Mainland) 57 3 (Ireland) 3 (Ireland) 100

1 (Indonesia) 2 (Pakistan) 2 (Pakistan) 100 44 (Mainland) 20 (Mainland) 45

1 (Ireland) 1 (Philippines) 1 (Philippines) 100 1 (Nepal)

63 (Mainland) 14 (Mainland) 22 1 (Portugal) 1 (Portugal) 100 1 (Netherlands 1 (Netherlands 100

1 (Nepal) 1 (Nepal) 100 1 (Russia) 1 (Russia) 100 Antilles) Antilles)

1 (New Zealand) 1 (Singapore) 1 (Singapore) 100 5 (Taiwan) 2 (Taiwan) 40

2 (Pakistan) 2 (Taiwan) 2 (Taiwan) 100 1 (The United Arab 1 (Philippines) 1 (Ukraine) 1 (Ukraine) 100 Emirates) 1 (Portugal) 1 (Portugal) 100 3 (The United 3 (The United 100 23 (The United 1 (Russia) Kingdom) Kingdom) 14 (The United 61 Kingdom) Kingdom) 1 (Singapore) 2 (The United 1 (The United 1 (South Africa) 50 States) States) 3 (Taiwan) 2 (Taiwan) 67

1 (Ukraine)

24 (The United 6 (The United 25

Kingdom) Kingdom)

1 (The United

States)

Total 107 25 23 28 22 79 85 46 54

Note:

( ) regions of acquiring medical qualifications

LEGISLATIVE COUNCIL ─ 13 April 2016 7143

Number of candidates who sat and passed the Licensing Examination of MCHK 2014 (Second Sitting)

Exam in Professional Knowledge Proficiency Test in Clinical Examination (Part III) (Part I) Medical English (Part II) Year Number who Number who Number who Number who Number who Number who % % % sat for exam passed sat for exam passed sat for exam passed

2014 4 (Australia) 1 (Australia) 25 2 (Australia) 2 (Australia) 100 2 (Ireland) 2 (Ireland) 100

(Second 1 (Belgium) 1 (Ireland) 1 (Ireland) 100 39 (Mainland) 18 (Mainland) 46

Sitting) 2 (India) 54 (Mainland) 35 (Mainland) 65 1 (Myanmar)

7 (Ireland) 2 (Ireland) 29 1 (Russia) 1 (Russia) 100 1 (Nepal)

128 (Mainland) 18 (Mainland) 14 2 (Singapore) 2 (Singapore) 100 2 (Taiwan)

1 (Nepal) 1 (Sweden) 1 (Sweden) 100 1 (The

1 (Pakistan) 2 (Taiwan) 2 (Taiwan) 100 United Arab 3 (Russia) 13 (The 13 (The 100 Emirates) 3 (Singapore) 2 (Singapore) 67 United United Kingdom) Kingdom) 21 (The 1 (South 7 (The 33 United 1 (The 1 (The Africa) 100 United Kingdom) United United Kingdom) 1 (Sweden) States) States) 3 (The 3 (Taiwan) 1 (The 1 (Taiwan) 33 United 33 United 42 (The 11 (The 26 States) States) United United Kingdom) Kingdom) 3 (The United States)

Total 200 35 18 77 58 75 70 28 40

Note:

( ) regions of acquiring medical qualifications

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Number of candidates who sat and passed the Licensing Examination of MCHK 2015 (First Sitting)

Exam in Professional Knowledge Proficiency Test in Clinical Examination (Part III) (Part I) Medical English (Part II) Year Number who Number who Number who Number who Number who Number who % % % sat for exam passed sat for exam passed sat for exam passed

2015 2 (Australia) 2 (Australia) 2 (Australia) 100 2 (Ireland) 2 (Ireland) 100

(First 1 (Colombia) 1 (Colombia) 1 (Colombia) 100 29 (Mainland) 8 (Mainland) 28 Sitting) 4 (India) 2 (India) 1 (India) 50 1 (Nepal)

5 (Ireland) 2 (Ireland) 40 1 (Japan) 1 (Japan) 100 1 (Russia)

1 (Japan) 21 (Mainland) 11 (Mainland) 52 1 (Singapore) 1 (Singapore) 100

62 (Mainland) 4 (Mainland) 6 1 (Netherlands) 1 (Netherlands) 100 6 (Taiwan) 1 (Taiwan) 17

1 (Netherlands) 1 (New Zealand) 1 (New Zealand) 100 1 (The United

2 (New Zealand) 1 (Pakistan) 1 (Pakistan) 100 Arab Emirates) 1 (Pakistan) 1 (Philippines) 1 (Philippines) 100 18 (The United 1 (Philippines) 1 (Russia) 1 (Russia) 100 11 (The United 61 Kingdom) 1 (Poland) 1 (Switzerland) 1 (Switzerland) 100 Kingdom) 3 (The United 3 (Russia) 2 (Russia) 67 2 (Taiwan) 1 (Taiwan) 50 1 (The United 33 States) States) 1 (Switzerland) 5 (The United 5 (The United 100

4 (Taiwan) Kingdom) Kingdom)

29 (The 7 (The 24 2 (The United 2 (The United 100 States) States) United United Kingdom) Kingdom) 3 (The 3 (The United 100 States) United States)

Total 121 18 15 42 30 71 62 24 39

Note:

( ) regions of acquiring medical qualifications

LEGISLATIVE COUNCIL ─ 13 April 2016 7145

Number of candidates who sat and passed the Licensing Examination of MCHK 2015 (Second Sitting)

Exam in Professional Knowledge Proficiency Test in Clinical Examination (Part III) (Part I) Medical English (Part II) Year Number who Number who Number who Number who Number who Number who % % % sat for exam passed sat for exam passed sat for exam passed 2015 2 (Australia) 1 (Australia) 50 43 (Mainland) 37 (Mainland) 86 1 (Australia) (Second 7 (Ireland) 2 (Ireland) 29 1 (Myanmar) 1 (Myanmar) 100 2 (Ireland) 1 (Ireland) 50 Sitting) 113 (Mainland) 22 (Mainland) 19 1 (Pakistan) 1 (Pakistan) 100 37 (Mainland) 6 (Mainland) 16 1 (Myanmar) 1 (Philippines) 1 (Philippines) 100 1 (Myanmar) 1 (Netherlands) 1 (Russia) 1 (Russia) 100 1 (Nepal) 3 (Pakistan) 3 (Taiwan) 3 (Taiwan) 100 1 (Pakistan) 2 (Philippines) 6 (The United 6 (The United 100 2 (Russia) 1 (Poland) Kingdom) Kingdom) 1 (Taiwan) 1 (Taiwan) 100 1 (Russia) 18 (The 7 (The 39 1 (Singapore) United United 1 (South Africa) Kingdom) Kingdom) 6 (Taiwan) 2 (The 1 (The 50 36 (The 15 (The 42 United United United United States) States) Kingdom) Kingdom) 1 (The United 1 (The 100 States) United States) Total 176 41 23 56 50 89 66 16 24

Note:

( ) regions of acquiring medical qualifications

Light Refreshment Kiosks Under Leisure and Cultural Services Department

16. MR JAMES TO (in Chinese): President, according to the information on the web site of the Leisure and Cultural Services Department (LCSD), members of the public or organizations may bid for permits to conduct light refreshment business (permits) at light refreshment kiosks (kiosks) under LCSD. LCSD will enter into agreements with the successful bidders of the permits (agreements). However, it has been reported that LCSD has left some of these kiosks vacant for a long time without putting them up for bidding, which is a waste of public resources. In this connection, will the Government inform this Council:

(1) of the current number of LCSD sites on which kiosks have been built, with a tabulated breakdown by District Council (DC) district; the current vacancy rate of such kiosks, together with a tabulated 7146 LEGISLATIVE COUNCIL ─ 13 April 2016

breakdown of the number of vacant kiosks by DC district and the number of years for which they have been left vacant (i.e. less than three years, three years to less than five years, five years to less than 10 years, and 10 years or more);

(2) of the tendering procedures for and the validity periods of the permits in general; whether, when the validity period of a permit will soon expire, the original holder has a priority right to be granted a new permit, and the penalties to be imposed on permit holders who fail to operate the kiosks in accordance with the business hours stipulated in the agreements;

(3) of the respective numbers of cases in each of the past three years in which the permit holders and LCSD requested to terminate the agreements within the validity period of the agreements, with a tabulated breakdown by reason for the termination of the agreement;

(4) whether, before conducting an open tender, LCSD will invite certain individuals or organizations to submit quotations for those kiosks in respect of which the permits will soon expire; if so, whether LCSD will proceed with the open tender process under the circumstances in which quotations have been received; if so, of the details; if not, the reasons for that; and

(5) whether LCSD will convert the sites the kiosks on which have been left vacant for a long time for other uses; if so, for how long after the kiosks have been left vacant will LCSD do so; if not, of the reasons for that?

SECRETARY FOR HOME AFFAIRS (in Chinese): President, my reply to the questions raised by Mr James TO is as follows:

(1) The information regarding the services provided by light refreshment kiosks under the Leisure and Cultural Services Department (LCSD) is tabulated below:

LEGISLATIVE COUNCIL ─ 13 April 2016 7147

Duration of vacancy Number Number Less More of Three Five District of than than vacant to five to 10 kiosks three 10 kiosks years years years years Hong Kong Island Central and Western 5 0 Eastern 11 0 Not Applicable Southern 11 0 Wan Chai 25 0 Kowloon Kowloon City 9 1 1 Kwun Tong 4 0 Sham Shui Po 7 0 Not Applicable Wong Tai Sin 5 0 Yau Tsim Mong 3 1 1 New Territories Islands 4 0 Kwai Tsing 4 2 2 North 1 0 Sai Kung 9 0 Not Applicable Sha Tin 7 0 Tai Po 5 0 Tsuen Wan 5 1 1 Tuen Mun 7 0 Yuen Long 5 1 1 Total: 127 6 4 2 - - Vacancy Rate: 4.7%

(2) The validity period of a contract for operating a light refreshment kiosk is usually three years. The existing operator of a kiosk does not have priority in renewing the contract. Contracts for operating kiosks will be available for bidding by eligible individuals or organizations through invitation for quotation or open tender. A tenant who fails to operate his/her kiosk in accordance with the business hours stipulated in the contract during the validity period of the contract will be advised or warned by the LCSD to make improvement. Should the breach persist, the LCSD may consider suspending his/her business or terminating the contract pursuant to its terms.

(3) The respective numbers of cases in which light refreshment kiosks ceased operation before the expiry of their contracts and the LCSD 7148 LEGISLATIVE COUNCIL ─ 13 April 2016

requested termination of light refreshment kiosk service contracts within the contract period in the past three years are set out below:

Party Number of Contract(s) Requesting Reason 2013- 2014- 2015- Total Termination 2014 2015 2016 Permit Contracts terminated 7 7 5 19 Holder by permit holders who, for personal or business reasons, served six months' prior notice in writing on the Government Representative in accordance with the contract terms. LCSD Contracts dissolved by 1 2 0 3 the failure of the permit holder to pay the sums payable under the agreements. Contract terminated by 0 1 0 1 the death of the permit holder. Contract terminated for 0 0 1 1 persistent breaches of the agreement by the permit holder, including using the permit area for purposes other than those permitted by the agreement, receiving charges or fees other than those permitted by the agreement from persons for admission to the permit area, and carrying out publicity activities without the permission of the Government Representative. Total: 24

LEGISLATIVE COUNCIL ─ 13 April 2016 7149

(4) Following the established procurement procedures of the Government, the LCSD invites eligible individuals or organizations to bid for contracts for operating light refreshment kiosks, fast food kiosks or restaurants at the LCSD venues through invitation for quotation or open tender, and assesses their quotation and tender accordingly. The LCSD will have copies of the notice of invitation for quotation or tender of the new contract uploaded to its website, posted at the leisure venue where the kiosk is located and issued to the existing operator about four to six months before the current contract ends. Individuals or organizations interested in bidding for the contract are required to submit their quotation or tender together with relevant documents before the specified date in accordance with the requirements set out in the quotation or tender documents. Each quotation or tender submitted will be assessed by the relevant quotation or tender assessment panel according to established procedures. The panel will then make recommendations to the relevant tender board or authorized persons to accept a conforming quotation or tender.

(5) Under the existing procedures, the LCSD will conduct two open tender exercises consecutively for vacant food premises (such as light refreshment kiosks). For premises that are not successfully let out, the LCSD will make a third attempt by revising the term(s) of the contract to attract more bidders. If the food premises still cannot be let out, the LCSD will consider converting the premises to other uses such as storeroom. The LCSD has not set a time frame for changing the use of food premises.

Green Minibus Routes Running to and from Public Hospitals

17. MISS ALICE MAK (in Chinese): President, in Hong Kong, quite a number of public hospitals were built on hillsides and are not accessible by franchised buses. Members of the public visiting those hospitals mostly use green minibus feeder service after taking a franchised bus or railway trip. However, some members of the public have relayed to me that both the frequencies and coverage of the relevant green minibus routes are insufficient to meet demands, thus causing inconvenience to members of the public (especially frail patients and the elderly). Regarding the green minibus routes running to and from various public hospitals, will the Government inform this Council:

7150 LEGISLATIVE COUNCIL ─ 13 April 2016

(1) of the details of the various minibus routes, including the route numbers, their coverage, frequencies, fares and the names of the operators concerned (broken down by the name of public hospital);

(2) of the current average daily boardings and occupancy rates of each minibus route; whether the authorities have regularly reviewed the service level of the minibus routes, including their frequencies, occupancy rates and coverage; if they have, of the details of the reviews and the date on which the last review was conducted;

(3) given that quite a number of patients who need to use wheelchairs ride on such minibuses, whether the authorities will require the operators concerned to arrange minibuses providing access for wheelchairs and spaces for parking wheelchairs to ply such routes, and set up more direct minibus routes to public hospitals; if they will, of the details; if not, the reasons for that; and

(4) given that there will be public hospitals completed or redeveloped successively in the next few years and the ageing population will cause the number of persons seeking consultation to rise, whether the authorities will conduct a comprehensive review of the public transport services for various public hospitals?

SECRETARY FOR TRANSPORT AND HOUSING (in Chinese): President, my consolidated reply to the various parts of Miss Alice MAK's question is as follows:

Within the public transport network, public light buses (PLBs) primarily play the role of providing supplementary feeder service and serving areas with relatively lower passenger demand or where the use of high-capacity transport modes is not suitable. Public hospitals are one of the major community facilities served by green minibuses (GMBs). Some public hospitals are mainly served by GMBs while some others are served by direct services provided by a variety of public transport modes. At present, of about 500 GMB routes, 104 routes can serve public hospitals and 33 of which have their terminating points at public hospitals. The details of the 104 GMB routes are at the Annex. Depending on the service hour, frequency, area served and hospital size, these routes have an LEGISLATIVE COUNCIL ─ 13 April 2016 7151 average daily patronage ranging from several dozens to over 10 000 passengers. These GMBs also have varying occupancy rates. With an average at 50%, the rate can be as high as 80% or as low as about 20%. In view of this situation, it is the established practice of the Transport Department (TD) to group appropriate routes into route packages having regard to such factors as service area and patronage. This bundling arrangement ensures that GMB service can meet the needs of the community and no routes with unsatisfactory returns will be left without an operator.

It is the practice for the TD to conduct service surveys covering all GMB routes every one to two years. Ad hoc service surveys on individual routes will also be carried out from time to time where necessary. Meanwhile, the TD requires GMB operators to submit operating data regularly to monitor the situation of various GMB routes. The department will also assess the adequacy of service level from time to time in the light of the latest development of areas served by individual routes (such as completion of new facilities and intake of residents for new housing estates). Based on the monitoring and survey results, the TD, in collaboration with the operators, will take measures to cater for passenger needs. Such measures include revising and reorganizing GMB routes, introducing short-haul or supplementary routes (such as short-haul routes terminating at hospitals), adjusting distribution of vehicles, and revising service timetable, and so on.

As for GMB routes serving public hospitals, the number of routes and the level of service are set based on the number of people travelling to and from the hospitals. The TD will adjust service and consider introducing new direct routes to public hospitals having regard to actual circumstances. Recent examples include the introduction of two new GMB routes 813 and 813A to tie in with the intake of residents for Shui Chuen O Estate in 2015. These routes set off from Shui Chuen O and pass by Prince of Wales Hospital with one of them terminating at Shatin Hospital. Moreover, a new GMB route, which runs from On Tat Estate to Jordon Valley via United Christian Hospital, will be introduced from the second quarter of 2016 to tie in with the intake of residents for the housing development at Anderson Road.

The design of PLBs being used at the moment is not suitable for use by wheelchair-bound passengers as ramp or lifting facility necessary for wheelchair boarding is not provided. Retrofitting would have to overcome considerable 7152 LEGISLATIVE COUNCIL ─ 13 April 2016 technical, service and operational difficulties and is thus not feasible. A more practical approach is to search for low-floor wheelchair-accessible models suitable for use in Hong Kong. If such model(s) can be identified, a trial can be carried out to determine the feasibility of putting them to serve suitable routes. This exercise will be conducted in tandem with the review of the role and positioning of PLBs under the Public Transport Strategy Study (PTSS). The whole PTSS is expected to be completed by mid-2017.

Meanwhile, as the use of wheelchair-accessible low-floor franchised buses is increasingly common(1), the TD is studying with franchised bus companies the feasibility of using such buses, equipped with other facilities/arrangements that can facilitate passengers (for example, additional handrails), to provide new service or enhance existing service to and from public hospitals. Subject to the findings, the arrangement can be implemented in around two years.

Furthermore, the Government will explore with franchised bus companies the feasibility of providing two wheelchair parking spaces in the bus compartment of certain routes (such as hospital routes). In doing so, due consideration would need to be given to whether the existing models can fit more than one wheelchair parking space, and the impact on the number and location of priority seats, and so on.

Apart from GMBs and franchised buses, people travelling to public hospitals may consider using taxi and Rehabus services. Some taxis are already wheelchair-accessible and provide hire-as-a-whole service. Rehabus service subsidized by the Labour and Welfare Bureau provides telephone booking service and four feeder routes to and from hospitals, clinics and railway stations.

It is our policy to provide users of public hospitals with various public transport services to cater for the different needs. Upon completion of the development or redevelopment of public hospitals, relevant government departments will, based on the increased demand, review the public transport service arrangements according to planning standard so as to address the needs of members of the public.

(1) Based on the latest bus replacement programme, all buses (except for some serving South Lantau which are constrained by the terrain) are expected to be of wheelchair-accessible low-floor design by 2017. LEGISLATIVE COUNCIL ─ 13 April 2016 7153

Annex

GMB routes serving public hospitals

Terminating Full Route Origins and Frequency at or en route fareNote Operator number destinations (minutes) public ($) hospitals Tsan Yuk Hospital Kwun Lung Lau ― Sai I Sun Green 12 Ying Pun (Circular 6-10 4.7 En route Minibus Co route) Ltd Western District (First Aberdeen 45A Street) ― Conduit 8-15 5.2 En route Maxicab Road (Circular route) Service Co Ltd Ruttonjee Hospital and Tang Shiu Kin Hospital Admiralty Station (Drake Street) ― Shiu Perfect Gold 24A 15-25 4.8 En route Fai Terrace (Circular Co Ltd route) Admiralty Station Perfect Gold 24M (Drake Street) ― 15-20 6.8 En route Co Ltd Mount Butler Mid-levels (Robinson Kit Kee 56 Road) ― North Point 6-15 9.2 En route Transport Co (Marble Road) Ltd Mid-levels (Robinson Kit Kee 56A Road) ― Causeway 6-10 9.2 En route Transport Co Bay (Circular route) Ltd Pamela Youde Nethersole Eastern Hospital Five Chung Hom Kok departures Manhattan 16A (Cheshire Home) ― in each 12.2 En route Resources Ltd Chai Wan Station direction each day Ma Hang/Chung Hom Manhattan 16M Kok ― Chai Wan 15 12.2 En route Resources Ltd Station 7154 LEGISLATIVE COUNCIL ─ 13 April 2016

Terminating Full Route Origins and Frequency at or en route fareNote Operator number destinations (minutes) public ($) hospitals Stanley Beach Road ― Manhattan 16X 15 9.0 En route Chai Wan Station Resources Ltd Chai Wan Industrial City ― Sai Wan Ho Manhattan 20 (Grand Promenade) 6-12 5.9 En route Resources Ltd Public Transport Terminus Siu Sai Wan Phase III ― Pamela Youde Peace Base Terminating 47E Nethersole Eastern 20 6.6 Investments point Hospital (Circular Ltd route) Chai Wan Station (Lee Chung Street) ― Peace Base Terminating 48M Pamela Youde 3-10 3.3 Investments point Nethersole Eastern Ltd Hospital Pamela Youde Nethersole Eastern Terminating Wing Lee 65 5-8 6.4 Hospital ― North Point point Motor Co Ltd (Fort Street) Chai Wan (Hong Man Wing Lee 65A Street) ― Quarry Bay 12-15 6.4 En route Motor Co Ltd (Circular route) Aldrich Bay ― Chai Fastlink 66 Wan (Wan Tsui Road) 8-10 6.0 En route Transportation (Circular route) Ltd Aldrich Bay ― Pamela Fastlink Youde Nethersole Terminating 66A 8 6.0 Transportation Eastern Hospital point Ltd (Circular route) LEGISLATIVE COUNCIL ─ 13 April 2016 7155

Terminating Full Route Origins and Frequency at or en route fareNote Operator number destinations (minutes) public ($) hospitals Wong Chuk Hang Hospital Ap Lei Chau (Ping Lan Street) ― Wan Chai Wong Chuk (Stewart Road) (service Hang Light 36 60 8.5 En route provided during Bus Services morning peak period Co Ltd only) Grantham Hospital Aberdeen (Nam Ning Aberdeen 5 Street) ― Causeway 7-15 7.8 En route Maxicab Bay (Lockhart Road) Service Co Ltd Queen Mary Hospital Baguio Villas (Lower) Aberdeen 8 ― Central (Exchange 10-12 8.3 En route Maxicab Square) Service Co Ltd Baguio Villas (Lower) Aberdeen 8X ― Central (Exchange 10 8.3 En route Maxicab Square) Service Co Ltd Sun Cheong Pok Fu Lam Gardens Transportation 22 ― Central (Exchange 6-12 7.5 En route Hong Kong Co Square) Ltd Sun Cheong Pok Fu Lam Gardens Transportation 22S 10-25 7.5 En route ― Central Ferry Piers Hong Kong Co Ltd Sun Cheong Pok Fu Lam Gardens Transportation 22X 10-15 7.5 En route ― Central Ferry Piers Hong Kong Co Ltd Sun Cheong Kennedy Town Station Transportation 23 ― Pok Fu Lam 4-5 5.5 En route Hong Kong Co (Circular route) Ltd 7156 LEGISLATIVE COUNCIL ─ 13 April 2016

Terminating Full Route Origins and Frequency at or en route fareNote Operator number destinations (minutes) public ($) hospitals Sun Cheong Chi Fu Fa Yuen ― Transportation 23M 12-13 5.5 En route Kennedy Town Station Hong Kong Co Ltd Tin Wan Estate ― Hong Kong 31 Causeway Bay (Jaffe 10-15 10.0 En route Maxicab Ltd Road) Tin Wan Estate ― Hong Kong 31X Causeway Bay (Jaffe 30 10.0 En route Maxicab Ltd Road) Central (Ferry Piers) ― Terminating Central 54 Queen Mary Hospital 8-10 7.0 point Maxicab Ltd (Circular route) Kennedy Town Station Terminating Central 54M ― Queen Mary 12-20 5.3 point Maxicab Ltd Hospital Queen Mary Hospital ― Central Station Terminating Central 55 (Connaught Road 5-20 7.0 point Maxicab Ltd Central) (Circular route) Aberdeen South Horizons ― Terminating 63 5-15 6.3 Maxicab Queen Mary Hospital point Service Co Ltd The Duchess of Kent Children's Hospital at Sandy Bay and Tung Wah Group of Hospitals Fung Yiu King Hospital Aberdeen (Wu Nam Sunning 58 Street) ― Kennedy 4-15 6.5 En route Transportation Town Station Ltd Aberdeen (Wu Nam Sunning 58A Street) ― Kennedy 30 6.5 En route Transportation Town Station Ltd LEGISLATIVE COUNCIL ─ 13 April 2016 7157

Terminating Full Route Origins and Frequency at or en route fareNote Operator number destinations (minutes) public ($) hospitals Kennedy Town Station Sunning ― Shum Wan Road 59 12-20 7.4 En route Transportation Public Transport Ltd Terminus Ruttonjee Hospital, Tang Shiu Kin Hospital and Queen Mary Hospital Baguio Villa (Upper) General Elite 28 ― Causeway Bay (Sun 6-15 10.0 En route Ltd Wui Road) Baguio Villa (Upper) General Elite 28S ― Causeway Bay (Sun 20 10.0 En route Ltd Wui Road) Queen Mary Hospital, The Duchess of Kent Children's Hospital at Sandy Bay and Tung Wah Group of Hospitals Fung Yiu King Hospital Causeway Bay (Jaffe Road) ― Cyberport Hong Kong 10 10-20 11.5 En route Public Transport Maxicab Ltd Interchange Causeway Bay (Jaffe Road) ― Cyberport Hong Kong 10P 30 11.5 En route Public Transport Maxicab Ltd Interchange Queen Elizabeth Hospital Jordan Station (Nanking Street) ― Terminating 57M 5-15 3.8 Cantel Ltd Queen Elizabeth point Hospital Kwong Wah Hospital Tai Kok Tsui (Cherry Street) ― Mong Kok Central 12S 10-15 4.9 En route East Station (Circular Venture Ltd route) Kowloon Station ― Max Power 74 Mong Kok (Luen Wan 10-12 7.0 En route Minibus Ltd Street) (Circular route) 7158 LEGISLATIVE COUNCIL ─ 13 April 2016

Terminating Full Route Origins and Frequency at or en route fareNote Operator number destinations (minutes) public ($) hospitals Kowloon Station ― Ho Max Power 74S Man Tin Hill Road 12-20 7.0 En route Minibus Ltd (Circular route) Caritas Medical Centre Cheng Kee Caritas Medical Centre Terminating Public Light 45M ― Sham Shui Po (Ki 7-15 3.9 point Bus & Taxi Co Lung Street) Ltd Hong Kong Eye Hospital and Kowloon Hospital Kowloon Hospital ― Terminating 17M Prince Edward Station 7-8 4.5 Fine Luck Ltd point (Circular route) Hong Kong Buddhist Hospital Kowloon Tong Sea Dragon (Broadcast Drive) ― 13 10-15 7.5 En route Maxicab Hung Hom Ferry Service Co Ltd Concourse San Po Kong (The Latitude) ― Festival Good Country 85 8-15 7.0 En route Walk Public Transport Ltd Terminus Our Lady of Maryknoll Hospital San Po Kong ― Tsz Win Top 20 Wan Shan (North) 8-15 4.8 En route Services Ltd (Circular route) Brilliant Way Wong Tai Sin Station Public Light 37A ― Tsz Wan Shan 4-15 3.8 En route Bus (North) (Scheduled) Service Co Ltd Brilliant Way Wong Tai Sin Station Public Light 37M ― Tsz Man Estate 1-6 3.8 En route Bus (Circular route) (Scheduled) Service Co Ltd LEGISLATIVE COUNCIL ─ 13 April 2016 7159

Terminating Full Route Origins and Frequency at or en route fareNote Operator number destinations (minutes) public ($) hospitals Our Lady of Maryknoll Hospital and Tung Wah Group of Hospitals Wong Tai Sin Hospital Wong Tai Sin Station Peak Scene 18M ― Tsz Wan Shan 6 3.6 En route Ltd (North) Tsz Wan Shan (South) Yau Man 65 20-30 3.6 En route ― Chuk Yuen Investment Ltd Festival Walk Public Main River Transport Terminus ― 73 8-12 6.5 En route Transportation Tsz Wan Shan Centre Ltd (Circular route) United Christian Hospital United Christian Fasty Hospital ― Kwun Terminating 50 8 3.3 Transportation Tong (Yue Man point Ltd Square) (Circular route) Kwong Tin ― United Sky Team Terminating 76A Christian Hospital 10-15 5.1 Transportation point (Circular route) Ltd United Christian Sky Team Hospital ― Yau Tong Terminating 76B 12-30 5.1 Transportation Public Transport point Ltd Interchange Haven of Hope Hospital Kwun Tong (Tung Yan Lee Keung 13 Street) ― Hong Sing 15-23 5.8 En route Enterprises Ltd Garden Haven of Hope Tung Wan Hospital ― Po Lam Public Light Terminating 107 Public Transport 15-20 4.0 Bus point Interchange (Circular (Scheduled) route) Service Co Ltd 7160 LEGISLATIVE COUNCIL ─ 13 April 2016

Terminating Full Route Origins and Frequency at or en route fareNote Operator number destinations (minutes) public ($) hospitals Tseung Kwan O Hospital Choi Hung Station Merry Dragon 11 (Lung Cheung Road) 3-15 6.6 En route Ltd ― Hang Hau Village The Hong Kong University of Science and Technology ― Merry Dragon 11M 3-10 4.8 En route Hang Hau Station Ltd Public Transport Interchange Choi Hung Station (Lung Cheung Road) Merry Dragon 11S 15-50 7.9 En route ― Po Lam (overnight Ltd service) Saraluck Hang Hau (North) ― Terminating 15 5-15 4.3 Investments Hong Sing Garden point Ltd Saraluck Hang Hau (North) ― Terminating 15A 12-14 4.3 Investments Verbena Heights point Ltd Saraluck 16 Po Lam ― Po Toi O 12-30 8.8 En route Investments Ltd Hang Hau (North) ― Causeway Bay Terminating City Joy 19S 15 21.0 (Circular route) point Investment Ltd (overnight service) Hang Hau Station ― Yan Yan Ho 101M Sai Kung (Wai Man 3-30 9.0 En route Motors Ltd Road) Clear Water Bay ― Fonsilk 103 10-20 9.6 En route Kwun Tong Ferry Pier Investment Ltd Clear Water Bay ― Tseung Kwan O Station Fonsilk 103M 7-20 8.5 En route Public Transport Investment Ltd Interchange LEGISLATIVE COUNCIL ─ 13 April 2016 7161

Terminating Full Route Origins and Frequency at or en route fareNote Operator number destinations (minutes) public ($) hospitals Haven of Hope Hospital and Tseung Kwan O Hospital Choi Ming Public City Joy 108A Transport Interchange 6-15 4.8 En route Investment Ltd ― Hang Hau (North) Prince of Wales Hospital Kwong Yuen ― Hin Kwok Chung 804 5-6 5.2 En route Keng Motor Car Ltd Sui Wo Court ― Yu 811 8 6.6 En route Himwell Ltd Chui Court Greenwood Terrace ― 811A 20-30 8.1 En route Himwell Ltd (Circular route) Rock Smart Shui Chuen O ― Shek 813 10-25 4.8 En route Development Mun Station Ltd Shatin Hospital Hung Kei A Kung Kok ― Sha 67K 10-20 5.1 En route Maxicab Co Tin Station Ltd Yiu On ― Mingfame 801 (Cheung Lek Mei 15-30 8.7 En route Transportation Street) (Circular route) Ltd Kwok Chung 803 Hin Keng ― Lee On 5-15 7.2 En route Motor Car Ltd Kam Ying Court ― Kwok Chung 805S Mong Kok (overnight 5-12 14.8 En route Motor Car Ltd service) Yiu On ― Fo Tan Three (Cheung Lek Mei departures Street) (service Crown Score 808A from Yiu 8.7 En route provided during Industries Ltd On each morning peak period day only) 7162 LEGISLATIVE COUNCIL ─ 13 April 2016

Terminating Full Route Origins and Frequency at or en route fareNote Operator number destinations (minutes) public ($) hospitals Sha Tin Central ― Ma Champion 810 On Shan (Villa Athena) 6-15 5.9 En route Legend Ltd (Circular route) Sui Wo Court Phase I ― Yiu On (Hang Hong Street) (Circular route) 811S 20-30 8.8 En route Himwell Ltd (service provided during morning peak period only) Prince of Wales Hospital and Shatin Hospital Kam Ying Court ― Terminating Crown Score 808 Prince of Wales 6-8 6.5 point Industries Ltd Hospital Heng On Bus Terminus Terminating Crown Score 808P ― Prince of Wales 10-15 6.5 point Industries Ltd Hospital Terminating at Shatin Shui Chuen O ― Rock Smart Hospital, en 813A Shatin Hospital 15-25 4.8 Development route Prince (Circular route) Ltd of Wales Hospital Alice Ho Miu Ling Nethersole Hospital and Tai Po Hospital Tai Po Market Station Tai Po (Fixed ― Tai Po Nethersole Terminating Route) Public 20A 8-15 5.4 Hospital (Circular point Light Bus Co route) Ltd Tai Po (Fixed Tai Po Market Station Terminating Route) Public 20X ― Tai Po Nethersole 10-15 5.4 point Light Bus Co Hospital Ltd LEGISLATIVE COUNCIL ─ 13 April 2016 7163

Terminating Full Route Origins and Frequency at or en route fareNote Operator number destinations (minutes) public ($) hospitals Alice Ho Miu Ling Nethersole Hospital, Tai Po Hospital and North District Hospital Terminating at Tai Po Nethersole Tai Po Nethersole Hospital and Ng Lok & 502 Hospital ― Ching Ho 12-15 12.0 Tai Po Sons Co Ltd Estate Hospital, en route North District Hospital Kwai Chung Hospital and Princess Margaret Hospital Mei Foo ― Kwai Two Chung Hospital (one departures departure in each Terminating Ho King Hoo 90A in each 4.0 direction during point Ltd direction morning peak period each day and in the afternoon) Mei Foo ― Princess Terminating Ho King Hoo 90P 6-20 4.0 Margaret Hospital point Ltd Good View Lai King Headland ― Maxicab 90M 4-6 5.2 En route Management (Circular route) Ltd Good View Wah Yuen Chuen ― Maxicab 92M Mei Foo Station 5-10 5.2 En route Management (Circular route) Ltd Tsuen Wan (Tso Kung King On Terminating 313 Street) ― Princess 6-11 7.9 Transportation point Margaret Hospital Ltd 7164 LEGISLATIVE COUNCIL ─ 13 April 2016

Terminating Full Route Origins and Frequency at or en route fareNote Operator number destinations (minutes) public ($) hospitals Fu Wan Public Cheung Wang ― Terminating Light Bus 407 Princess Margaret 5-10 9.0 point (Scheduled) Hospital Service Co Ltd Kwai Fong Station Fu Wan Public (Hing Ning Road) ― Terminating Light Bus 407A 7-15 4.7 Princess Margaret point (Scheduled) Hospital Service Co Ltd Princess Margaret Terminating Extra Billion 410 Hospital ― Northeast 15-30 8.7 point Investment Ltd Kwai Chung Yan Chai Hospital Hong Kong Garden ― Loadwin 302 Kwai Fong (Circular 5-8 8.8 En route Industrial Ltd route) Tsing Yi Ferry Pier ― Min Kee 401 7-10 6.3 En route Shek Yam Motors Co Ltd Tsing Yi (Cheung Hang) ― Tsuen Wan 409 10-12 6.2 En route Kam Jet Ltd (Tsuen Wan Market Street) (Circular route) Tuen Mun Hospital Tsing Chuen Wai ― Sun Power 42 Tuen Mun Town 13-15 5.0 En route International Centre (Circular route) Investment Ltd Public Transport Express Top 44A 2-9 15.2 En route Interchange ― Sheung Industries Ltd Shui Station LEGISLATIVE COUNCIL ─ 13 April 2016 7165

Terminating Full Route Origins and Frequency at or en route fareNote Operator number destinations (minutes) public ($) hospitals Lok Ma Chau (San Tin) Public Transport Interchange ― Tuen Express Top 44B Mun Station Public 15-20 18.0 En route Industries Ltd Transport Interchange (overnight service included) Tuen Mun Siu Hong Express Top 49S Court ― Wan Chai 10-15 24.0 En route Industries Ltd (overnight service) Tin Shui Wai (Tin Shui Sun Power Estate) ― Tsim Sha 610S 12-15 23.0 En route International Tsui (Haiphong Road) Investment Ltd (overnight service) Pok Oi Hospital Tin Shui Wai North Terminating Extra Billion 77A (Grandeur Terrace) ― 15-20 7.2 point Investment Ltd Pok Oi Hospital Tin Shui Wai Town Terminating Extra Billion 77B Centre ― Pok Oi 6-12 7.2 point Investment Ltd Hospital Yuen Long Stadium ― Sun Power Terminating 609 Pok Oi Hospital 10-15 4.7 International point (Circular route) Investment Ltd

Note:

With the exception of hk Island Route Nos 24A, 48M, 54M, Kowloon Route Nos 57M, 45M, 17M, 37A, 37M, 18M, 50 and New Territories Route Nos 107, 11M, 11S, 805S, 808A, 20X, 90A, 90P, 407A, 42, 77A and 609, all other routes offer section fare(s).

7166 LEGISLATIVE COUNCIL ─ 13 April 2016

Illegal Immigrants and Torture/Non-refoulement Claimants

18. MR LEUNG CHE-CHEUNG (in Chinese): President, it has been learnt that the number of people who lodged torture claims/non-refoulement claims under the Convention against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment (the Convention) immediately after entering Hong Kong unlawfully has been on the rise recently. In this connection, will the Government inform this Council:

(1) of the respective numbers of illegal immigrants (IIs) intercepted by the Police in Hong Kong waters and onshore in each of the past 12 months (with a breakdown of their places of origin); whether it knows, among such IIs, the number and percentage of those who entered Hong Kong unlawfully by boat departing from the Mainland, as well as their embarkation locations;

(2) of the major sea routes currently taken by non-ethnic Chinese people when they entered Hong Kong unlawfully, the parts of Hong Kong waters that they pass through en route, and their disembarkation locations;

(3) of a breakdown, by place of origin, of the number of the people who lodged torture claims/non-refoulement claims (claimants) in the past 12 months; whether the authorities have analysed the means through which the claimants entered Hong Kong, and taken measures and actions to intercept them; if they have, of the details;

(4) whether the authorities have made reference to the experience of handling Vietnamese boat people and refugees years ago, and considered setting up open or closed reception centres for such claimants; if not, of the reasons for that; and

(5) whether the authorities have studied if there is any precedent of withdrawal from the Convention; if they have, of the details and outcome of such study?

LEGISLATIVE COUNCIL ─ 13 April 2016 7167

SECRETARY FOR SECURITY (in Chinese): President, foreigners who smuggled themselves into Hong Kong, and visitors who overstayed their limit of stay allowed by the Immigration Department (ImmD) or who were refused entry by the ImmD upon arrival in Hong Kong are liable to be removed from Hong Kong in accordance with the Immigration Ordinance (Cap. 115). To safeguard immigration control and for public interest, they should be removed as soon as practicable.

However, pursuant to multiple court rulings since 2004, if foreigners claim that they would face a risk of being subjected to torture, or cruel, inhuman or degrading treatment or punishment, or persecution in the country of origin, the ImmD cannot remove them there before their claim is determined under procedures that meet with "high standards of fairness".

My replies to the various parts of Mr LEUNG's question are as follows:

(1) and (2)

According to information available to the Police, non-ethnic Chinese illegal immigrants (NECIIs) usually entered the Mainland by land or by air. They would then smuggle into Hong Kong by sea or by land from Guangdong or Shenzhen. At sea, NECIIs mainly travelled through the north-eastern waters of Hong Kong and landed near Sha Tau Kok or Dapeng Bay areas, or through the western waters of Hong Kong and landed near Deep Bay or the Lantau Island.

A breakdown by nationality of NECIIs in 2015 is as follows:

Country Number Vietnam 2 278 Pakistan 686 Bangladesh 414 India 380 Nepal 31 Others 30 Total 3 819

Based on information available to the Police and the ImmD, about 60% of NECIIs smuggled into Hong Kong by sea, and 40% by land.

7168 LEGISLATIVE COUNCIL ─ 13 April 2016

(3) The Unified Screening Mechanism (USM) was implemented since March 2014 to screen non-refoulement claims on all applicable grounds in one go. At end March 2016, there were 11 201 claimants pending screening. Claimants mainly came from south or southeast Asian countries, with Vietnam (22%), India (19%), Pakistan (18%), Bangladesh (12%) and Indonesia (10%) being the top five countries of origin. According to immigration records, 51% of claimants smuggled into Hong Kong, and 47% arrived Hong Kong as visitors but were refused permission to land or subsequently overstayed.

As mentioned above, 51% of non-refoulement claimants are NECIIs who smuggled into Hong Kong. Interception at the source is a key linchpin of the Government's comprehensive review of the strategy of handling non-refoulement claims. The Police have formed a joint investigation team with other law-enforcement agencies (LEAs), including the ImmD and the Customs and Excise Department (C&ED), and have taken a series of actions during the last few months to intercept illegal immigrants (IIs) on land and at sea and to combat human trafficking syndicates.

At sea, the Police deployed additional speedboats to step up patrol at blackspots such as Sha Tau Kok, Dapeng Bay, Deep Bay, and the Lantau waters. Also, in view of the tendency of human smuggling syndicates to attempt to enter Hong Kong waters from midnight to early morning, the Police and the C&ED deployed ships equipped with sophisticated radar systems, including marine patrol launches, sector patrol launches, high speed pursuit crafts, and so on, to enhance capability to detect and intercept IIs before they enter Hong Kong waters. Since early 2016, the Police also conducted over 100 joint operations with the Government Flying Service where marine patrol launches swept the eastern and western waters of Hong Kong with the support of helicopters.

On land, as many NECIIs claimed to have smuggled into Hong Kong inside or under lorry trucks, the Police stepped up patrol at all boundary control points (BCPs). The Police also took joint actions with the ImmD and the C&ED to conduct more spot checks at BCPs on cross-boundary lorry trucks and deployed mobile X-ray vehicle LEGISLATIVE COUNCIL ─ 13 April 2016 7169 scanning systems and carbon dioxide detectors to scan the lorry trucks. At the Lok Ma Chau Control Point, which has the highest traffic flow of lorry trucks, we are going to install more closed-circuit television and additional lighting at the vehicle holding area, and motion sensors on the surrounding fences to prevent IIs from escaping from there before the lorry trucks are subject to immigration examination. The Police and the C&ED have also enhanced publicity with cross-boundary lorry truck drivers to remind them of the serious legal consequences of assisting IIs to smuggle into Hong Kong, and that they should check their lorry truck in detail before entering Hong Kong from the Mainland.

Separately, the Police also stepped up patrol at the frontier area to prevent IIs from seeking to climb over the fences and enter Hong Kong on foot.

LEAs of the Mainland also rendered active assistance to the HKSAR Government to intercept NECIIs in the Mainland before they enter Hong Kong. The Ministry of Public Security has commenced dedicated operations (from February 2016 to end July 2017) and mobilized its Border Control Department and immigration authorities in Guangdong, , Yunnan, and Xinjiang to work jointly with the Hong Kong Police to combat smuggling activities at the Hong Kong-Guangdong boundary by stepping up co-operation on interception, investigation, intelligence exchange and enforcement, in order to combat foreigners smuggling into Hong Kong via the Mainland.

The actions above have produced initial results. From 18 to 20 March 2016, the Border Control Department of Guangdong and the Hong Kong Police took parallel actions at Shenzhen, Huichou, and Hong Kong to bust a group smuggling case, arresting 30 members of a human smuggling syndicate (18 in Guangdong and 12 in Hong Kong) and 121 South-Asian IIs (89 in Guangdong and 32 in Hong Kong). Four ships and a vehicle were seized and the syndicate was neutralized. At the same time, the ImmD also raided multiple locations in Hong Kong and arrested 18 illegal workers and 11 employers suspected to be employing persons who are not lawfully employable.

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In the two months since the dedicated operation commenced, the Border Control Departments at Guangdong, Guangxi, and Yunnan have arrested a total of 2 943 NECIIs and 142 members of human smuggling syndicates. In February and March this year, the number of NECIIs was 292 and 272, representing a respective decrease of 30% and 35% over January. LEAs of the Mainland and Hong Kong will continue to step up enforcement actions to stem the influx of NECIIs.

At the same time, the Government proposes to amend the Immigration (Unauthorized Entrants) Order (Cap. 115D) (the Order) to expand the definition of "unauthorized entrants" to include major source countries where NECIIs originate (in addition to Vietnam), that is, Pakistan, Bangladesh, India, Nepal, Sri Lanka, Somalia, Afghanistan, and Nigeria, so as to immediately enhance the penalties against smuggling of IIs from these countries.

By stepping up enforcement and amending the Order to enhance penalties at the same time, we aim to achieve a sufficient deterrent effect against human smuggling syndicates to reduce smuggling of NECIIs into Hong Kong.

As regards those visitors who lodge non-refoulement claims after overstaying or being refused permission to land (comprising 47% of all claimants), the majority of them are visitors who entered Hong Kong under visa-free arrangements. We are actively developing the details for introducing pre-arrival registration (PAR) to prevent those visitors with a high risk of lodging non-refoulement claims after overstaying or being refused permission to land from boarding their flight in the first place. We aim to commence PAR within this year. The Government will also review visa/visa-free policies having regard to ongoing circumstances.

(4) As regards suggestions that we should draw reference to the experience of handling the Vietnamese boat people crisis in the 1980s and re-introduce closed camps in Hong Kong, the power vested in the Government under the Immigration Ordinance to detain Vietnamese boat people is applicable only to those Vietnamese boat people who arrived Hong Kong before January 1998. Since the LEGISLATIVE COUNCIL ─ 13 April 2016 7171

1980-1990s, the Court has made a number of rulings in relation to the detention of IIs. In particular, the Court of Final Appeal ruled in Ghulam Rbani v the Director of Immigration that the ImmD's power to detain illegal immigrants is subject to the common law Hardial Singh principles, that is, if the ImmD cannot complete the removal procedures (including the screening procedures for non-refoulement claims) to remove him within a reasonable time, then the ImmD cannot continue to detain him. The suggestion also gives rise to other challenges from land and manpower resources perspectives. That being said, we have commenced research into proposals to empower the ImmD to detain more claimants that would conform to legal and operational requirements, so as to deter them from coming to Hong Kong and delaying the removal/screening procedures.

(5) The HKSAR Government introduced the USM for the purposes of complying with the Convention against Torture (the Convention), the Hong Kong Bill of Rights Ordinance (Cap. 383), the Immigration Ordinance (Cap. 115), and the rulings of the Court of Final Appeal. Even if a reservation is made to Article 3 of the Convention or the Convention does not apply to HKSAR, this does not absolve the HKSAR Government from having to screen non-refoulement claims pursuant to the requirements of our laws and court rulings. As such, for the purpose of our comprehensive review, we have no plans to consider such measures as requesting the Central People's Government to declare that the Convention does not apply to the HKSAR or to make a reservation to certain provisions of the Convention.

Regulation of Activities for Soliciting Donations from Public

19. MR IP KWOK-HIM (in Chinese): President, it has been reported that the Hong Kong Indigenous has neither been registered nor exempted from registration under the Societies Ordinance (Cap. 151). It has also not been registered as a body corporate under the Companies Ordinance (Cap. 622). However, it has earlier raised more than $1 million through online open appeals for donations. In addition, the Scholarism announced last month that it would cease operation and would transfer some of the donations solicited from the 7172 LEGISLATIVE COUNCIL ─ 13 April 2016 public to a newly established organization. Regarding issues relating to the regulation of activities for soliciting donations from the public and the use of such donations, will the Government inform this Council:

(1) of the existing legislation that regulates the activities for soliciting donations from the public held in public places or on the Internet or through other means by natural persons in their own names and by organizations which have not been registered pursuant to the legislation as a society or a body corporate in Hong Kong; according to the existing legislation, whether prior approvals from the Social Welfare Department (SWD) or other relevant government departments are required to be obtained for activities for soliciting donations from the public held in Hong Kong (including online activities for soliciting donations);

(2) regarding the donations solicited from the public by non-charitable bodies which have not been classified by the Inland Revenue Department as a charitable institution or trust that is exempt from tax under section 88 of the Inland Revenue Ordinance (Cap. 112), whether any legislation is currently in place to regulate the uses and the movement of such donations; whether it has conducted any assessment to ascertain if the use of such donations for purposes other than the purpose originally intended or the transfer of such donations to another organization by these bodies has contravened any existing legislation; if it has conducted such an assessment, of the outcome; the channels through which donors may monitor the ultimate uses and the movement of their donations;

(3) of the number of complaints received by SWD and other relevant government departments in the past three years about solicitation of donations from the public (including soliciting donations on the Internet) without approval; and among such complaints, the number of cases in respect of which legal or other follow-up actions have been taken by SWD and other relevant government departments; and

(4) as the Law Reform Commission proposed in its report entitled "Charities" published in 2013 that legislation should be enacted to subject all charitable organizations to the requirement of registration, and the list of registered charitable organizations should be available for public inspection, whether the Government LEGISLATIVE COUNCIL ─ 13 April 2016 7173

will accept such proposals; if it will, of the work progress in implementing such proposals; if not, the reasons for that?

SECRETARY FOR HOME AFFAIRS (in Chinese): President, upon consultation with relevant bureaux and departments, our consolidated reply to the questions is as follows:

(1) The Director of Social Welfare and the Secretary for Home Affairs may issue permits under section 4(17) of the Summary Offences Ordinance (Cap. 228) for collection of money or sale of badges, tokens or similar articles in public places for charitable and any other purposes respectively. Regarding charitable fund-raising activities, an applying organization must possess a valid registration in the Hong Kong Special Administrative Region under the Companies Ordinance (Cap. 32) or the Societies Ordinance (Cap. 151), or is a charitable institution or trust of a public character exempt from tax under section 88 of the Inland Revenue Ordinance (Cap. 112) (referred to as a charitable institution or trust of a public character below). Any application made by an individual will not be considered. For fund-raising activities for other purposes, the applicant must be an organization registered under the laws of Hong Kong, or an individual aged 21 or above and is either a permanent resident of Hong Kong or have been ordinarily resident in Hong Kong for a minimum of seven years.

If an organization raises funds in public places through the sale of commodities, it must apply for a Temporary Hawker Licence from the Director of Food and Environmental Hygiene (DFEH) in accordance with the Public Health and Municipal Services Ordinance (Cap. 132) and the Hawker Regulation (Cap. 132AI). Also, the Office of the Licensing Authority (OLA) of the Home Affairs Department (HAD) may issue Lottery Licences under the Gambling Ordinance (Cap. 148) to a club, association or body registered in Hong Kong for promotion and conduct of lottery.

Under the existing laws, activities for soliciting donations other than the fund-raising activities mentioned above are not subject to the regulatory regime.

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(2) For fund-raising activities in public places as approved by the for purposes other than charity, regardless of whether the organization is a charitable institution or trust of a public character, the permittee must, within 90 days after the conclusion of the fund-raising activity, cause the money received from the public, less any reasonable expenses incurred, to be applied for the purpose for which the permission is given; and submit a copy of the audited accounts produced by a certified public accountant for the funds collected to Home Affairs Bureau. The audited accounts will also be made available to members of the public for inspection upon demand.

Separately, for lottery events approved by the OLA, the licensee shall, within 90 days from the date of draw of the lottery, submit to the OLA a statement of income and expenditure for the event and a written report made by a certified public accountant. These two documents will be kept at the OLA for a period of one year upon receipt from the organizer for public inspection. If the lottery event is to raise funds for a charitable institution or trust of a public character, the licensee must also submit copies of receipt of donations from the beneficiaries. Also, if proceeds of the lottery event is for meeting the operating expenses of the organizer, the licensee must submit a copy of the audited annual financial statement of the organization to the OLA to show that the net proceeds has been used in meeting the approved purpose(s) of the lottery event.

As regards Temporary Hawker Licences, organizations issued with more than 12 licences within 12 months shall, for each and every of the licences subsequently issued, prepare an income and expenditure account, including all the monies received from public subscription and a detailed breakdown of every disbursement item related to the fund-raising activities covered by the licence for audit by a certified public accountant or registered accounting firm or corporate practice; and forward the original auditor's report to DFEH within 90 days from the last day of the licence period. DFEH may publicize the auditor's report in any form or manner for public inspection.

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(3) If the Social Welfare Department (SWD), the HAD and the Home Affairs Bureau receive complaints on suspected unauthorized fund-raising activities held in public places or unauthorized lottery events, the cases will be referred to the Police for further investigation.

In the past three years, the HAD and the Home Affairs Bureau received four complaints related to fund-raising activities and two were referred to the Police for follow up; the OLA received one complaint on unauthorized lottery event and referred the case to the Police for follow up. Separately, the Police directly received five complaints against unauthorized fund-raising activities over the same period. The Food and Environmental Hygiene Department does not keep record of complaints received on fund-raising through the sale of commodities.

Separately, the number of enquiries/complaints in respect of fund-raising activities received by the SWD in the past three years and cases referred to the Police for follow-up actions are as follows:

Year 2013-2014 2014-2015 2015-2016 Number of enquiries/ 228 172 148 complaints received Number of cases 5 2 2 referred to the Police

(4) The Law Reform Commission proposed a series of recommendations in its Report on Charities. The recommendations are relevant to the purview of various Government bureaux and departments. Given that the recommendations will have significant implications on the operation of the charities in Hong Kong, the Government needs to study in detail and carefully consider the recommendations. The Home Affairs Bureau is co-ordinating comments from relevant bureaux and departments for consideration of the way forward.

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Management and Operation of Youth Square in Chai Wan

20. MR CHRISTOPHER CHUNG (in Chinese): President, the Youth Square, built by the Government at a cost of $771 million and located in Chai Wan, was completed in 2008. In March 2009, the Home Affairs Bureau (HAB) awarded, through an open tender exercise, a contract for the provision of management and operation services (the operation contract) for the newly built Youth Square to the New World Facilities Management Company Limited (New World) for a period of seven years. On 20 March last year, which was about one year before the expiry of the operation contract, HAB published a notice in the Gazette to conduct an open tender exercise for the provision of management and operation services for the Youth Square for another seven years. Upon the closure of the tender exercise on 8 May of the same year, HAB received only two bidding documents, one of which was submitted by New World. On 27 November of the same year, HAB awarded a new operation contract to New World. It has been reported that the Youth Square has incurred losses continuously for seven years since commencement of its operation, but the total management fee payable to New World has increased from $371 million under the last contract to about $510 million (with a provision for fee adjustment according to the percentage of increase/decrease of the Composite Consumer Price Index) under the new operation contract. In this connection, will the Government inform this Council:

(1) whether HAB had publicized, apart from publication of a notice in the Gazette, the tender arrangement through any other channel when it invited tenders last year for the provision of management and operation services for the Youth Square;

(2) whether HAB has explored the reasons why only two bidding documents were received; if HAB has, of the outcome and whether the reasons include inadequate publicity and the tendering period being too short;

(3) of the reasons why the authorities decided to select New World among the two bidders;

(4) as there were only two bidders, whether the authorities had considered conducting the tender exercise afresh;

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(5) as the Youth Square has incurred losses continuously for the past seven years under New World's management and operation, whether the authorities had considered this factor before it decided to award the new operation contract to New World;

(6) whether it has explored (i) the reasons why the Youth Square has incurred losses continuously, and (ii) measures which may reverse such a situation;

(7) whether New World proposed, in its bidding document, measures for reversing the situation of the Youth Square incurring losses continuously and for boosting the income of the Square; if New World did, of the details; and

(8) as the Youth Square has incurred losses continuously for the past seven years under the management and operation of New World, of the justifications for the authorities' decision to significantly increase the management fees payable to New World under the new operation contract, and whether they have assessed if this practice is in line with the principle of using public money properly?

SECRETARY FOR HOME AFFAIRS (in Chinese): President, my reply to the questions raised by Mr Christopher CHUNG is as follows:

An open tender for the Provision of Management and Operation Services for the Youth Square (YS) was launched between 20 March 2015 and 8 May 2015, which is about one year before expiry of the existing contract. Publicity channels included Government's Gazette, government's website, and advertisements on Chinese and English newspapers. During the tendering period, a total of 20 organizations/persons had collected the tender documents. Representatives from seven organizations attended the tender briefing. We considered that the publicity channels sufficient and the tendering period reasonable.

When assessing the tenders for the management and operation services contract for the YS, consideration such as full compliance with the conditions and specifications laid down in the tender documents, tender price, relevant experience, the proposed management and business plans for YS, and so on, had been taken into account.

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Two tenders were received at the open tender exercise. In accordance with the assessment criteria, the tenderer who received a higher total score was awarded the new contract.

The contract scope of the Provision of the Management and Operation Services for the YS is diversified and different from normal building management contracts. It covers management and operation service of a three star hotel of 148 rooms, theatrical service for a theatre of more than 600 seats and a studio of more than 200 seats, leasing service for 38 office units and 39 retail shops, hiring service for various multi-purpose areas/facilities. The management and operation services contractor (the service contractor) is also responsible for all daily repair and maintenance works, organizing large-scale activities during the contract period for promoting youth development, venue promotion and marketing, and so on.

Given the diversity of the service contract and the necessary resources invested by the service contractor, as well as making reference to the operating expenses of other cultural and leisure facilities, we consider that the contract price for the Provision of the Management and Operation Services for the YS reasonable.

We must emphasize that YS is an important platform for the Government to pursue its youth development objectives. Since youth development is a long-term and ongoing process, we should not assess the effectiveness of YS from a commercial angle and just against a full-cost-recovery target. The Home Affairs Bureau completed a consultancy study on the operation and positioning of YS in 2013. It is recommended in the consultancy report that YS should continue to serve as a focal point for youth development activities in Hong Kong, set its hiring charges based on the affordability of the target users and offer larger concessionary rates to them in order to promote youth development. Therefore, the continued investment and input of resources from the Government to YS is both necessary and justifiable. Based on the consultant's financial analysis and YS' past operating experience, the consultant suggested that YS should strive to maintain a cost-recovery ratio of not less than 50%. The consultant's recommendations, which were endorsed by the Youth Square Management Advisory Committee, were reported to the Panel on Home Affairs of the Legislative Council in March 2014.

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Since the opening of the YS, the utilization rate of the facilities has been improving. At present, the utilization rate of key facilities (for example, Y Loft, Y Theatre, Y Studio) has reached 80% while that of office and retail shops has been close to 100%. The YS has also been maintaining a cost-recovery ratio of over 50%.

YS will continue to enhance its facilities, keep in view its financial performance (including reviewing regularly the fees and charges of its facilities) and implement suitable adjustments, where necessary, to achieve the target cost-recovery ratio.

Facilities of Kai Tak Cruise Terminal

21. MR PAUL TSE (in Chinese): President, it has been reported that the world's largest cruise company has for the first time included Hong Kong in its annual world voyage route, and the company's three mammoth cruise liners have recently visited Hong Kong and berthed at the Kai Tak Cruise Terminal (KTCT). The regional director of the company pointed out that, as the three cruise liners had brought about 17 000 visitors to Hong Kong, the external ancillary transport facilities for KTCT were of paramount importance. She further pointed out that the view of the Victoria Harbour was highly attractive to overseas visitors. She hoped that more restaurants would enter KTCT in future to "warm up" the terminal. On the other hand, the managing director of a famous cruise company in the United States relayed the views of some visitors that the lack of entertainment facilities in the vicinity of KTCT had caused much inconvenience to them. He considered that the vicinity of KTCT should be livened up in order to attract visitors. In this connection, will the Government inform this Council whether it will, after taking into account the aforesaid views:

(1) and given that the vibrant ambience anticipated by visitors is totally absent at KTCT during night-time, coupled with the fact that the grass park adjacent to KTCT is always void of visitors with an extremely low utilization rate, explore ways to enhance the night-time entertainment facilities at KTCT, maximize the use of the grass park and the areas surrounding KTCT, and organize activities which are attractive to visitors and members of the public, e.g. music 7180 LEGISLATIVE COUNCIL ─ 13 April 2016

and multi-media art festivals and carnivals such as Clockenflap, etc., so as to liven up KTCT;

(2) seriously reconsider the proposal of establishing "a bar street" in KTCT's open-air roof garden, in particular the proposal of converting the space in the garden currently occupied by the Leisure and Cultural Services Department, which enjoys a 360-degree panoramic sea view, into an area for accommodating bars or eateries, as well as extending the opening hours of the garden at night, so as to provide overseas visitors with the unforgettable travel experiences of enjoying the magnificent day and night views spanning over the Victoria Harbour while savouring a multitude of culinary delights, and to improve KTCT's financial position by increasing its rental income;

(3) assess if the provision of kaito ferry service linking Kwun Tong and KTCT (available on Saturdays, Sundays and public holidays only), which is awaiting vetting and approval by the authorities, can satisfy the demand of visitors for enjoying the view of the Victoria Harbour at sea, and improve the existing situation of inadequate external road transport facilities for KTCT (i.e. relying on one single link road to and from Kowloon Bay); and

(4) and in the light of a significant rise in the number of ship calls at KTCT from 90 this year to more than 160 next year, consider extending the kaito ferry service to link up KTCT with Lei Yue Mun, Hong Kong Island East (Hong Kong Museum of Coastal Defence), the town centres such as Tsim Sha Tsui and Central, etc.?

SECRETARY FOR COMMERCE AND ECONOMIC DEVELOPMENT (in Chinese): President, the Kai Tak Cruise Terminal (KTCT), which is located within the Kai Tak Development Area, is an important tourism infrastructure. Since its commissioning in 2013, various Government bureaux and departments have all along been committed to enhancing its supporting facilities and operation arrangements to ensure that both the passengers using the terminal and the visitors going to the facilities in its vicinity will have satisfying experiences. LEGISLATIVE COUNCIL ─ 13 April 2016 7181

The business of the KTCT is also on steady increase, its number of ship calls in 2016 is 90 (involving 100 days); the figure in 2017 will increase to 162 (involving 163 days). Since its commissioning, over 30 events had been held inside the KTCT. My reply to the four parts of Member's question is as follows:

(1) The Energizing Kowloon East Office (EKEO) of the Development Bureau and the Leisure and Cultural Services Department (LCSD) have all along been actively promoting and assisting relevant organizations in holding different activities in the vicinity of the KTCT and at the Kai Tak Runway Park. Also, many events are held inside the KTCT. These activities have added vibrancy to the area along the Kai Tak runway tip.

The activities recently held in the vicinity of the KTCT included "HONGKONG STREETATHON@kowloon east", "Tung Wah Charity Carnival", "Kwun Tong Dragon Boat Day" and "Kwun Tong Water Sports Festival", and so on. On the other hand, events held inside the KTCT include fashion show, pet product expo, car shows, charity film screening, cruise holiday expo, and large-scale activity such as "Slide the City", and so on. If any organization is interested in organizing activities in the vicinity of the KTCT and at the Kai Tak Runway Park, the relevant departments would provide suitable assistance. Event organizers may also approach the terminal operator to discuss issues relating to renting the venues inside the KTCT for hosting events.

In the medium to long term, the EKEO will continue to forge ahead with the "Kai Tak Fantasy" project to develop the areas around the KTCT into a world-class tourism node.

(2) The KTCT has an ancillary commercial area of 5 600 sq m, including three shops on the rooftop of the terminal building. There are Chinese and Western eateries as well as wedding service company, and so on, operating in the ancillary commercial area. As for the three shops on the rooftop of the terminal building, two are still available for leasing. Parties interested in operating eateries or bars may consider renting these two premises.

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Regarding the proposal of establishing a "bar street" at areas designated within the Kai Tak Cruise Terminal Park (the Park) on the rooftop of the terminal building (that is, not a part of the ancillary commercial area of the KTCT), we have already pointed out previously that this would reduce the recreational space available for public enjoyment and would affect the recreational activities of or the viewing of the Victoria Harbour by the public. Any change in the use of the Park is subject to the agreement of the local community, including the District Council concerned. Other considerations include whether the proposal could integrate with the KTCT and other local facilities, its impact on the environment and public order, and the planning restrictions on land use within the KTCT. We recommend that parties interested in operating eateries and wine bars at the KTCT may consider renting the vacant premises.

At present, the Park is open daily from 7 am to 11 pm. If the shops on the rooftop of the terminal building consider it necessary to operate beyond the Park's opening hours, the LCSD will, having regard to the relevant circumstances, consider facilitating.

(3) and (4)

Located in the proximity of the KTCT, the Runway Park Pier (the Pier) completed its refurbishment works last month and is now open for public use. The Pier can promote marine transportation to the area around the KTCT and facilitate the cruise tourism trade in providing a wider variety of shore excursion programmes for its passengers. We understood that the operators providing shore excursion services to cruise passengers are also interested in using the Pier for arranging excursions to outlying islands and the Victoria Harbour by water transport.

For public water transport services, the Transport Department (TD) has approved the application from a kaito ferry service operator to use the Pier for running kaito services plying between Kwun Tong and the areas around the KTCT on Saturdays, Sundays and public LEGISLATIVE COUNCIL ─ 13 April 2016 7183

holidays. The operator has started providing services along such route to the public since last weekend (that is, 9 and 10 April). The services at the first weekend were in general smooth and were well-received by the public (including the athletes and crew of the "HONGKONG STREETATHON@kowloon east"). The TD will study any other proposals received from operators for running ferry services plying to and from the Pier.

For land transportation, the Government has completed detailed planning for the transport infrastructure in the Kai Tak Development Area. The relevant road projects will be implemented in stages to cope with the demand and dovetail with the completion schedules of the development projects in the area. Of these projects, the Civil Engineering and Development Department has commenced the works for widening the existing single 2-lane carriageway (including Shing Fung Road, Shing Cheong Road and part of Cheung Yip Street) connecting the KTCT and Kowloon Bay to a dual 2-lane carriageway in late 2015. The works are expected to be substantially completed by 2019 to serve the developments at the southern tip of the former runway. The TD will also review the demand for public transport services in the area near the KTCT from time to time.

Social Worker Manpower in Special Schools

22. MR IP KIN-YUEN (in Chinese): President, according to the Compendium to Code Of Aid for Aided Schools made by the Education Bureau, the social worker to student ratio in special schools is set at 0.5:35. The headmasters of some special schools have relayed to me that they have all along faced the problem of insufficient social workers, and therefore suggest that the ratio should be lowered, so as to enable the schools to have sufficient social worker manpower to cater for the needs of their students. On the other hand, while the Government reduced, in the 2014 Policy Address, the class size in schools for children with visual impairment and schools for social development from 15 to 12 students, it did not correspondingly lower the social worker to student ratio, resulting in those schools having to reduce their social worker 7184 LEGISLATIVE COUNCIL ─ 13 April 2016 manpower. Regarding issues relating to social worker manpower in special schools, will the Government inform this Council:

(1) of the numbers and names of special schools that have (i) less than one, (ii) one to two and (iii) two or more social workers within their existing staff establishment (set out in a table);

(2) whether it has assessed if the existing social worker manpower of special schools is adequate to cater for the needs of students; if it has, of the criteria adopted for conducting the assessment and the assessment outcome, including the specific impact of insufficient social worker manpower on student counselling work; if not, the reasons for that; and

(3) whether it has assessed the additional expenditures which will be caused by lowering the social worker to student ratio from 0.5:35 to 0.5:28; if it has, of the details; if not, the reasons for that?

SECRETARY FOR EDUCATION (in Chinese): President, my reply to the question raised by Mr IP is as follows:

(1) Currently, there are 60 aided special schools in Hong Kong. Among them, the hospital school is not staffed with school social workers as the specialist service is provided by the hospitals concerned. One special school is undergoing mainstreaming, with special arrangements for its teaching and non-teaching staff. In the 2015-2016 school year, the Education Bureau has provided the remaining 58 special schools with 116.5 school social workers. Each school is provided with at least one school social worker, with 27 schools having one to two and 31 schools having two or more school social workers. For provision of resources for supporting students with diverse needs, it is our established practice that we do not disclose the names and situation of individual schools so as to avoid misconception and possible labelling on individual schools. The manpower of school social workers by type of special schools is set out below:

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Number of Type and number of special schools social workers 1 to 2 School for Children with Visual Impairment: 2 School for Children with Hearing Impairment: 1 School for Children with Physical Disability: 3 School for Social Development: 2 School for Children with Moderate Intellectual Disability: 9 School for Children with Severe Intellectual Disability: 10 2 or School for Children with Physical Disability: 4 more School for Social Development: 5 School for Children with Mild Intellectual Disability: 10 School for Children with Mild and Moderate Intellectual Disability: 7 School for Children with Moderate Intellectual Disability: 5

(2) All along, the Education Bureau has been providing special schools with teaching and specialist staff for the provision of education and guidance services to students. Social workers form part of the establishment for specialist staff of special schools. Apart from social workers, special schools are also provided with other guidance resources, including educational psychologists, additional resource teachers catering for the specific special educational needs of students, Career and Life Planning Grant, and so on. To cater for the holistic development of students and to handle their work on guidance and discipline, special schools generally adopt a whole school approach in implementing preventive and developmental programmes, which are planned and administered by teachers and specialist staff while social workers take the lead in handling cases. Individual schools also collaborate with parents to cater for the growth and developmental needs of their students as appropriate. In addition, teachers in the school guidance and discipline teams, when necessary, also provide individualized guidance and discipline services to better cater for the specific needs of students, and refer the students to various professionals for further follow-up according to the actual situation.

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The Education Bureau has been offering professional development programmes to enhance the professional capacity of teaching and non-teaching staff of special schools, including school social workers, so as to cater for the needs of their students. Special schools are also provided with different grants which they may deploy flexibly to employ additional staff or hire professional services to tie in with their specific operational needs. On the whole, special schools are providing appropriate and proper guidance services for their students.

(3) As school social workers have to handle cases and different types of special schools vary considerably in class size (ranging from eight to 15 students per class), the social worker-to-student ratio of special schools has all along been determined according to the number of students instead of number of classes.

Currently, special schools may appoint 0.5 school social workers for every 35 students. Where a sponsoring body operates two or more special schools, such staffing provision may be determined according to the combined number of students of all the schools under the same sponsoring body. Moreover, we have been adopting a more flexible calculation method in determining the above-mentioned social worker-tostudent ratio by taking the total number of places in all the approved classes of a school instead of the actual student intake.

Instead of considering the provision of social workers in isolation, we should take into account the specific circumstances and mode of delivery of services in special schools. Specifically, teachers in special schools have to work in collaboration with school social workers and related professionals to provide preventive, remedial and developmental guidance services for all students. Besides, as mentioned in part (2) above, the Education Bureau has been implementing various measures to enhance the special education services, including guidance services, of special schools in recent years. We have no plan to review the establishment of individual categories of specialist staff.

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GOVERNMENT BILLS

Second Reading of Government Bill

Resumption of Second Reading Debate on Government Bill

PRESIDENT (in Cantonese): Government Bills.

This Council now resumes the Second Reading debate on the Appropriation Bill 2016. Today's meeting will end at about 8 pm and resume at 9 am tomorrow. Members who wish to speak may do so today or tomorrow. At the meeting to be held next Wednesday, this Council will continue to deal with the Appropriation Bill 2016, but only public officers may speak before the Committee stage.

At this meeting, after Members have spoken in the Second Reading debate on the Appropriation Bill, this Council will continue to deal with Mr CHAN Chi-chuen's motion moved under Rule 40(4) of the Rules of Procedure in respect of the Copyright (Amendment) Bill 2014 that "further proceedings of the committee of the whole Council be now adjourned".

Members who wish to speak in the Second Reading debate on the Appropriation Bill today will please press the "Request to speak" button.

Under the Rules of Procedure, each Member may speak for up to 15 minutes.

APPROPRIATION BILL 2016

Resumption of debate on Second Reading which was moved on 24 February 2016

MR CHARLES PETER MOK (in Cantonese): President, the Budget this year has devoted many paragraphs to information technology and innovative technologies and the amount of funding involved is large. I will certainly give my support and I truly believe that Hong Kong must take innovation and technology development as its direction of future development. However, the 7188 LEGISLATIVE COUNCIL ─ 13 April 2016 worst scenario I could think of is that the Government only injects money into innovation and technology development without being innovative itself. This approach will not bring about success.

First of all, I would like to respond to the part on innovation and technology in the Budget this year. The Government has allocated a total of $18.4 billion to innovation and technology, among which $12 billion-plus is allocated to infrastructure development, for example, the Hong Kong Science and Technology Parks Corporation will construct an industrial building at the Tseung Kwan O Industrial Estate. In fact, this is closely related to the policy on "re-industrialization". I do not have time today to discuss this point in detail, but in general, the authorities cannot merely consider building plants in promoting "re-industrialization". In "re-industrialization" and Industry 4.0, it is most important to incorporate data science in the process.

Funded items on innovation and technology mentioned in the Budget include a Midstream Research Programme for Universities and the Innovation and Technology Venture Fund, each of which will receive a funding of $2 billion. These are part of a long-term policy. In addition, the Innovation and Technology Fund for Better Living, which we do not know how it will be implemented, will receive a funding of $500 million. I believe that is also a long-term investment. As we have said before, a far-sighted vision and a fair and just system are the prerequisites for innovation and technology development. I hope that the Government will allow sufficient time for consulting the industries on these items of expenditure.

Furthermore, the Pilot Technology Voucher Programme will be given a funding allocation of $500 million. I have been involved in persuading the Government to implement this beneficial programme which can immediately benefit small and medium enterprises (SMEs). However, initially, I heard that the Government intended to provide a funding of $200,000 through matching and impose certain restrictions in the Programme; as such, companies or organizations that put forward proposals will be constrained. As a result, only government-related companies can participate in the Programme. We were shocked by this idea as it would turn something good into bad. The focus of this programme is the target of beneficiaries. The beneficiaries (those who receive funding) should not only include SMEs, but also companies which have put forward proposals. I have all along pointed out that companies in Hong Kong can hardly receive funding comparable to those companies in countries such as LEGISLATIVE COUNCIL ─ 13 April 2016 7189

Singapore and the United Kingdom which provide subsidy in the form of technology vouchers. Certainly, I hope that the Programme will not favour some government organizations. Over the past two months, I have attended meetings with the Innovation and Technology Commission and discussed with my friends in the industry, all of whom considered that the Programme must be open to all and its implementation should not be hindered by any red tapes.

I have asked the Financial Secretary about financial technologies (Fintech) many times. I raised the question again in a seminar and he also said I had asked many times. However, in relation to Fintech, I really think that the Government should no longer just consider consumer protection or the technology neutral principle, as such considerations will become excuses for constraining us to move forward and improve the current legislation. Many friends in the industry, including start-ups, say that the legislation still lacks clarity in many areas. We have discussed this point many times before and I will not spend too much time on it today. I only hope that the Financial Secretary will hear this message.

In fact, the Financial Secretary attended an ICT award presentation ceremony organized by the Government in an evening a few days ago. At that time, representatives of some start-ups told me that they failed to open bank accounts. I do not know what the reasons are. Do banks think that these small companies cannot make profit? Or, do they think that these small companies, in particular Fintech companies, may become their competitors in the future? Or, are banks bound by the policy against money laundering of other countries, such as the United States? Anyway, the fact is that these companies failed to open bank accounts. According to these companies, that was the biggest problem encountered by them in Hong Kong. Therefore, the Financial Secretary really has to pay attention to this problem. At present, not only politicians, even SMEs have a big problem in opening bank accounts.

Earlier, the United Kingdom issued a report on Fintech. I will mention two points in particular. The first point concerns talent. If no talent is available, it will be futile for us to hold further discussion. How can we attract capable young people to enter the technology industry if there is a shortage of talent? It will be useless to say anything. Second, the Government should take the lead to use new technologies, including electronic payment and various technologies.

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Furthermore, the Budget mentions about smart city development. The points made include installing traffic detectors, refining the geographic information systems, integrating data and installing sensors in water supply networks, and so on. Frankly speaking, smart city aside, the authorities should have to undertake such tasks. In developing a smart city, it is most important to improve the living of the people. People are more concerned about the application, instead of what kind of the latest technology is involved. The most important thing is to change their mindset.

As I understand it, the Government will conduct another consultancy study on smart city development in the latter half of this year. If another study is to be conducted, the progress will be too slow. In fact, we can easily take reference from the experience of many other cities; it makes no difference whether another study will be conducted or not. The Financial Secretary can refer to the report on Digital 21 Strategy, a consultancy study conducted several years ago. Many recommendations contained in the report are still applicable today, just that such recommendations have not been implemented. Therefore, I hope that the Government can implement the recommendations as soon as possible instead of studying, studying and further studying.

President, apart from commenting on the contents of the Budget, I would also like to spend some time to talk about the inadequacies of the Budget. First, the importance attached to the global market. This morning, I attended the Internet Economy Summit organized jointly by the Government and the Innovation and Technology Bureau. LEUNG Chun-ying was also present. As I have to attend this meeting, I left the Summit early. However, based on what I heard at the beginning of the Summit, I always thought I had attended the China Internet Conference. That would not work. If we do not attach importance to the global market, we will not succeed. The information technology industry in Hong Kong must rely on the principle of "two systems", and so does the Internet economy of Hong Kong. Why do data centres set up in Hong Kong? It is because Hong Kong operates outside the firewall. Many SMEs wanted to enter the Mainland market, but their plans ended up in nightmares because their products had been plagiarized. I have many such stories to share with the Financial Secretary. On the other hand, if Hong Kong is to develop into a smart city, it will really become "a golden egg", but I do not want some powerful Chinese companies to carve up this "golden egg" of the Hong Kong market. If the Government is not willing to take the lead in procuring local services and LEGISLATIVE COUNCIL ─ 13 April 2016 7191 products, I am afraid it ― I do not know if it is doing a disservice out of good intentions ― cannot help the local market.

The second inadequacy concerns talent. In fact, the part on personnel training mentioned in the Policy Address this year is unsatisfactory. It only mentions one proposal which is not even new. The proposal was implemented last year and it is the Enriched IT Programme in Secondary Schools. There are nearly 1 000 secondary schools in Hong Kong, but only eight participate in the Programme. The other initiatives are not worth mentioning. Although they are useful, they are just minor measures which will not produce any significant effect, including providing subsidy for students admitted to programmes offered by the Vocational Training Council. However, the biggest problem regarding talent is the lack of incentive to enter the industry. Actually, the Government should bear the greatest responsibility because it has taken the lead to outsource the work. I have asked the Chief Executive time and again how the Government would handle the issue of T contract staff, but he did not answer me. At present, the number of civil servants engaging in information technology work is fewer than the T contract (that is, temporary agency contract) staff. We found that among the people filling the information technology posts, the lower rank staff have been working for more than three and a half years on average, and some higher rank staff have even been working for more than 10 years. Do not tell me that these people are temporary staff. Does the Government really think that young people are unaware of the situation of different pay and different benefits for doing the same work? How then will they have the incentive to enter the industry? The Government must take the lead in improving the situation.

Third, inter-departmental co-ordination. Recently, I met with a delegation from Stockholm, a smart city of Sweden. The arrangement of the meeting was very good. Apart from representatives of the Innovation and Technology Bureau, representatives of the Transport and Housing Bureau, the Development Bureau and the also attended the meeting. That evening, members of the delegation shared with me the experience of Stockholm. Technology is not the prime concern; the matter lies with the co-ordination within the government; how the government can remove obstacles and really adopt a top-down approach in co-ordinating different departments to develop a smart city and improve the living of the people. I could not help saying to them, "Alright, Hong Kong will have a lot of work to do then because we are truly an expert in silos and our government departments really work separately without co-ordination."

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At present, many projects should be taken forward, including those which will have a significant impact on society, for example, smart grid which is often mentioned by power companies. However, the relevant authorities may think that the project incurs capital investment and they doubt whether the power companies actually want to increase electricity tariff under the Scheme of Control Agreement. Hence, the authorities rejected the project even before it is formally proposed. There are even more problems regarding transport. For example, there is a need to amend the legislation in response to the problem arising from hire car sharing services of Uber. While Singapore is quick in doing the relevant work, Hong Kong lags far behind. Another example is introducing an electronic road pricing scheme, which is under discussion recently. Hong Kong is still using technologies used by Singapore 10-odd years ago ― actually, almost 20 years ago, I believe. Regarding mobile applications for parking, we have asked the Government whether it will urge carparks to provide open data, but the Government fails to do so. In relation to open data in transport, the Government can ask the bus companies to provide open data when they apply for franchise renewal. Surprisingly, the bus companies consider the information they provide to passengers at bus stops open data. That is not open data. The Government is actually allowing the bus companies to monopolize the market. Open data is data which is available for other people to use. If the Government does not require the bus companies to provide open data when they apply for franchise renewal, when will it do so? If we handle matters with such an old mindset, we will fail. Therefore, I hope the Financial Secretary will understand that the Government has to change its mindset in a top-down manner.

Singapore announced its budget a few weeks ago and its government officials have been explaining the policies concerned. One of the officials said, "Data is the new currency." How much money has Singapore invested in nurturing its talent? It has invested S$120 million and my calculator tells me that it is HK$700 million plus. Where was the money spent? It was spent on re-training, and I stress, on retraining talent in information technology, cloud technologies and big data. The reason is that the Singaporeans know that no matter how much efforts they put in training young people, there will still be a shortage of young talent. In fact, how much money has Singapore injected in retraining its existing talent so that the people can keep abreast of the latest technology? Singapore has injected HK$700 million in a programme called the Big Analytics Skills Enablement Initiative. I hope that the Hong Kong Government can really invest on nurturing talent and not merely on building LEGISLATIVE COUNCIL ─ 13 April 2016 7193 infrastructure. President, that is because that our future development really depends on data technology, the availability of talent and the global market. These are the points that this Budget has not covered or covered inadequately.

Finally, President, if the Government cannot become an agent for solving the problems, it will only become part of the problems. In the future, I hope the Government can really rewire its brain and adopt a new mindset when formulating policies, particularly those on innovation and technology. I hope it will not resort to its old ways of merely setting up a fund and conducting many studies, thinking that problems will then be solved. We can see what is happening in the market clearly. Thank you, President.

DR KWOK KA-KI (in Cantonese): President, I think the Financial Secretary should celebrate his luck. According to the principal government officials' popularity figures released on 12 April by the Public Opinion Programme, the University of Hong Kong, the latest support rating of the Financial Secretary scored a record high of 63.4, with a 70% approval rate and 7% disapproval rate, giving him a net popularity of positive 64 percentage points. The Chief Executive, the Financial Secretary's boss, scored 41.6, and with a 25% approval rate and 57% disapproval rate, giving him a net popularity of negative 32 percentage points. Since the survey was conducted before the "Airport Incident", I cannot imagine what his score will be in the next survey. , the Financial Secretary's colleague, scored a high mark of 55.4, with a 51% approval and 21% disapproval rates, giving her a net popularity of positive 30 percentage points.

On the day the Budget was delivered, many people asked Members, including me, "What do you think of the Financial Secretary? Can you tell from this Budget his fortune or Hong Kong's fortune? Does he have a chance to run for the Chief Executive election or is he qualified to do so?" My answer was "Why not?" This is Financial Secretary John TSANG's ninth Budget and I can only say he is very lucky. Over the past nine years, apart from a short period of time during which the economic environment was very poor with a very bleak future, and the outbreak of the Lehman Brothers Minibonds Incident, most of the time has been rather uneventful without any big troubles and he could continue to hand out "candies". Of course, he always makes wrong calculations.

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President, this year, Financial Secretary John TSANG has assumed a leading role, maybe due to the fact that his rivals are too weak, including LEUNG Chun-ying who was beyond redemption and Chief Secretary Carrie LAM who was disappointing indeed. However, there is no need for me to commend him under such circumstances. As a matter of fact, after the delivery of this year's Budget, I have carefully read the budgets of other places, including the budget of Singapore, which Mr Charles Peter MOK has just mentioned, as well as that of the United Kingdom. The Chancellor of the Exchequer clearly said in the budget that the United Kingdom excelled 20 other countries in respect of economic performance with the highest employment rate among most advanced countries. Yet, he was not complacent and declared that he just wished to make a budget for the future of his country.

As the incident on the second day of the Lunar New Year is brought up in paragraph 5 of the Budget, I also wish to talk about the future of Hong Kong. The future of Hong Kong certainly belongs to the younger generation but how does our Government, including the Financial Secretary, respond to their aspirations in the Budget? What has been done to give young people some hope so that they will not take to the streets to throw bricks? The Financial Secretary, being in this post for nine years, cannot totally shirk his responsibility. As he has said, in the past nine years, Hong Kong has undergone economic changes and, let me quote his words in the Budget, Hong Kong is now in a "new economic order", but he has not set aside any room for the young generation to participate in this order.

As soon as young people enter the university, they are almost doomed to failure because Hong Kong's tertiary education still relies very heavily on self-financed programmes, including sub-degree programmes. Even though the SAR Government has sufficient means and resources to increase the number of subsidized places to help young people acquire higher qualifications such as tertiary education or vocational training, the Government has not done its best to do so.

After entering the job market, young people have to face even more ferocious challenges. An obvious feature of the new economic order is that manpower is no longer the most important. When new technologies can replace manpower, the value of manpower will depreciate. That is why the minimum salary point of university graduates has hardly increased over the past decade, LEGISLATIVE COUNCIL ─ 13 April 2016 7195 which remains at $10,000 odd a month. If young people wish to change their lifestyle, such as pursue further studies or raise a family, they will face even greater difficulties.

According to the result of the annual Demographia International Housing Affordability Survey just released, Hong Kong has the world's highest Median Multiple of 19.0, meaning that Hong Kong people, even if they do not spend a dollar on food, still have to spend 19 years before they can pay off the mortgage for a flat. How about other countries? Countries like Australia and New Zealand are in a rather dire situation, with the Median Multiples of 6.4 and 9.7 respectively. Their situations are bad enough. But some countries have no problem at all.

What I wish to say is that, since the Financial Secretary will occasionally piggyback on local young people and blogs about them, will he be honest with himself and consider how the situation of young people today differ from the time when he was a lad several decades ago. What can young people do today to enter this new economic order? How can they gain a foothold in society in the midst of all kinds of hardships? The past and present Budgets have never provided an answer to young people. However good the Financial Secretary feels about himself, he can never change the reality.

On the other hand, under the new economic order, many small and medium enterprises (SMEs) suffer dearly. The Financial Secretary should be well aware how a huge enterprise called Link Real Estate Investment Trust (Link REIT) in Hong Kong has driven SMEs to the brink of extinction in the past year. To be exact, such SMEs are micro enterprises such as vegetable and fish stalls in wet markets. A few years ago the Government made a wrong decision to list LINK REIT and the consequences could not have been foreseen then. I hope that the Financial Secretary will pay a visit to Cheung Fat Market. The rent of stalls selling tofu and frozen meat is $30,000 a month and $90,000 for fish stalls. The tenants told me that their greatest concern was not the monthly rent of $30,000 or even $90,000, but that their tenancy would not be renewed. The management company outsourced by Link REIT has clearly stated that it will force the current tenants to move out when their tenancy expires in September, and then it will raise the rents substantially. The new company will certainly employ various gimmicks, such as selling chickens with iPad. However, Financial Secretary, the residents in that district are the grassroots, many of them are elderly people 7196 LEGISLATIVE COUNCIL ─ 13 April 2016 who may not know how to use iPad. All they want is a market where they can buy inexpensive goods of high quality, rather than any gimmicks. But do they have a choice?

Although the Government announced that it would no longer let Link REIT manage its new shopping malls and markets, it has adopted the management mode of Link REIT by outsourcing the management of all new public housing estates. That is to say, the Government adopts the middle-man-exploitation mode or, to put it more bluntly, the "vampire mode" to manage all new public housing estates in the future. The Government has stifled the economy of the grassroots in Hong Kong with its own hand, leaving no room for survival of local bazaars and even hawkers. Do not forget that the incident on the second day of Lunar New Year was triggered by issues concerning hawkers selling fish balls in Mong Kok.

A few decades ago, when the Financial Secretary was still a kid, even though many people were very poor then, they could start up a business with several hundred dollars or a thousand dollars and they had hope. Many senior government officials also grew up in such an environment. I learnt that the father of the former Secretary for Justice made his living by selling ice-cream. A boy brought up by a father selling ice-cream had the chance to rise to the position of the Secretary for Justice. Do people have such a chance today? Today, even if small business operators are willing to pay several ten thousand dollars for rental, they will still be driven out or forced out of business. No one physically drives them out but they have to go. Under such a harsh environment, they have no choice. The consequences brought by the social rifts will eventually be borne by society. If this year's Budget or the Government's future plans do not address these problems, the problems will not be solved by themselves. The incident on the second day of the Lunar New Year may happen year after year. Every young person will remember the Government's response. Although the Financial Secretary is an eloquent speaker and he knows a little about piggybacking, he has not put forward any specific policies to give hope to young people. Of course I wish the Financial Secretary has the chance to rise to a higher position in the Government, but at the same time, I also keenly hope that he can deliver a budget with a vision, just like what the Chancellor of the Exchequer of the United Kingdom has said, the budget is drafted for the future.

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The second issue I wish to talk about is the ageing of the population. It is a well-known fact, and the Government also keeps reminding us that population ageing is a grave problem in Hong Kong. The Government remains silent on universal retirement protection and refuses to take up the responsibility to implement a universal retirement protection scheme. On the contrary, the figures cited by the Government are very disappointing. Let me quote the figures cited by the Financial Secretary: Hong Kong's elderly population is close to 1 million. According to him, in the coming year starting from 2016-2017, a recurrent provision of $17 million will be allocated to provide 160 additional day care places for the elderly and 1 200 more subsidized residential care places will also be provided. Financial Secretary, I feel ashamed to quote such figures: 160 day care places and 1 200 subsidized residential care places. Buddy, how many billions of dollars does our Government have as reserves? Close to $3,000 billion. We also have $860 billion of fiscal reserves. Now we are telling people, "I am very glad that there is an increase of 160 day care places." These words should not come out of the mouth of a human being.

I earnestly hope that the Government with such abundant resources will truly satisfy the needs of the people. Every time after the Budget is delivered, we would meet with organizations representing the elderly and other elderly people. Last week, some old people told us about their dire hardships and their humble requests. An elderly man told me that all he was asking for was the meal delivery service. However, unless he was lame and could not walk or he had a stroke, he would never get such service because he was not desperate enough. If a government only provides people with such a humble service when they are truly desperate, it is not a responsible government. Of course, you may say that the Government will lend a hand when people are truly desperate, such as sending them to hospital.

The Financial Secretary seems to be very generous this year by setting aside $200 billion to provide 5 000 additional hospital beds in the next decade. But how is current situation of hospitals? In the influenza peak season that just past, the bed occupancy rate of the Yan Chai Hospital, for example, is 144% for the medicine department. When the Financial Secretary received treatment in the Queen Mary Hospital, he was an honourable guest and stayed in a first-class ward. However, some patients have to sleep in beds placed outside the toilet or in the corridor, and many patients were stranded in the accident and emergency department because no beds were available in the wards. The 44% over-occupancy rate was not an accurate figure as the number of medical patients 7198 LEGISLATIVE COUNCIL ─ 13 April 2016 having to stay in surgery or orthopaedics wards had not been counted. The Government seems to be very generous this year for it only reduces the funding for the Hospital Authority (HA) by $12 million. The Government has not increased the funding for the HA, but reduced the provision by $12 million, meaning that the HA can only get extra funding after its reserves are depleted. We have to be fair. The Government, including Carrie LAM, indicates that it will not waste money to implement universal retirement protection, but will instead improve healthcare services. However, the quality of our healthcare keeps deteriorating and patients have to endure greater suffering.

Financial Secretary, when I learn that the only new economic policy introduced by you is the pilot scheme on food trucks, I am exasperated. The business of food trucks cannot be operated by ordinary folks. The operators must know how to write reports, they have to join culinary art competitions, and they must know how to remodel vehicles. Most grass-roots people do not have such skills. If a Government, with fiscal reserves amounting to several hundred billion dollars and disposable funds amounting to several thousand billion dollars, has no regard for the people's aspirations, it does not matter who the Chief Executive is, there will be no future for Hong Kong. I hope the Financial Secretary will seriously respond to my questions. I also wish him the best in advancing his career in the Government.

Thank you, President.

MR SIN CHUNG-KAI (in Cantonese): President, this year's Budget is the ninth Budget presented by the Financial Secretary. It is also the last Budget presented by him in the current term of the Legislative Council, and may even be his last Budget. As in the past, the Financial Secretary has underestimated the surplus and continued to introduce relief measures year after year. The value of total retail sales in February, as recently announced by the Census and Statistics Department, plunged by 20% compared with the same period last year, marking not only its 12th consecutive month of decline but also its greatest decrease in 17 years. It is believed that the relief measures valued at $38.8 billion in this year's Budget can help ease the pressure of the slowdown in economic growth.

While the relief measures are not much different from those announced last year, the introduction of these measures is a positive response to the Democratic Party's proposals in that the Government has taken on board some demands made LEGISLATIVE COUNCIL ─ 13 April 2016 7199 by us over the years, including granting rates concessions for four quarters so that small-unit households can avail themselves of all the concessions to the full. In addition, the Government is going to raise the personal allowance to $132,000 (also in response to our demand); increase the dependent parent and grandparent allowances; and extend the validity period of the unused subsidies of the one-off electricity charges subsidy scheme after listening to the voice of the grassroots.

Still, the Budget deserves criticism for quite a number of reasons. Most of its proposals only seek to extend or augment existing measures. It says little about how to aid the development of young people, and shows an obvious lack of strength in the policy areas of caring for the underprivileged, the elderly, and so on. That said, this year's Budget is a step forward from last year's. We are happy to see the Government planning for the future, making long-term investments for society and launching targeted measures, which include using all the investment returns of $72.5 billion in total on the fiscal reserves for this year and last year to set up the Housing Reserve in support of future public housing development needs, making long-term financial preparations specifically for an increase in healthcare expenditure to cope with an ageing population, and setting aside a dedicated provision of $200 billion for a 10-year hospital development plan.

The Democratic Party welcomes and recognizes the forward-looking proposals made by the Financial Secretary this year, as opposed to his proposals in last year's Budget. As members of the public generally hope that the relief measures in the Budget can be implemented as early as possible, the Democratic Party will not take part in the filibuster during the Budget debate. We will only propose amendments in a focused manner to individual policy areas which we do not agree to under the relevant Policy Bureaux, or to the estimates of expenditure relating to certain Directors of Bureaux who have performed poorly.

President, nowadays, Hong Kong is rife with conflicts and our society is becoming polarized. Mindful of the tense political atmosphere, the Financial Secretary has devoted quite a lot of space in the Budget to expounding his views on the current situation. He has cited a famous saying by former United States President KENNEDY to point out that the turbulence and confrontations in our society are "man-made". Former Financial Secretary Antony LEUNG once quoted the lyrics of "Below the Lion Rock" in the first Budget compiled by him to strengthen his appeal to people to rebuild the spirit of collective tenacity for our society. This year, the Financial Secretary has quoted the lyrics of "憑着 7200 LEGISLATIVE COUNCIL ─ 13 April 2016

愛" (With Love) in the concluding remarks of his Budget Speech to point out that we should solve problems "with love". His grand talk about his local sentiments, his bid to revisit the Hong Kong spirit by mentioning the mettle of the Hong Kong Football Team, and his allocation of funds to support the promotion of locally-produced Cantonese films have all given us the impression that this is a Budget for Hong Kong people, unlike the policy addresses written by Chief Executive C Y LEUNG, who loves "special arrangements for special cases", for the sake of stirring up conflicts in order to build up political capital for himself.

President, the Hong Kong community needs a Chief Executive who will resolve conflicts, rather than one who keeps sowing dissension. Judging from his statements in the Budget, or what he said about ethnic identity in his blog the other day, Financial Secretary John TSANG has proactively demonstrated his intention to mitigate social hostility. I hope the Financial Secretary can keep the ball rolling.

On the political front, Hong Kong certainly has to find a way out, but it is impossible to resolve the stalemate solely "with love". On the economic front, Hong Kong has to be vigilant in times of peace. As an international financial centre, Hong Kong has all along enjoyed a good reputation internationally. Recently, the International Consortium of Investigative Journalists has released the preliminary findings of the Panama Papers investigation, which reveal that important political figures in many countries have used offshore companies to conceal the sources of their funds. In this Panama Papers saga, Hong Kong has also become a focus of attention because there are as many as 2 212 Hong Kong intermediaries involved ― the highest number in the world. This has inevitably tarnished Hong Kong's image as an international financial centre, although the vast majority of such intermediaries are legitimate businesses under the laws of Hong Kong.

Moreover, the Mainland's excessive interference in Hong Kong's daily operation in recent years has aroused the concern of international investors who are worried that Hong Kong's institutions will lose some of their independence in the long run. This is evident in the recent downgrades of Hong Kong's rating outlook to negative by two rating agencies, Moody's and Standard & Poor's, one after the other. Both of them have pointed out that the major reason for the downgrades is that Hong Kong has close financial and economic ties with the Mainland. This reflects that our economic development and sources of income are mainly dependent on the Mainland economy, and as a result, Hong Kong has LEGISLATIVE COUNCIL ─ 13 April 2016 7201 basically lost its economic independence. Any signs of trouble or even systemic risks on the Mainland will have negative spillover effects on Hong Kong. For instance, in the case of the stock market circuit breaker mechanism introduced on the Mainland at the beginning of this year, due to deficiencies in complementary systems such as those in the derivatives market, not only did the mechanism fail to achieve its intended effect, but on the contrary it caused an unnecessary market impact, and at the same time subjected both the Mainland and Hong Kong stock markets to severe selling pressure.

Hong Kong's clean reputation, its proudest boast, has also declined in international rankings. The 2015 Corruption Perceptions Index published by Transparency International, a global anti-corruption watchdog, shows that Hong Kong's ranking has dropped for the fourth consecutive year to 18th, whereas its rival Singapore ranks eighth, which is a relatively stable position. In the Index of Economic Freedom Report issued by the Heritage Foundation of the United States early this year, Hong Kong received its lowest score for "freedom from corruption" among all the components, with its ranking in the perceived level of corruption falling for three consecutive years from 12th in 2013 to 17th this year. The Foundation specifically commented that Beijing's ongoing efforts to erode the power of the Judiciary and the Legislative Council of Hong Kong and to intervene in the economy could undermine the rule of law.

The competitiveness of an international financial centre depends on many factors, including an effective and clean government, its legal system, human resources, clustering of demand, a robust regulatory system, a safe, efficient and sophisticated financial infrastructure, as well as efficient accounting and other support services. As major international financial centres in the Asia-Pacific region, Hong Kong and Singapore are always regarded as rivals, and their rankings in different competitiveness reports are often very close to each other. However, in the Global Financial Centres Index compiled by a British think tank last week, Hong Kong was overtaken by Singapore as the third largest financial centre. The respondents were particularly concerned about the increasing implications of China's financial, political and economic activities for Hong Kong. This goes to show that the negative impact of the Mainland factor on Hong Kong has caught the attention of different reports.

Some reports even point out that "Nylonkong" may become "Nylonpore". With the world's economic centre of gravity shifting to the East amid increasingly fierce international competition, we should explore how to enhance Hong Kong's 7202 LEGISLATIVE COUNCIL ─ 13 April 2016 financial competitiveness and further strengthen Hong Kong's ability to attract international financial activities. While Hong Kong is an international financial centre, its market development is unbalanced, and the size of its foreign exchange market or bond market is not commensurate with the strength expected of an international financial centre. Besides, competition between financial centres is also reflected in their competition in respect of financial innovation, which covers the development of financial derivative products and of financial asset securitization. In contrast to London and New York, Hong Kong falls far short of what it takes to develop into an innovation centre for financial products in the region due to the absence of a well-developed bond market, the lack of locally-based major international banks, and an insufficient number of investors.

The scale of Singapore's economy is comparable to that of Hong Kong's, but in terms of per capita GDP, Singapore has already surpassed Hong Kong. Singapore's real economic growth for the past five years is 21.4%, higher than Hong Kong's 15.6%, showing that Singapore's economic momentum is stronger. If we compare the financial activities of the two places, we will find that Hong Kong is more reliant on its financial industry, which has invariably accounted for 16% of its GDP over the past five years. By contrast, while the contribution of Singapore's financial industry to its GDP has increased from 10% in 2010 to 13%, the country is less reliant on its financial industry when compared to Hong Kong. The cumulative year-on-year growth of Singapore's financial industry from 2010 to 2014 is 43%, higher than the 29% growth of its Hong Kong counterpart over the same period. One of the reasons for that, I believe, is that Singapore started to develop into an offshore Renminbi (RMB) centre in 2013, although as at the end of 2015, the amount of RMB deposits in Singapore was only less than RMB 200 billion yuan, whereas that in Hong Kong reached over RMB 800 billion yuan.

Given the internationalization of the RMB in recent years, and that the Mainland capital market has yet to be fully opened up, offshore RMB centres have a key role to play in providing services for overseas investors. Meanwhile, the RMB will be included in the Special Drawing Rights (SDR) currency basket of the International Monetary Fund (IMF) with effect from 1 October 2016 to become the fifth currency alongside the United States dollar, euro, Japanese yen and pound sterling in the SDR basket.

With the ongoing internationalization of the RMB and the establishment of numerous new RMB clearing banks, more and more offshore RMB centres apart from Hong Kong will emerge one after another. While this will provide more LEGISLATIVE COUNCIL ─ 13 April 2016 7203 business opportunities for Hong Kong's offshore RMB market, it also means that we will face more competition.

On the one hand, Hong Kong should seize the opportunities brought about by the Mainland's financial reform, but on the other, we should also tap into the international market. Compared with Singapore, we do have inadequacies in our foreign exchange and bond markets. I hope that the Financial Secretary can make further improvements in these two aspects while maintaining Hong Kong's status as an international financial centre.

Now let us turn to our stock market. Hong Kong has been the focus of the global initial public offering (IPO) market in recent years. Our total funds raised through IPOs in 2015 amounted to $261.3 billion, which has put us back to the top of the IPO rankings for the first time since 2011. Yet Hong Kong's IPO activities are dominated by Mainland companies, with funds raised by them accounting for 92% of the market total. Our stock transactions have become increasingly reliant on Mainland enterprises listed in Hong Kong, as the trading volumes of relevant Chinese stocks have consistently accounted for over 50% of our total stock turnover during the past five years. In contrast, the source mix of listed companies in Singapore is more diversified than that in Hong Kong, as only 14% of the total stock turnover in Singapore comes from Chinese companies, while 31% of it comes from overseas non-Chinese companies.

Apart from attracting Mainland enterprises to list in Hong Kong, we should also upgrade our IPO platform and attract more overseas enterprises to list here, so as to enable the continuous expansion and internationalization of the local market. At the same time, we should enhance cross-boundary regulation and enforcement to protect the rights and interests of investors investing in overseas companies listed in Hong Kong.

While Hong Kong is by no means inferior to Singapore in terms of our tax system, financial freedom and talent, we have long been focusing on developing our stock market at the expense of the development of our bond, commodity trading and foreign exchange markets, which are thus lacking in depth. Unlike Hong Kong, which has become highly dependent on the Mainland in recent years, Singapore, as a member state of the Association of Southeast Asian Nations, has a more diverse pool of trading partners, so even if the Mainland experiences an economic downturn, the impact on Singapore will be relatively mild.

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Singapore's status as a financial centre is attributable to many factors, the most attractive of which is the provision of tax concessions. In the past, the Singapore Government implemented various preferential policies such as tax exemption to attract foreign banks; consequently, it succeeded in establishing an Asian dollar market, paving the way for Singapore's rise as a financial centre in the Asia-Pacific region.

In the latest financial centre rankings released last week, Hong Kong was overtaken by Singapore. This serves as a timely reminder to us that Hong Kong must expedite the construction of a comprehensive and diversified international financial market system and keep expanding the depth and breadth of its financial market before it can gain a firm foothold amid intense competition between international financial centres. Otherwise, Hong Kong will only degenerate into a financial centre of China.

As far as Hong Kong people are concerned, Hong Kong's status as an international financial centre is the lifeblood of its economic development. As for Beijing, perhaps the development of the Mainland … In the eyes of Beijing, Hong Kong no longer has any significance, except that it is still an international financial centre. We must take a longer view and protect our own advantages.

I hope that the Budget presented by the Financial Secretary this year can be passed in the Legislative Council smoothly, so that the various relief measures can be implemented as early as possible in response to public aspirations.

MR WONG KWOK-HING (in Cantonese): President, good morning. Regarding the examination of the 2016-2017 Budget, I have all along adhered to the principle of "calling a spade a spade", conducting serious scrutiny and making fair praises and criticisms. In the previous 21 sessions of special meetings of the Finance Committee (FC), I only missed one session due to a clash with other official duties. During these 20 special FC meetings, I have raised a total of 32 oral questions and have received positive feedbacks from the principal officials. I welcome this Budget for it has responded to a number of requests from The Hong Kong Federation of Trade Unions (FTU), and I would like to highlight three areas in particular.

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First of all, I thank the Financial Secretary for responding to our strong request for an extension of the validity period of the unused electricity charges subsidy, so as to enable the elderly singletons and elderly couples to use up the subsidies. Originally, the validity period of the relevant scheme will expire across the board on 30 June this year, but it is now extended to 30 June 2018. We welcome the extension as the money involved has already been brought to credit. What is more, this measure also promotes energy saving, environmental protection and respect for the aged. I noticed that in response to my request for a further extension of the validity period or an implementation of alternative measures, the Financial Secretary said that "consideration will be given". I have jotted down his reply and hoped that the relevant measure would not expire across the board on 30 June 2018.

Secondly, I wish to point out that after the Budget is approved and comes into effect, people with loss of one lower limb will finally be allowed to apply for Disability Allowance and concessionary fare. I therefore commend the relevant working group led by Secretary Matthew CHEUNG and Miss Annie TAM for their longstanding hard work. The working group has not only enabled people with loss of one lower limb to apply for Disability Allowance, but has also suggested a number of measures to enhance the care of people with disabilities during the review. I welcome these measures and hope that they can be put into practice as early as possible.

Thirdly, I would like to thank Secretary for the Civil Service Clement CHEUNG. At the special FC meetings, I have pointed out time and again that while the five-day work week has been implemented in the Civil Service, it has yet to apply to the majority of staff serving under the Food and Environmental Hygiene Department (FEHD) and the Leisure and Cultural Services Department (LCSD). However, according to the latest news received by me, the Bureau will soon introduce a ground-breaking measure for the FEHD. I welcome it and hope that colleagues of the FEHD will take note of my highlight today. I also hope that this ground-breaking measure of five-day work week will be implemented as soon as possible.

President, with regard to this Budget, I have five recommendations, all of which are based on the consultation exercise currently conducted by the Government on the retirement protection system. Amidst an ageing population, people would have a longer lifespan, which is good, but can they enjoy their 7206 LEGISLATIVE COUNCIL ─ 13 April 2016 twilight years after retirement? Will there be comprehensive healthcare for the elderly? Can we put love, respect and care for the elderly into practice and reflect in government policies? Although the consultation exercise conducted by the Government on retirement protection is still underway, I am afraid that there is still a long way to go before a proposal can be submitted and come to fruition. I will therefore put forward five recommendations to urge the Government to, before obtaining the results of the consultation exercise or formulating any policy on retirement protection, take the initiative to introduce some policies and measures to bring about breakthroughs, with a view to laying down a stronger foundation for the future retirement protection regime and fostering a better social atmosphere.

Firstly, I urge the Government to take the lead to abolish the Mandatory Provident Fund (MPF) offsetting mechanism and act as a role model of a good employer. There is no doubt that the abolition of the MPF offsetting mechanism is very controversial, but we cannot just sit back and do nothing because of the possible disputes. In fact, from the launching of the MPF offsetting mechanism in 2001 to the third quarter of 2015, hard-earned money from employees totalling $2.513 billion has been offset. In that case, why does the Government not tackle the simple issues first and then the difficult ones, and take the initiative to act as a role model of a good employer? Having the Government take the lead can prevent labour disputes, and save the trouble for obtaining the consent of employers.

What is more, the Government has currently employed 12 000 contract staff, and among them 7 000 have a contribution period of more than two years. According to a question raised on the Budget, in the past year, the government department which has the largest number of staff whose MPF contributions have been offset is the Buildings Department, where 281 people were affected and involving as much as $2.715 million. There are tens of thousands of government contract staff, outsourcing staff, subvented sector staff (including staff members of the Legislative Council Secretariat and Members' assistants), as well as workers employed by outsourcing contractors under government public works and services contracts, all of them will benefit from the good practice of the Government's abolition of the MPF offsetting mechanism on its own initiative. Therefore, I hope that the Government will consider giving priority to deal with the offsetting problem of these employees.

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As for the second and third proposals, given that under the existing Old Age Allowance (that is, the "fruit grant"), elderly persons aged 70 or above will receive $1,235 every month without undergoing any means test, will the Government proactively consider lowering the age requirement to 65?

Another example is, according to the existing Elderly Health Care Voucher (EHV) Scheme, elderly persons aged 70 or above will receive $2,000 every year and they also do not have to undergo any means test, will the Government consider lowering the age requirement to 65 as well? With regard to the above-mentioned second and third recommendations, if the Government agrees to put them into practice, they would be implemented ahead of the establishment of the retirement protection scheme. Respect for the elderly should not be divided into two levels. Noting that MPF scheme members can withdraw accrued benefits at the age of 65, which is a proof of their elderly status, what is the point of drawing another line at the age of 70? Take the EHV as an example. As I have pointed out during the special FC meetings, if the Government spends an additional $700 million every year, 398 500 elderly persons aged between 65 and 69 will benefit. In fact, the annual voucher expenditure is only about $700 million, but this amount of money will enable elderly persons to seek medical treatment before their sickness gets too serious, so why should we be reluctant to spend the money?

The fourth recommendation is to extend the Public Transport Fare Concession Scheme to trams. I have actually raised this issue time and again, and the Hong Kong Tramways Limited has already offered a concessionary fare of $1.1 for the elderly and eligible persons with disabilities. And yet, if the Government spends a small extra sum of money, which is calculated to be $12 million a year or $1 million a month, it would be able to extend the fare concessions to trams. Recently, I have received a reply from Secretary Matthew CHEUNG dated 6 April, which contains a very importance message (I quote): "The Government is willing to consider extending the fare concessions to trams." I want to put this on record and also thank Secretary Matthew CHEUNG for his reply dated 6 April. He did mention other things in the letter, but this remark is the most insightful and I hope that the Government will put it into practice as soon as possible.

My last recommendation is to call on the Government to further consider offering free rides for the elderly and eligible persons with disabilities after the full implementation of fare concessions. On this issue, I have said time and again that elderly people and eligible persons with disabilities of Hong Kong are 7208 LEGISLATIVE COUNCIL ─ 13 April 2016 now entitled to free rides in many cities north of the Shenzhen River. As Hong Kong stands in leading positions in respect of economic development, it can absolutely afford to provide free rides, so I hope that the Government will actively consider looking into the matter after the full implementation of the $2 Concession Scheme to various modes of transport.

President, last of all, concerning the third point that I would like to discuss about the Budget, although the Budget delivered by the Government is a very good one, it was wasted due to filibustering. In a written question on the Budget, I asked about the loss and impact caused by quorum calls made by Legislative Council Members of the opposition camp for filibustering purpose. Please look at this comic clock drawn by me. A total of 1 164 quorum calls had been made over the past four years up to the end of February 2016. Assuming that each Council meeting lasts for about nine hours, if we divide the time taken up by these 1 164 quorum calls, which is 347 hours, by nine, we will have the number of days that could have been used for holding Council meetings. According to the data of last year, $2.55 million of public funds would be spent on each Council meeting day. This amount only covered the utilities costs of the Legislative Council, the salaries of the Secretariat staff, as well as the allowances of Members' assistants, but excluding the remuneration of government officials. Based on the above costs, $96.9 million of public funds had been wasted due to quorum calls made by Members for the purpose of filibustering, meaning that nearly $100 million had gone down the drain. If $96.9 million was used to provide free tram rides, the offer could last as long as eight years. This is no longer simply an issue of giving out canned luncheon meat and canned mud carp. If $96.9 million was used to finance the EHV Scheme, it would enable all elderly persons aged 65 in Hong Kong to use EHV for an entire year.

President, on the other hand, I also wish to talk about the impact of filibustering conducted by Members of the opposition camp on us. Members may notice from my question that only two public works projects have been approved so far, involving $200 million, whereas 70 projects amounting to a total of $60 billion are still pending approval. Originally, thousands of members from the construction industry planned to hold a march last Sunday, but it was rescheduled due to the rain. In fact, the situation of the construction industry also reflects the resentment of Hong Kong people at large, so I hope that Members of the opposition camp and those engaging in filibustering (The buzzer sounded) … would show mercy …

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PRESIDENT (in Cantonese): Mr WONG, your speaking time is up.

MR WONG KWOK-HING (in Cantonese): … and stop filibustering.

MS STARRY LEE (in Cantonese): President, recently, political parties were formed by different groups of young people in the community, advocating "self-determination through plebiscite" or even "" as their election platform. As a result, ideas such as "Hong Kong independence", "self-determination" and "separatism" become the talk of the town under the media's spotlight.

President, the call for "Hong Kong independence" has no legal basis, it will definitely fail and will only lead to a dead end with no prospect whatsoever. As Hong Kong is an inalienable part of our country, any attempt to advocate "Hong Kong independence" will only further aggravate the tensions between Hong Kong and the Mainland and go against the Basic Law. The idea of the so-called "self-determination" only creates social division and intensifies social dissension, resulting in further constriction of space under "one country, two systems". Any person who ponders on the issue rationally would know that "one country, two systems" is the best political choice for our country and Hong Kong in the past, at present and in the future.

President, notwithstanding the criticisms, we do live in an era full of conflicts. Faced with Hong Kong-China conflicts, wealth gap and generation gap, we must carefully consider the social causes of such conflicts, the messages sent out by the people, as well as the responses to be made by the Government, including the Financial Secretary and public officials present in the Chamber now. How can resources be allocated to alleviate different social conflicts?

Upon careful reflection, it is not difficult for us to understand why the present era is rife with conflicts, especially why young people choose to act radically. In the past, there were abundant opportunities in Hong Kong as people could move upward in society. Young people could become successful by working hard, even if they were born in grass-roots families. But nowadays, for young people in Hong Kong, the society has changed. Even if they studied hard and after graduation, worked hard for 10 years, their salaries are not high; most of them may just earn some $20,000 per month. Though better educated, 7210 LEGISLATIVE COUNCIL ─ 13 April 2016 they are worse off than their parents in terms of the opportunity for upward social mobility and the capability to improve the standard of living. Young people are constantly under the pressure of downward mobility. Even if they want to get married, home ownership is beyond their means. Nowadays some young people would actually register for marriage first in order to apply for subsidized public housing. Afterwards, they would live separately with their parents for a long time for they cannot afford to buy their own home.

President, compared with our generation, the younger generation might have higher academic qualification and spend longer hours at work, why then do they have to worry about the threat of downward mobility? Why is home ownership beyond the affordability of young married couples?

President, the world has changed indeed. Owing to globalization, academic inflation and advanced economic development, it is now increasingly difficult for young people to move up the social ladder. The problem is not unique to Hong Kong. Instead, it is a challenge facing various governments around the world. These young people are without hope. As Hong Kong is in the process of political restructuring with the political system under development, some young people put the blame of social injustices and difficulties in upward mobility on the unfairness of the system and strive to promote institutional reform. Lacking in patience, they consider that more radical actions should be taken, including "using force against violence" and "self-determination through plebiscite". Some even believe in the illusion that "Hong Kong independence" is a way out.

President, around the time when the Budget was due to be delivered, that is, during the Lunar New Year, serious riot broke out in Mong Kok. The direct cause of the incident is certainly the provocation and incitement by a handful of rioters. Nonetheless, with successive social incidents from Occupy Central to throwing bricks, the public are taking actions to push for expeditious reforms by politicians (especially the Government) in order to resolve conflicts. Otherwise, with conflicts snowballing and grievances building up, society will become more and more restless.

President, apart from social disharmony, Hong Kong is also rife with economic problems. As pointed out by the Financial Secretary in paragraph 15 of the Budget speech, "the global economic climate has continued to be unsteady, marked by increasing risks, amid the modest and patchy economic growth of LEGISLATIVE COUNCIL ─ 13 April 2016 7211 advanced economies, downward pressures on emerging markets and heightened geopolitical tension." With the external environment being highly volatile, the number of visitor arrivals has been declining. Since the implementation of "one trip per week" Individual Visit Endorsements in April last year, the number of visitors under the Individual Visit Scheme has plunged by 40% from 1.52 million in January last year to 890 000 in December last year.

Beset by internal and external strifes, Hong Kong's economy is in the doldrums, with the tourism and retail industries, as well as small and medium enterprises (SMEs) bearing the brunt and being the hardest hit. As people from all walks of life are subject to substantial livelihood pressures, society is fraught with conflicts. The SAR Government must hence implement timely measures to boost the economy, support local enterprises and safeguard people's livelihood.

It is against such a macro environment that the Financial Secretary delivered the ninth Budget in his term of office. The Democratic Alliance for the Betterment and Progress of Hong Kong (DAB) holds that the Budget has put forward comprehensive proposals in response to different demands in the community. It has also made available financial provisions to dovetail with various proposals outlined in the Policy Address. On boosting the economy, specific programmes and complementary measures have been set out in the Budget. On relieving livelihood pressures, the Budget has also proposed a number of concrete measures specifically for the grassroots and the middle class. The Budget is thus commendable.

In particular, it is worth mentioning that as suggested in the Budget, with global economic gravity shifting towards the East, as well as the breakthroughs in information technology development, Hong Kong must grasp the opportunities presented by the "new economic order" in the new world economic environment by vigorously promoting the development of innovation and technology in Hong Kong. The Budget has pointed a right direction for Hong Kong. Counting together the resources allocated to the Hong Kong Science and Technology Parks Corporation, the Budget has made available as much as $17.3 billion to promote innovation and technology development. Such a strong and bold move is worth commending.

Yet, I would like to remind the Financial Secretary, Secretaries of Departments and Directors of Bureaux, given the high land premium, high property prices and high rentals in Hong Kong, some young couples cannot 7212 LEGISLATIVE COUNCIL ─ 13 April 2016 afford home ownership after getting married; the poor must still live in "sub-divided units"; small businesses hardly have any room for survival; young people are beset by insufficient undergraduate places, heavy debts upon graduation, little business start-up opportunities, as well as immense livelihood pressures; wage earners have their Mandatory Provident Fund (MPF) benefits eroded by administrative fees, management fees or the offsetting arrangement; the elderly have little livelihood protection and must wait for a long time for subsidized care home places. These long-standing knotty problems are still haunting us.

President, I must say that in this Budget, the Financial Secretary's determination and efforts to tackle the deep-seated conflicts in society are insufficient. In the absence of adequate corresponding measures and resource allocation, social conflicts still remain unresolved.

In order to draw on collective wisdom to promote economic development and improve people's livelihood in a targeted manner, the DAB organized three round table meetings in October and November last year on the following topics: "Options for Hong Kong's macro-economic policy adjustment", "Competitive edges of Hong Kong's traditional industries and the way out" and "People's livelihood in Hong Kong: The dilemma and the breakthrough". Experts and academics were invited to share their views on these issues and make recommendations to resolve the relevant problems. Afterwards, we also collected views from the public in the districts extensively. Eventually we put forth 28 key recommendations to the SAR Government, involving 222 concrete proposals as part of our expectation for the Policy Address and the Budget. The SAR Government accepted some of our recommendations, including making greater resource allocation for innovation and technology industries in order to promote economic development and create more opportunities for young people. In terms of alleviating people's burdens, the Government also accepted our proposals concerning the waiver of rates, tax rebate, increasing tax allowances, and so on. In particular, we must specially commend the financial commitment made by the Financial Secretary on improving healthcare services.

To our disappointment, quite a number of measures and views proposed by us have not been incorporated into the Budget. In respect of relief measures, the Government has not waived the rent of public rental housing tenants for one month. Other proposals which the Government has failed to take on board include lowering the rates percentage charge of owner-occupied properties, LEGISLATIVE COUNCIL ─ 13 April 2016 7213 particularly those owned by the elderly, introducing tax deductions for residential rentals and increasing the entitlement years for home loan interest deduction to 20 years, so as to further relieve the burden of the middle class. The DAB expresses disappointment in this regard because we are really convinced that Hong Kong is financially capable to implement further relieve measures.

In terms of reducing the livelihood pressures of wage earners, the Government has not accepted the DAB's proposal to set up a fare stabilization fund, so that the dividends it received from the MTR Corporation Limited (MTRCL) can be used to moderate the rates of MTR fare increases. After the public listing of the MTRCL, the Government has indeed given the public the impression that it could no longer properly perform its role as the gatekeeper. Why can't the Government use the dividends it received from the MTRCL to reduce the extent of fare increases? The objectives of listing the MTR are to improve its operational efficiency and increase its competitive edges in the market. As the dividends are paid by the MTRCL to the Government, why can't the funds be used for reducing fares? With the dividends received, the Government is well-placed to relieve the burden of fares on the public. I hope the Financial Secretary can break away from his old mindset on the use of public funds so that the dividends received from the MTRCL can be used to reduce fares, which in turn can also help alleviate social conflicts to a certain extent.

Apart from the fares paid by the public, small businesses can hardly survive as a result of land shortage. Many members of the public are indeed disheartened by the overbearing practice of the Link Asset Management Limited (the Link). As the Secretary of Department in charge of land development, the Financial Secretary should have a clear idea about the monopoly of the Link. That is why we must find a way out for districts plagued by the Link's monopoly, including the provision of open bazaars or the construction of new markets. Can the Financial Secretary make available sufficient resources to ensure the provision of public markets in those districts so as to give local residents another choice?

President, back to the Budget, the Government really has not proposed major initiatives or earmarked sufficient resources to support small businesses. Meanwhile, it would take some time before the food truck scheme, which we have proposed time and again, can be put into actual implementation. We must still keep waiting.

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President, Hong Kong is now beset by social unrest, immense livelihood pressures, as well as unresolved deep-seated conflicts. As such, the Government need not and should not wait for the next round of policy address and budget to introduce the necessary measures or make resource provision to tackle these problems. Instead, the Government should continue with the modus operandi of rolling out policies and measures as soon as they are ready, so that more targeted actions can be taken to alleviate conflicts and further relief measures can be implemented. I am convinced that the public will definitely support such an approach.

President, another criticism in society against the Financial Secretary and the Government is that controversial issues such as retirement protection and the MPF offsetting arrangement have yet to be dealt with properly. While I understand that it takes time to resolve these matters, and consultation has been conducted by the Government, the Financial Secretary can actually take some actions before completion of the consultation or enactment of the relevant legislation, so that the elderly can live a better life and have more protection. That is surely the consensus of the public, we need not wait until the consultation is completed or legislation enacted.

At present, people normally retire at the age of 60 to 65, but they must wait till they are 70 years old before they are eligible for the non-means-tested Old Age Allowance (commonly known as "fruit grant") or the Elderly Health Care Vouchers. The arrangement is unreasonable. Given the sound financial position of the Government, it should provide adequate protection to retired elders. Hence we have put forward a number of suggestions to the Financial Secretary. Firstly, the requirement for elders aged between 65 and 69 to pass a means test before they can receive the "fruit grant" should be abolished. Though the amount of "fruit grant" is small, elders can go out for meals with the money and enjoy their life. Secondly, the age requirement under the Elderly Health Care Voucher Scheme should be relaxed to cover elders aged between 65 and 69, so that the elders would not be reluctant to seek medical treatment for financial concerns. Thirdly, the asset limit of the Old Age Living Allowance should be raised so as to benefit more elders. Given our fiscal position, I am convinced that the Government has the means to implement the above measures before the relevant consultation is completed or within its current term, so as to offer more protection to the elders.

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Regarding the MPF offsetting arrangement, the Government must assume a more proactive and committed role before the problem can be resolved. To address this issue, the DAB calls on different sectors in society to get engaged in discussions, so as to find a way out for the MPF offsetting arrangement. We have invited representatives of the business community, the labour sector as well as the academics to take part in discussions with the aim of pooling their ideas on how to break the deadlock. The conclusion is very positive as we all agree that further discussions can be held. We also opine that the Government must play its part with stronger commitment, in particular, commitment in resource provision.

If, for the sake of resolving the problem, the entire burden is placed on the employers, asking them to bear all the cost of offsetting, I think it would be very difficult to forge a consensus, while the operating costs of SMEs would be increased directly. According to our previous studies, the offsetting of severance payments and long service payments can be dealt with separately. To show the Government's commitment, I have proposed to the Financial Secretary that relevant resources should be set aside by the Government first, for example, to set up a fund with $3 billion to relieve the pressures of offsetting the MPF funds. Apart from showing the Government's commitment, such a move would also be conducive to striving for concerted efforts from all sectors in finding a way out of the impasse of the MPF offsetting arrangement.

President, in this conflict-ridden generation, the Government must act with courage and commitment and conduct in-depth studies before strategies to resolve the conflicts can be formulated step by step. President, with a good foundation, the advantage of "one country, two systems" and hefty fiscal reserves, Hong Kong can definitely break the deadlock and identify the solutions as long as we are willing to hold discussions and work together.

President, as many people would know, the Financial Secretary is a movie fan, and I am sure he remembers the quote: "With great power comes great responsibility." For the Financial Secretary, it would be a case of: "With great money comes great power." According to some calculations, during the nine years in his term of office, the Government's accumulated fiscal surplus amounts to some $860 billion, yet the accumulated increase in public expenditure over the past 10 years is even less than half of the accumulated public revenue. Under the circumstance, it is hardly surprising that the Treasury is "flooded by cash". With such handsome fiscal reserves, the Government should be able to handle 7216 LEGISLATIVE COUNCIL ─ 13 April 2016 various social conflicts, and the public would legitimately expect the Government to manage public finances in keeping with the times, with commitment and a bold vision. I hope the Financial Secretary's fiscal management mindset can keep abreast with the times, so that public funds can be used more proactively to enable Hong Kong to grasp the present opportunities, invest in the future and resolve the deep-seated conflicts.

President, I so submit.

MR CHRISTOPHER CHEUNG (in Cantonese): President, the Budget announced in February is the ninth Budget delivered by Financial Secretary John TSANG since he took office in 2008. Regarding public ratings, this Budget does not have the highest score among the nine budgets for the reason that this year, the Financial Secretary has deducted some of the relief measures provided to the grassroots. Yet, with regard to overall impression and appraisal, the Budget has won the recognition and commendation of a lot of people. As the Financial Secretary has said, in Hong Kong today, besides money, the "heart" also matters. The Financial Secretary expresses through the Budget his love and feelings towards Hong Kong people, which has impressed the public.

As a Member from the financial services sector, I will not talk about "heart" matters, because I want to talk about money and financial matters first. In this year's Budget, the Financial Secretary has put the promotion of innovation in an important position, and he has specifically mentioned a number of financial and technological innovation initiatives. I endorse the views of the Financial Secretary. If our society lacks innovation capacity, it will be eliminated by other regions having new thinking. Hong Kong's development from a small fishing village to an international financial centre today is attributed to the incessant hard work and enterprising spirit of Hong Kong people, as well as the promotion of innovation and transformation, and that is how Hong Kong of today comes by.

In recent years, financial and technological innovation has been the most popular topic around the world. People generally believe that this is an important opportunity in the new economic order, and in a society with the financial sector as the main backbone, this is also the engine for future social development and growth. I greatly support the setting up of a steering group by the Government to handle matters relating to the development of financial technologies. There are two most important issues in respect of the LEGISLATIVE COUNCIL ─ 13 April 2016 7217 development of financial technologies: first, the speed and efficiency of development, given that time determines success or failure; second, the failure to suitably relax regulation and the practice of following the beaten track.

The Financial Secretary has specifically mentioned "Blockchain" technology in this year's Budget. This technology was initially applied to online currency but it can now be applied in most online transactions, including stock trading, equity transfer, and so on. The NASDAQ Stock Exchange in the United States is actively preparing to become the first stock exchange to apply this technology while some large foreign firms are also actively studying the matter. However, Hong Kong is still at a very preliminary stage; we have started too late and we are catching up very slowly. How can we compete with the others when everyone is racing against time?

Insofar as regulation is concerned, I would like to commend Hong Kong for having a sound financial market regulatory system. Take for example the stock market. During the violent fluctuations in the capital market in the middle of last year, the regulatory regime of the Securities and Futures Commission (SFC) was affirmed and highly appraised by the international community and media. Effective financial regulation can properly safeguard our society and public interests, which is very important. Yet, over-regulation, following the beaten track and failing to keep abreast of the times will greatly hinder the development of the market.

In respect of peer-to-peer (P2P) lending and equity crowdfunding, for example, many regions have actively made efforts and taken the initiative to perfect the legislation, so as to provide the room suitable for the development of the industry. However, in the report of the Steering Group on Financial Technologies, technology companies are asked to examine if there is room for operation under the current regulatory environment. This approach contrasts greatly with those adopted in other markets which take the initiative to proactively seek ways to resolve regulatory issues.

Concerning the securities industry, a few years ago, we wanted to make use of the new prevailing technologies to expand the market, which included the proposal of using the instant messaging software on mobile phones to place orders, as well as using the highly sophisticated online videos for verification in opening accounts. Concerning these two proposals, as the SFC was fettered by 7218 LEGISLATIVE COUNCIL ─ 13 April 2016 old conventions, it kept stressing that the industry must comply with the existing legislation and refused to allow us to use financial technologies for market expansion. How can the financial sector keep abreast of the times and have sustained development?

According to the Financial Centres Index released early this month by a consultant in the United Kingdom, the third position of Hong Kong has been taken over by Singapore. Singapore has been actively developing financial services, and it has long regarded Hong Kong as an imaginary enemy. Last month, Singapore approved the establishment of a crowdfunding platform for equity, and even for debt crowdfunding. We have recently completed the scrutiny on the legislation to reduce profits tax for corporate treasury centres by 50%. Singapore has reacted very quickly and reduced the tax rate to a level lower than the required level in Hong Kong. This well demonstrates the ambition of Singapore. If we do not work harder and take the initiative to actively develop financial and innovative technology, so as to create an ideal business environment, I am afraid that the term "Nylonkong" ― New York, London and Hong Kong would become obsolete in the future and would be replaced by the term "Nylonpore" ― New York, London and Singapore.

On the financial front, I would like to talk about China-Hong Kong integration. In November two years ago, Shanghai-Hong Kong Stock Connect was officially launched and we started implementing the mutual recognition of funds in the two places. I believe that with Hong Kong being an international financial centre of our country, the co-operation between the local financial market and that of the Mainland will be unabated. In last year's Budget, the Financial Secretary proposed that we should work with the securities industry to stage roadshows in the Mainland to promote Shanghai-Hong Kong Stock Connect and the upcoming Shenzhen-Hong Kong Stock Connect. Today, when Premier LI Keqiang indicated that efforts would be made to strive for the launch of Shenzhen-Hong Kong Stock Connect within this year, the Financial Secretary has unexpectedly cancelled the roadshow scheme. In the Administration's earlier reply at a special meeting of the Finance Committee, the Government only indicated that it would review the scheme in due course. In my opinion, before the launch of Shenzhen-Hong Kong Stock Connect, the Financial Secretary should activate the scheme as soon as possible and get prepared, so as to ensure its successful implementation.

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President, having talked about money, I would like to talk about what is in my heart. Hong Kong is in my heart and China is also in my heart. Another highlight of the Budget is that it is rather "local". The Financial Secretary cites Cantonese songs, supports Cantonese movies and talks a lot about local awareness, truly expressing his love of Hong Kong. His emotional presentation has won much applause for the Budget and for himself.

Nevertheless, I think the Budget is commendable in the sense that while the Financial Secretary talks a lot about local issues, he has explicitly and specifically explained to the public that localism does not mean violence and it is not the same as "Hong Kong independence." President, at present, some radicals have been making trouble in the name of localism, they initiated the liberation protests and incited the Mong Kok riot which broke out on the first night of the Lunar New Year. Their wishful thinking is to conceal their violent acts in the name of localism, and also to confuse the public in the name of localism, instigating the "Hong Kong independence" thinking.

In the face of "localism" being hijacked, the Financial Secretary has not deliberately evaded; on the contrary, he frankly and sincerely expressed his sentiments for Hong Kong. In response to a question about the Budget, the Financial Secretary said that the term "localism" should not be monopolized, society should not encourage nor should it accept the so-called "militant behaviour". The Financial Secretary's attitude of not evading sensitive issues and sincerely expressing his feelings is commendable. His explicit statement has torn apart the hypocritical masks of a handful of radicals, exposing to the public the essence of "Hong Kong independence". This helps to curb the spreading of the thinking of "Hong Kong independence".

In response to the increasingly rampant behaviours of many "Hong Kong independence" supporters, the Budget has made various arrangements. For example, it sets aside $160 billion for the Constitutional and Mainland Affairs Bureau to organize activities through different channels to promote public awareness and understanding of "one country, two systems" and the Basic Law. The Budget also earmarks $126 million for the Home Affairs Bureau to fund exchange opportunities in the Mainland for young people in Hong Kong. These funding arrangements will help Hong Kong people, especially young people, have a correct understanding of "one country, two systems" and the Basic Law. Funding Mainland exchange programmes can also enhance young people's 7220 LEGISLATIVE COUNCIL ─ 13 April 2016 awareness and understanding of our country. I consider these funding arrangements essential and practical, and I support them without reservation.

President, the intent of such funding arrangements is good, and if they are properly implemented, it will undoubtedly help Hong Kong people understand that the relationship between Hong Kong and China is the relationship between local and central authorities. The two places are interdependent; there should be mutual benefits and prosperity instead of mutual exclusion and severance. Sadly, we notice that in recent years, some people, especially young people, do not have strong feelings towards our country and the nation, and some even have the idea of splitting our country such as "Hong Kong independence". Recently, some of these people have even blatantly formed political parties, stating explicitly that their purpose is to fight for the independence of Hong Kong, which is an extremely dangerous message.

In this regard, I sincerely hope that the authorities would review the effectiveness of promoting "one country, two systems" and the Basic Law, as well as the activities such as funding young people in Hong Kong to go to the Mainland for exchanges. Such activities should be promoted in ways that are more acceptable to the public, especially young people, so that the relevant policies and measures can be better implemented and become more effective, and the money will also be well spent.

Some people have recently put forward the ideas of "Hong Kong independence" and national self-determination by Hong Kong people. I believe that many Hong Kong people who are proud to be Chinese would feel the painful pinch. For thousands of years, Hong Kong has been an integral part of China. Even during the colonial times, in times of disasters in China, such as flooding in East China in 1991, Hong Kong people raised $470 million in just 10 days for disaster relief. The saying that "blood is thicker than water" vividly described the relationship between Hong Kongers and Mainlanders.

The Financial Secretary said at the end of the Budget speech that "With love, I believe there is a way out". That is well said, calling upon us to love Hong Kong and stimulating our feelings of cherishing Hong Kong. Only in this way can Hong Kong have an opportunity to achieve cohesion and find a new pathway. I hope Hong Kong people would love our Motherland, cast aside prejudice and antagonism, perceive the development of our Motherland objectively, and seize the opportunities brought about by the development of our LEGISLATIVE COUNCIL ─ 13 April 2016 7221

Motherland. I hope that Hong Kong people, especially young people, would visit the Mainland to get some personal experiences. I hope that they would be proud of the progress of our Motherland and its rapid economic development, and they would also be proud of being Chinese.

With these remarks, I support the passage of the Budget. Thank you, President.

MR LEE CHEUK-YAN (in Cantonese): President, the Financial Secretary has left the Chamber, I wonder if he does so knowing that I would chide him. In fact, I will indeed chide him, but his departure is of no significance. What I want to say now had already been said nine or eight years ago. The Financial Secretary's annual Budget over the past nine years is basically the same, with no new ideas. Our speeches are likewise devoid of any new ideas, and what I want to say now had already been said nine or eight years ago. We in the will continue to voice our opposition. We are not asking for new ideas in the Budget, but the Budget simply fails to resolve problems in Hong Kong.

Over the past nine years we have all along hoped that the Financial Secretary would not merely focus on talking glibly or giving out "potato chips", but conscientiously resolve existing social conflicts and problems in Hong Kong. However, he has not done so. Over the past nine years he has not made good use of our public revenue to address problems in Hong Kong. For this reason, the Labour Party will certainly oppose the Budget. We have been immensely disappointed and dissatisfied with the Financial Secretary's miserly and impractical budgets that give no regard to public grievances over the past nine years, including this year's Budget. I very much hope that I can have some expectations of the Financial Secretary, but he is now nowhere to be seen, and we do not know whether there will be any change to his future political capacity. Still, I am immensely disappointed with his failure to perform his duty as the Financial Secretary in the past nine years.

Since I have no new ideas to talk about today, let me perhaps tell a story. When we were children, we must have read a book entitled A Christmas Carol by Charles DICKENS. I am holding in my hand a cartoon version of SCROOGE, a Disneyland version, and I have further turned it into "Potato Chip SCROOGE". Members must all know who "Uncle Potato Chip" is, and I believe Members likewise know who "Potato Chip SCROOGE" is. Why do I tell the story of 7222 LEGISLATIVE COUNCIL ─ 13 April 2016

SCROOGE? The reason is that SCROOGE, the protagonist of the story, is a miser who cares about nothing but saving up money. On Christmas Eve he has a dream in which spirits come to visit him. The first of the spirits, the Ghost of Christmas Past, tells SCROOGE why his wife left him. His wife, a beautiful lady, left him because he only cared about money and neglected his family and wife.

The Ghost of Christmas Present then comes and takes SCROOGE to see a child. The child, who is kindhearted and exhibits childlike simplicity, is seriously ill. SCROOGE likes the child very much, but he ignores the child upon knowing his serious illness. The Ghost of Christmas Present asks SCROOGE whether he remembers saying that the current social problems are attributable to overpopulation. Speaking of the history of economics, Members may probably remember Thomas MALTHUS, the first economist to propose the principle of population. In his view, population must be reduced due to overpopulation, and population would be reduced if more people died. This is a very cruel remark, but economists at that time did believe that population was a problem. I do not know whether nowadays people should make such a cruel remark, ignoring the poor as well as the elderly who are seriously ill and have to be hospitalized. The second spirit reminds SCROOGE of his previous remark on overpopulation.

The third Ghost takes him to see two children named Ignorance and Want respectively. He seems to take pity on them, but the Ghost reminds him that he once said that more prisons and workhouses should be built in society.

After learning all that, SCROOGE wakes up and makes changes immediately. He no longer only cares about himself; instead he becomes an empathetic person.

We now hope that "Potato Chip SCROOGE" will become an empathetic person and a genuinely upright politician, and will not merely gives out "potato chips" year after year. Potato chips are comfort food, people feel good after having some chips, what will that help? Will having some potato chips do any good to society? Will the problems be resolved? No. As far as the Budget is concerned, I would like to say that "Potato Chip SCROOGE", that is, our Financial Secretary John TSANG, is really stingy. Despite having fiscal reserves amounting to over $800 billion and an accumulated surplus of over $600 billion of the Exchange Fund that is disposable, he refuses to put the money LEGISLATIVE COUNCIL ─ 13 April 2016 7223 to proper use, and is only willing to give out potato chips. All he has been doing are totally impractical, showing no regard to public grievances. To me, the Financial Secretary has committed a hideous crime for refusing to resolve social problems when he has money at his disposal. Having money and not knowing how to make optimal use of the money is also a crime.

Hong Kong is now facing numerous challenges. The first challenge yet to be addressed is population ageing, of which the most important implication is healthcare. The Financial Secretary may say that $200 billion has been reserved for healthcare in the future. But my point is, while it is good to spend $200 billion on building hospitals and providing healthcare facilities, the problem lies in software. Do Members know that the recurrent expenditure for the Hospital Authority this year will be reduced by some $10 million? Certainly, the accounts will ultimately show that while recurrent expenditure is reduced by some $10 million, an additional 3% funding will be allocated for other services that need to be enhanced. Is 3% sufficient? As medical practitioners have successfully striven for pay rise recently, the Government has to allocate an additional $200 million for their annual pay rise in the future. Despite the shortage of nurses, the Government is so mean that it exploits them in terms of one-off overtime subsidies, resulting in low morale among nurses.

President, the recurrent expenditure for healthcare is very important, but have our Financial Secretary and Secretary for Food and Health formulated a 10-year plan as requested by us in the Labour Party? I am talking about manpower and financial planning on the basis of population. Upon completion of manpower planning, the Government will certainly know that population ageing will give rise to increasing demand for hospital beds and the need to recruit more medical practitioners and nurses. However, the current-term Government has not formulated such a plan.

Regarding the waiting time for medical consultation nowadays, the waiting time for non-urgent cases can be two or three years. In three years' time, a healthy person may become ill, a minor ailment may develop into a serious illness, and a serious illness may lead to death. Some kaifongs told me that they have to wait two or three years for medical consultation. They are thus at a loss. Since they are not daughters of LEUNG Chun-ying, they cannot jump the queue or obtain special treatment. They can do nothing but wait two or three years. In addition, given the expensive medical fees, the poor have no choice but to give up medication. President, regarding healthcare, the Financial Secretary says that 7224 LEGISLATIVE COUNCIL ─ 13 April 2016

$200 billion will be earmarked for the provision of hardware, but will he formulate a 10-year plan?

Regarding universal retirement protection, I think the Government is basically giving a false account. It predicts that the financial situation 50 years later will be very critical, and hence universal retirement protection should not be implemented on financial grounds. If a pension is provided to all elderly persons, it will greatly help resolve social conflicts and improve their standard of living. With over $1 trillion, including fiscal reserves of over $800 billion and an accumulated surplus of over $600 billion, why is the Government still so miserly? Why does it hold the view that universal retirement protection is infeasible?

Another problem is residential care homes for the elderly, which has been pointed out over the past 10 years or so. President, the current situation remains the same in that the number of people died while waiting for admission is larger than the number of people admitted to residential care homes. The problem remains unresolved. If so many structural problems remain unresolved, and the Government does not face up to the challenges of population ageing, the establishment of a Task Force on Population Policy will be to no avail.

The second challenge is poverty. We have requested a review of the Comprehensive Social Security Assistance Scheme over the past 10 years or so, but no such review has been conducted since 1995. The allowance for basic and essential needs has not been adjusted. We have requested the provision of subsidies to residents of "sub-divided units" while waiting for public housing, so that they do not have to pay high rents during the waiting period. We have also requested the introduction of rent control. The Low-income Working Family Allowance is the only initiative that benefits the poor in the Budget this year, but people can only apply for the Higher Allowance if their monthly working hours reach 192 hours. Does the Government have to be so mean?

The third challenge is the difficulty for young people to move upward. The problem of students heavily in debt has been discussed for many years. Today, only some 4 000 students from associate degree programmes can articulate to degree programmes, while other students can only enrol in self-financing degree programmes. After completing the self-financing associate degree programmes and self-financing degree programmes, the students LEGISLATIVE COUNCIL ─ 13 April 2016 7225 will be heavily in debt. With a monthly salary of some $10,000, how can they possibly repay the debt? They can only rely on their families, but not every family is wealthy. What should the poor do then? Young people simply cannot move upward. While wealthy people can send their children to study overseas, the poor can only manage to scrape along. The parents may spend all their savings on children, but sadly, their children may not end up finding a good job. All such problems remain unresolved.

I would like to further talk about the problem with civil servants. The Secretary is also present. On many occasions, I have talked about the "0-1-1" programme that aims to reduce financial resources by 1% for all government departments each year, and reduce by a total of 2% over the next three years. Certainly, following the reduction of expenditure, the departments can apply for funds to introduce new services. But who will be responsible for providing the existing services? The existing services are still provided by civil servants, and their workload will thus increase. While the Government refuses to commit more financial resources, it requires civil servants to provide more services, is that fair? With huge fiscal reserves, the Government still launches the "0-1-1" programme. What kind of Financial Secretary is he? Governments across the globe only roll out austerity measures in times of budget deficits, but Hong Kong has surprisingly adopted an austerity measure when it is in such a financial position.

Finally, I would like to talk about revenues. The Panama Papers reveal how wealthy people avoid taxes. It turns out that Hong Kong has the largest number of offshore accounts. The opening of such accounts is for tax evasion purpose. Well, they are not evading Hong Kong taxes, for only a few types of taxes are levied in Hong Kong. The problem is that Hong Kong merely collects salaries tax from wage earners while the wealthiest persons need not pay tax. During the era of British rule, the Government once thought of levying dividend tax, but up till now, it still has not decided to do so. Is it fair that the LI Ka-shing family, with dividend incomes amounting to some $7 billion or $10 billion, needs not pay any tax? The Financial Secretary has taken no action. This is understandable given that he is a friend of the wealthy. Even if resources are needed in many areas in society, he is still unwilling to levy taxes on the wealthy. The biggest problem with the Financial Secretary is that he merely takes care of the wealthy while giving no regard to public grievances.

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Lastly, let me give some advice to the Financial Secretary. He is an outstanding civil servant. However, an outstanding civil servant is one who is prudent and unwilling to take on challenges to avoid making mistakes; an outstanding civil servant sticks to old ways and merely concerns about stability; an outstanding civil servant may probably be good at talking glibly. He has flattered Hong Kong people by cheering for the Hong Kong football team, demonstrating his love for Hong Kong, and saying that the Mong Kok incident needs to be reviewed. With LEUNG Chun-ying doing so badly, the Financial Secretary has really pleased us by his sweet talk. However, what we want is not a glib civil servant. If the Financial Secretary wants to further move up his career ladder, he should manifest his competence as an upright politician. I will truly appreciate the Financial Secretary if he is able to resolve social problems in Hong Kong through his courage and insight. Thank you, President.

IR DR LO WAI-KWOK (in Cantonese): President, the Budget this year proposes initiatives on economic and livelihood issues in line with the Policy Address; it has followed good advice and the public responded positively. The Financial Secretary has also responded positively to some proposals put forward by me and my colleagues from the Business and Professionals Alliance for Hong Kong (BPA), and has proposed a series of relief measures. The "candies" he gives out amount to $38.8 billion, benefiting small and medium enterprises (SMEs), the middle class and the grassroots, thereby winning the general applause of the community. In addition to giving out "candies", the Budget raises a more important point. To meet the challenges arising from the new global economic order, Hong Kong urgently needs to invest in the future and look for new growth points in order to enhance our overall competitiveness. The Financial Secretary has gone into much detail about that.

The Policy Address strongly promotes the innovation and technology industry, and the Budget proposes the allocation of a total amount of $18.3 billion in this connection, which includes establishing a $2 billion Innovation and Technology Venture Fund for co-investing with private venture capital funds on a matching basis in local innovation and technology start-ups; earmarking $2 billion for University Grants Committee-funded institutions to carry out mid-stream applied research projects; earmarking $500 million to set up an Innovation and Technology Fund for Better Living to finance projects that make use of innovation and technology to improve our daily life; using $500 million to launch the Pilot Technology Voucher Scheme to provide each qualifying SME with up to $200,000 for using technological services to improve productivity and LEGISLATIVE COUNCIL ─ 13 April 2016 7227 upgrade or transform business processes; setting aside $500 million to increase the number of Wi-Fi.HK hotspots to more than 30 000. The Cyberport will allocate $200 million to launch a Cyberport Macro Fund for investment in its information and communication technology start-ups. It is estimated that the authorities will spend $4.4 billion on the phased expansion of the Science Park. They are now studying the promotion of smart production, research and development (R&D) in the Tseung Kwan O Industrial Estate. The project costs will be $8.2 billion.

President, I declare that I am a director of the Hong Kong Science and Technology Parks Corporation but no pecuniary interest is involved.

Although the said initiatives are rather encouraging to the technology industry, there are obvious gaps between the development process of Hong Kong's innovation and technology industries and that of some Asian economies. Singapore and Korea, for example, are amongst the region's science and technology hubs with intensive R&D. Apart from continued government financial commitment, there are at least two other contributing factors. First, strategies and roadmaps are set in the process of formulating the medium- and long-term development plans. For example, back in 1991, Singapore already formulated the first five-year science and technology plan. According to the latest Research, Innovation Enterprise 2020 Plan published this year, there is a S$19 billion (about HK$107 billion) commitment to support Singapore's R&D efforts over the next five years, focusing on four primary technology domains. In Korea, the third Basic Plan for Science and Technology sets out the R&D strategies from 2013 to 2017, involving US$79 billion (about HK$612 billion). The objectives are explicit, that is, to increase the contribution of R&D activities to economic growth from 35% to 40%, and create 640 000 science and engineering posts. Furthermore, Singapore and Korea encourage R&D by enterprises through various tax concessions and subsidies. Hong Kong should learn from these experiences.

In fact, I have repeatedly urged the SAR Government to formulate expeditiously long-term innovation and technology development strategy. I have also asked the Government to adopt more flexible policy initiatives to enable local enterprises to get triple tax rebate on scientific research expenditure, so as to encourage industry players to increase scientific research investment. In the past, the officials concerned routinely used the low and simple tax regime of Hong Kong as a shield. But it is stated in the Policy Address this year that, to attract foreign enterprises to establish corporate treasury centres in Hong Kong, 7228 LEGISLATIVE COUNCIL ─ 13 April 2016 the Government proposes interest deductions under profits tax for corporate treasury centres. Thus, it is not impossible to provide tax rebate on scientific research. I hope the SAR Government would not be fettered by old conventions and that it would propose as soon as possible an overall industrial policy and support arrangements in respect of resources.

The SAR Government must actively seek new opportunities arising from participation in regional development. The country's 13th Five-year Plan was announced in mid-March. It places emphasis on deepening co-operation between the Mainland, Hong Kong and Macao, and supporting the participation of Hong Kong and Macao under the Belt and Road Initiative. On 28 October last year, this Council passed Mr Martin LIAO's motion and the related amendments, and the subject of the motion is "Seizing the opportunities brought about by 'One Belt One Road' and seeking new directions for Hong Kong's economy". The motion was passed under the separate voting system, indicating the recognition and support of various sectors.

In my view, Hong Kong should make effort to perform its role as a "super-connector". Since Belt and Road countries have strong demands for infrastructure and professional services, Hong Kong should establish a professional and infrastructure services platform to promote professional services co-operation between Hong Kong and the Mainland, as well as facilitate the joint bidding of overseas projects by enterprises in the two places. The joint involvement in regional science and technology R&D will seek a new pathway for various professionals and large, medium and small enterprises in Hong Kong.

As for specific initiatives, it is announced in the Policy Address this year that the Government will set up a steering committee for the Belt and Road led by the Chief Executive. A Belt and Road Office will also be established to co-ordinate work. The Financial Secretary has also asked the Hong Kong Monetary Authority to establish the Infrastructure Financing Facilitation Office to provide a platform for comprehensive infrastructure financing services.

I think the Government should invite experienced professionals from the industries concerned, including senior engineers familiar with the operation and supervision of infrastructure projects, to be members of the consultative committee at various levels of the said structure, so as to draw on collective wisdom.

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Moreover, the Government will provide $200 million funding to support exchanges and co-operation between professional bodies in Hong Kong and Belt and Road countries and other places overseas. The authorities should take the opportunity to encourage direct contact among business and professional bodies in pursuit of co-operation opportunities.

In addition, the authorities announced that the Government would inject $1 billion into the scholarship fund to attract more students from the Belt and Road countries to study in Hong Kong. My colleagues from the BPA and I suggested that the authorities should also subsidize Hong Kong students going to Belt and Road countries for studies, training and exchanges, so as to broaden their international perspective. In reply to my question, the Secretary for Education said that the authorities have recently introduced a scheme to subsidize post-secondary students' exchanges in Belt and Road countries. The maximum amount of subsidy for each eligible student is about $50,000. I believe that the above programmes should be reviewed from time to time in order to meet social needs.

In respect of people's livelihood, despite government efforts to identify land for housing construction, the supply and demand of housing in Hong Kong is seriously unbalanced. I once suggested that the authorities should rezone a certain percentage (say 3%) of Green Belt land for the construction of residential units. I am pleased to see that the Government has now identified about 150 sites with potential for housing development, of which about 70 sites are Green Belt sites, accounting for about 1% of all Green Belt sites in Hong Kong. It is expected that more than 80 000 residential units can be provided. So far, 19 Green Belt sites have been rezoned for residential use by the Town planning Board, indicating that this is one of the practicable planning directions. As I have repeatedly stressed, in addition to resolving the housing supply, the authorities should timely review and restructure the housing ladder; for example, the authorities should provide targeted initiatives to subsidize home ownership, taking into account the home ownership demands of different classes, including the middle class and young families.

With regard to the transportation infrastructure, the Railway Development Strategy 2014 provides a framework for planning and recommends that seven new railway projects be implemented in or before 2026. The Secretary for Transport and Housing also said that detailed planning work would be implemented for the related Northern Link, Kwu Tung Station, and East Kowloon Line. I think the implementation of the relevant 7230 LEGISLATIVE COUNCIL ─ 13 April 2016 planning and preliminary work should brook no delay; otherwise, with the completion of the railways currently being constructed at full speed in the next few years, if new projects are not implemented, it will be difficult for our railway infrastructure to develop in an orderly manner.

President, although the Secretary for Development has recently mentioned at a special meeting of the Finance Committee that the annual public works spending would exceed $70 billion in the next few years, the recent filibuster war in the Legislative Council have seriously affected the approval of projects. For example, in the current year, the Government has originally given notice to the Legislative Council that it would submit funding applications of up to $67.5 billion for 72 public works projects, but apart from the Supplementary Appropriation for the Hong Kong-Zhuhai-Macao Bridge and the Hong Kong Section of the Express Rail Link, the Finance Committee has only approved funding of about $200 million, as well as the block allocation of $12.8 billion under the Capital Works Reserve Fund. The industry is thus really worried.

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

The continuous filibuster war has resulted in a drastic reduction in public works projects. The Construction Industry Alliance comprising more than 10 organizations such as industry associations, professional societies and trade unions have launched, since last year, anti-filibuster assemblies and processions. Another anti-filibuster procession, scheduled to be held last Sunday, was postponed due to bad weather. According to industry players, the activation of new public works projects has been seriously affected, leading to insufficient work for consultants, surveyors and architects on the upstream of the engineering chain; the continuation of the filibuster war would spread the unemployment tide to the downstream position of the engineering chain. The industry is worried that the unemployment rate in the construction industry may rise to 19% as recorded before and after the SARS outbreak in 2003, and the livelihood of nearly 400 000 practitioners and around 1 million family members will be affected. Students taking the relevant programmes will be hesitant about joining the industry, and this will have extensive adverse effects on our economic development and people's livelihood.

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Deputy President, apart from political interference, the lack of comprehensive long-term infrastructure planning in Hong Kong in the past caused the engineering sector to suffer gravely. They are plagued by the plight of "dying of overwork at one time and of starvation at another". In October 2013, I moved a motion in the Legislative Council, urging the Government to formulate long-term infrastructure planning. The motion was passed without amendments, showing that a majority of Members supported the motion. I am pleased to see that last year, the Planning Department started to update the study on Hong Kong 2030+: Towards a Planning Vision and Strategy Transcending 2030. I hope that the authorities would embrace the planning concept of keeping abreast of the times, and be committed to building Hong Kong into a low-carbon smart city, and at the same time, trying to attract the public to participate in consultation activities to foster consensus and strive for the efficient completion of the study.

On the other hand, pinpointing a constant increase in construction costs in recent years, the Development Bureau will establish a multi-disciplinary office to strengthen cost control of public works projects. I think the Government should consider setting up an appropriate consultative framework to draw on more effectively the experiences and opinions of engineers and professionals concerned.

Deputy President, I am very concerned about the increase in professional grade civil servants. At present, government departments including the Planning Department, the Housing Department, the Civil Engineering and Development Department, the Drainage Services Department, the Water Supplies Department, the Electrical and Mechanical Services Department, the Transport Department, the Highways Department and the Environmental Protection Department employed a large number of engineering professionals. These civil servants have always played an important role in the promotion of public works projects. In recent years, they have to face increasing work pressure; in particular, they are required to respond quickly to a wide variety of demands inside and outside this Council. I have repeatedly reflected to the SAR Government that there are insufficient manpower resources for professional grade civil servants. The Financial Secretary announced that the civil service establishment is expected to expand by 2 223 posts in 2016-2017. In reply to my question, the authorities stated that, among the new civil service posts to be created in relevant departments, 156 posts are of engineering professional grades. I think the authorities should establish a regular review mechanism and reasonable 7232 LEGISLATIVE COUNCIL ─ 13 April 2016 promotion ladder to train and retain engineering professionals, so that there are policies, plans, talent and resources for implementing government policies.

Deputy President, on the whole, the Budget this year is positive and pragmatic, there are relief initiatives and strategies for long-term development. This Council should support the passage of the Appropriation Bill 2016 so that members of the public can live and work in peace and contentment and opportunities for upward mobility can be created for the younger generation.

Deputy President, I so submit.

PROF JOSEPH LEE (in Cantonese): Deputy President, in this year's Budget, there is seemingly an increase in funding provision on healthcare. For instance, the total estimated recurrent expenditure on healthcare has increased by $870 million as compared with the previous year. The Government has also pledged to set aside $200 billion on a "dedicated-funds-for-dedicated-use" basis for hospital development.

While we welcome these initiatives, it seems that the Government is only concerned about the provision of hardware ― regrettably, neither the Secretary nor public officials from the are in the Chamber now, but I think they should be able to hear my views. Hardware can be provided so long as there is money. But apart from hardware, software, that is, manpower, is required for service provision. Clearly, there is now an acute shortage of nursing staff. Although the total funding provision for this year has seemingly increased, according to the figures of the Hospital Authority (HA), funding provision this year has only increased by 0.1%, while the rate of increase was 3.3% last year. In other words, even though the amount of funding provision has increased, the level of increase has been reduced substantially. Apart from the allocated funds for the provision of hardware, the HA should also be provided with recurrent expenditure for staff recruitment. If less funding is available, can the HA recruit the necessary staff?

Let us consider the present situation of nursing manpower. The peak influenza season has just ended. Recently, the Government has also announced that the peak influenza season has seemingly come to an end. Yet there is obviously an acute shortage of nursing staff. During the peak influenza season, one nurse has to take care of 12 patients at least. This ratio is much higher than LEGISLATIVE COUNCIL ─ 13 April 2016 7233 or two times the international standard of 1:6. Should the Government recruit more nursing staff to resolve the problem? Of course, it takes time to make available additional staff through recruitment, but how can the problem be resolved if the Government just keeps reducing the HA's funding provision, instead of increasing the funds available for hospitals to recruit more staff?

Although the HA has all along maintained that the difference between 1:6 or 1:12 is of little significance, except on paper, and that an assessment model is used to calculate the manpower requirement on the basis of workload, it has never disclosed the actual figures. I can understand why because once the actual figures are released, it would be blatantly clear that additional manpower is needed. If additional manpower is to be provided accordingly, it would require resource allocation. In this year's Budget, the focus is seemingly on making available dedicated funds for the dedicated use of hardware provision, and I hope the Secretary can also make the same "dedicated-funds-for-dedicated-uses" arrangement for the purpose of manpower planning. Whether the dedicated funds of $200 billion can achieve the desired results would depend on the arrangements to be made by the Financial Secretary.

Next, I still want to talk about manpower. In fact, the shortage of nursing staff is also reflected by the questions raised by Members when examining this year's Estimates of Expenditure. The turnover rate of nurses with a length of service between one to five years is particularly high. The HA also admitted that there was shortage of nursing staff, and the attrition rate of junior nurses was particularly high. As a result, there were more than 700 vacancies. How can new staff be recruited to fill such vacancies? Of course, some people have suggested that the problem is caused by inadequate manpower planning and hence, the HA should ensure better long-term planning. The remark is no more than a platitude, and I have been saying the same thing for over 10 years. The crux is that financial provision is a must in manpower planning. Manpower training is only possible with the provision of sufficient funding. While the Government is free to introduce piecemeal remedies for the sake of retaining nurses planning to leave service, the Government must at least show us that it is willing to make long-term commitment because as far as manpower planning of allied health staff is concerned, resource allocation is vital to the making of better planning. It is a very important fact that the mere provision of hardware will never serve the purpose.

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Given the present shortage of nursing staff, should the HA retain the nurses planning to leave service? But the Government is reducing the funding provision to the HA. Do not forget that staff cost is part of the recurrent expenditure. With a reduced level of funding provision, how can the HA pay for the additional expenses? Under such circumstance, we are extremely concerned whether the HA is capable of retaining the staff.

For example, according to the current human resources policies of the HA, no salary increment will be awarded to nurses within the first two years of joining service. These nurses will not get any pay rise no matter how good they perform. Some young nurses may feel disappointed about not getting a pay rise even though they have performed well. Moreover, given the phenomenon of unequal pay for equal work among nursing staff, resulting in differences between their salaries and allowances or pay points arrangements, some young nurses would choose to leave service. As a result, the attrition rate of younger nurses with a length of service between one to five years is particularly high. It is indeed a pity because they have already become quite experienced and can play an important role in terms of succession planning. Where would these nurses go after leaving the HA? They would probably work in the private sector.

While it is true to say that the HA must ensure the prudent use of funds, the Financial Secretary must not reduce its funding provision unreasonably, as in this year's Budget. While total funding provision has seemingly increased, the rate of increase has been substantially reduced as compared with the previous year. As a result, the HA might have to use its reserves. In this connection, can the Government set aside certain funds on the basis of "dedicated funds for dedicated uses", so that the HA can put the money to ensure better manpower planning, including staff recruitment and retention?

Apart from the staffing of nurses generally, I would like to talk about the manpower situation of psychiatric nurses. Deputy President, as shown by the questions raised by Members when examining this year's Estimates of Expenditure, the manpower situation of psychiatric nurses is quite interesting. From 2011-2012 to 2015-2016, the number of psychiatric nurses has only increased by less than 300, or 298 to be exact, representing an increase of just about 12%. The numbers of psychiatric nurses in the Kowloon Central, New Territories West and Island West clusters, as well as the number of community nurses have dropped, but the number of psychiatric patients requiring medical LEGISLATIVE COUNCIL ─ 13 April 2016 7235 treatment has increased by about 17%. How can the standard of service be maintained if the number of nursing staff is decreasing while the number of patients is increasing? The situation is worrying indeed. Hence, I must stress the importance for the Government to allocate the necessary provisions to the HA so that it will not only have funds to make overall planning for software, but also an adequate recurrent expenditure for staff recruitment to address the present problem of manpower shortage. It is what we expect from the Budget, rather than the proposed additional funding of $200 billion, or the increase of $870 million in the total estimated recurrent expenditure on healthcare as compared with the previous year.

I would now turn to allied health professionals. At present, there are more than 20 allied health professions in Hong Kong, with only five to six of them subject to statutory regulation. Others including dietitians, audiologists, clinical psychologists, educational psychologists, speech therapists, podiatrists, dispensers, prosthetists, dental hygienists, and so on, are not subject to statutory regulation. For more than a decade in the past, we and other professions have been advocating our case with the Government. The good news is that our discussion with the Government is drawing to a conclusion, and the Policy Address has also pledged to try regulating the relevant professions through administrative measures. However, no funding provision has been made by the Financial Secretary correspondingly in this year's Budget. Let us not forget, any administrative regulatory arrangements would involve the use of resources. For instance, we propose that a central register be kept by the Department of Health (DH) so that members of the public can rest assured when using the services of allied health professionals who are subject to regulation as their qualifications have been accredited by the Government.

Separately, for example, should legal actions arise from any complaints, it would involve engaging legal services or convening open hearings, which incur financial resources. Yet we cannot find any resource provisions made in this year's Budget. Our concern is that notwithstanding the relevant proposal in the Policy Address, how can the initiative be implemented without resource provisions? To put it bluntly, is the DH expected to meet the relevant expenditure from its own budget? If so, the arrangement is absolutely unsatisfactory. I hope the Financial Secretary will consider making the necessary provisions so that the regulation of allied health professions can be implemented.

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Notwithstanding the many criticisms I made against this year's Budget a moment ago, I would like to show appreciation for one point, namely, the funding provision for the DH. In the past few years, I have always criticized the Government for being biased in the sense that the HA always receives a large amount of funds to provide medical services for its patients. Of course, I understand that the HA is a major service provider, but the DH is also responsible for looking after the well-being of the 5 million to 6 million healthy citizens in Hong Kong, and its funding allocation is always on the small side. Nonetheless, the DH's situation has improved this year as the Government is finally willing to increase its funding allocation by about 18.1%. But it might not be a cause for celebration for the DH. Why do I say so? It is because the Government will not increase its funding allocation by 18.1% for no good reason as the DH is charged with a number of new initiatives in the future, including the launching of a pilot colorectal cancer screening programme, the review of the regulation of private healthcare institutions, as well as certain initiatives in relation to Chinese medicines. Actually, the DH will be responsible for many new initiatives, and I do not know if its funding allocation would be sufficient for the purpose. I hope that after this budget debate, the Administration will suitably increase funding allocation to the DH.

Regardless of whether the DH has an increase in its recurrent funding, there is actually still a large room for improvement in its work, which necessitates the use of financial resources. For example, according to the statistics provided by the Administration, for elders living in districts like Sai Ying Pun, Wan Chai, Yau Ma Tei and Kowloon City, if they want to use the services provided by elderly centres, say, checking blood pressure, attending health talks, and so on, they would have to wait 30 months on average, which is quite unthinkable. I hope the situation can be improved with the additional funding; and if it is still not enough, I hope the Financial Secretary can further increase the funding allocation for the DH next year, so as to reduce the waiting time.

Regarding the proposed pilot colorectal cancer screening programme, we certainly welcome the initiative and hope that it can be launched as scheduled because as I understand, there might be some problems in tendering. In any case, we hope the programme can be implemented smoothly and we welcome the Administration's move to make available the necessary funding.

Concerning primary health protection, I understand that apart from the screening of colorectal cancer, the Administration also intends to inject public funds into the Community Care Fund (CCF) to implement a pilot scheme for LEGISLATIVE COUNCIL ─ 13 April 2016 7237 cervical cancer vaccination. While we certainly welcome the initiative, we find it strange that the proposed scheme will be funded by the CCF, considering that the Government also sees the need to provide cervical cancer vaccination for women within certain age groups. In other words, does it mean that women with the means should pay for the vaccination themselves? What is the logic? Why can't the Government provide enough funds to implement a single cervical cancer vaccination programme for all young women in Hong Kong within the relevant age groups? This will simplify matters to a large extent. Of course, this suggestion will incur additional funding injection, but it is strange for the Government to implement a half-baked scheme as such.

Apart from cervical cancer, women in Hong Kong are also prone to breast cancer. For men, apart from colorectal cancer, they are also at risk for developing prostate cancer and hence, early screening is very important. Since the Government has already allocated resources to the DH to implement certain initiatives, I hope it will consider further increasing the funding allocation to the DH in future to implement screening programmes for breast cancer and prostate cancer, so as to provide greater health assurance to Hong Kong people.

Deputy President, pardon me for mentioning nothing but diseases just now, but I must do so because this is the area of my professional expertise. In terms of health protection, this year's Policy Address has undertaken to provide additional resources to the DH to set up an additional Child Assessment Centre. We certainly welcome the proposal. Moreover, according to the Government, the Budget has already set aside about $470 million to implement the Pilot Scheme on On-site Pre-school Rehabilitation Services within a span of two years. While we welcome the proposal, we also have concerns about it. Although the Administration has allocated a substantial amount of resources to implement the pilot scheme, its success would depend on the availability of the relevant professionals. Again, this is a question of software. Can the DH recruit enough clinical psychologists, physiotherapists, occupational therapists, audiologists or speech therapists to provide the relevant services?

According to the data provided by the Government, the number of undergraduate places for these professions will not be increased in the next few years. Given the substantial funding provision made by the Government to implement the pilot scheme, shouldn't it also increase the provision of undergraduate places for these professions accordingly, so as to avoid the situation where there are job vacancies left unfilled? The crux is that these 7238 LEGISLATIVE COUNCIL ─ 13 April 2016 professionals cannot be trained overnight. They must receive training for three to four years before they can provide the said services. Under the circumstance, the Government should give overall consideration to allocate additional resources to the public healthcare system for training purposes on a "dedicated-funds-for-dedicated-uses" basis to ensure an adequate supply of talent to provide the necessary public healthcare services in future.

Although the Budget has increased the allocation of resources on public healthcare, we cannot help but note that the focus is only placed on the provision of hardware. Although the Financial Secretary is not in the Chamber now, I hope he can hear the comments I made so far and provide dedicated funds for dedicated uses to ensure an adequate supply of manpower and avoid staff shortages. As such, services can be provided to the public as planned upon completion of the hardware facilities.

Next, I would like to talk about elderly services. Although many criticisms have been made in this respect, the Government did pledge to increase the funding provision on the supply of residential care places for the elderly by $170 million. But as shown by the relevant information, the average waiting time for places in care and attention homes for the elderly is 36 months, while the average waiting time for places in nursing homes is 26 months. Despite the additional allocation of resources, the number of subsidized residential care places for the elderly will only increase by 693. Is this an adequate level of increase? I think the question should best be answered by the Financial Secretary himself.

Nonetheless, my point is that even though the number of residential care places for the elderly has increased, the Government has all along failed to ensure proper monitoring of the service standard. Why do I say so?

Although the Government has increased funding allocation this year and commissioned the Elderly Commission to study the feasibility of a Scheme on Residential Care Service Voucher for the Elderly, which is expected to provide elders with a greater choice between private and subsidized residential care homes (RCH) upon implementation, the relevant statistics show that most elders still prefer to wait for subsidized RCHs. On the other hand, the waiting time of private RCHs is only seven months. Why is that so? It is because people used to have the impression that the standard of services in private RCHs varies. Hence, it is not the preferred choice of elders, resulting in a relatively short LEGISLATIVE COUNCIL ─ 13 April 2016 7239 waiting time. Thus a shorter waiting time is not necessarily a good thing because it may also indicate the lack of interest on the part of elders for private residential care places or some other concerns.

In my view, the Government should allocate more resources in this regard so as to ensure proper monitoring of the service standard, rather than merely concentrating on the numbers. For instance, as the relevant legislation has become outdated, should an amendment exercise be conducted by the Administration? As a matter of fact, some requirements have become very outdated, such as the requirement that there must be one nurse for every 60 elderly residents, or two health workers for every 60 residents if there is no nurse. If these outdated practices can be revised, it will help improve the effectiveness of the entire regulatory regime. In Hong Kong, about half of the elders are living in private RCHs, and the other half in subsidized RCHs. If the Administration can allocate more resources to ensure better monitoring and achieve a balance between the standard of these two types of RCHs, the elders would have a genuine choice between private and subsidized RCHs. Otherwise, most elders would still prefer subsidized RCHs because of their better service standard, and the problem will never be resolved.

Finally, I would like to say a few words about the hearing problems of the elderly. Many Members have spoken about the demand of elders for dental services, but when the elders reach the age of 65, they might start to develop hearing problems. According to the present allocation of resources in the public healthcare system, after their first visit to the ear, nose and throat department, elders must wait two years before obtaining services such as undergoing hearing tests and tuning of hearing aids. The situation is highly unsatisfactory. I hope the Government can consider allocating additional resources in this regard so that elders with hearing problems can receive the necessary treatment in public hospitals.

Thank you, Deputy President.

MR NG LEUNG-SING (in Cantonese): Deputy President, if we make assessment based on facts, this year's Budget is pragmatic and delightful. Why would I say so? It should be noted that with the support of a hefty fiscal reserve, the SAR Government has adopted a proactive approach and increased recurrent expenditure by 6.7% to $347.5 billion, whereas the total government expenditure 7240 LEGISLATIVE COUNCIL ─ 13 April 2016 has also increased by 14% to $486.9 billion. The level of public expenditure, which accounts for 21.2% of GDP, is not only a record high in recent years, but has also broken through the longstanding bottleneck.

We must note that under the Linked Exchange Rate Mechanism, Hong Kong does not have an independent monetary policy and has to rely on another tool for economic adjustments, which is fiscal policy. In view of the lack of economic impetus and the high degree of uncertainties in the external environment, the financial and monetary authorities of different countries have been acting cautiously and prudently and most of them have introduced stimulus measures. Therefore, it is reasonable for the Government to put forward more proactive fiscal measures in the Budget. And yet, in respect of the allocation of expenditures, consideration should be made to strike a balance between short-term and long-term measures. In order to remain financially healthy in the long run, the Government must pay attention to fiscal discipline, with a view to achieving a fiscal balance.

One of the key points about this Budget is, by focusing on the diversification of the economy and promoting new engine of growth, a number of expenditure measures and programmes have been put forward to promote the development of the innovation and technology industry and the creative industries, as well as help local industries open up new markets along the Belt and Road. These proposals are proactive and forward-looking, and are worth supporting. However, given that Hong Kong is a late starter in the innovation and technology industry, we are still lagging behind other developed cities. Thus, the proposed injection may be inadequate and must be further increased where appropriate. In 2014, our gross expenditure on research and development (R&D) as a percentage of GDP stood at a low of 0.74%, which is much lower than 4.29% of Korea. From this, we can see that the Government must formulate medium to long-term plans to gradually increase the R&D expenditure to a reasonable level.

As pointed out in the Budget, "For Hong Kong to stay competitive, we need to have a pool of talents familiar with innovation and technology and equipped with professional skills." While I support such a view, concrete measures must also be put in place to attract brilliant young people to undertake technology courses. As remarked by the President and Vice-Chancellor of the Hong Kong Baptist University Ronald CHIN (I quote): "Every year, there are only 15 000 graduates from the eight tertiary institutions, and most of them have LEGISLATIVE COUNCIL ─ 13 April 2016 7241 chosen to be doctors and lawyers, or join the financial sector. Not many graduates actually work in the innovation and technology field. Thus, if any major enterprise plans to develop R&D in Hong Kong, there is no way it can recruit sufficient staff." (End of quote) In fact, the research intensity of Hong Kong is only 6.15 per 1 000 labour force, which is a pretty low level. The situation really deserves attention from the Government and must be reversed.

Members of the financial sector welcome the proposals put forward in this Budget of the Government, which seek to further enhance the initiatives and undertakings relating to Hong Kong's renminbi and asset management businesses as well as bond market. I also absolutely support the above-mentioned initiatives and undertakings to consolidate Hong Kong's position as an international financial centre. I must stress that it is of paramount importance for the Government to take forward those measures. According to the recently published Global Financial Centres Index, Hong Kong's ranking was overtaken by Singapore. To face this reality, we must be vigilant, seriously deal with the issue and work hard.

Furthermore, members of the financial sector also welcome the concrete measures proposed in the Budget, which include taking part in projects like the Belt and Road Initiative and the Asian Infrastructure Investment Bank (AIIB), with a view to making good use of Hong Kong's advantages and facilitating the development of local financial businesses. According to the Budget, the Financial Secretary has asked the Hong Kong Monetary Authority to establish an office to facilitate the financing of infrastructural projects and provide a platform for pooling the efforts of investors, banks and the financial sector to offer comprehensive financial services for various infrastructural projects. On the other hand, the Hong Kong Association of Banks has also established a committee of Belt and Road and is looking forward to conducting more exchanges with the above-mentioned Office. The financial sector commends the Administration's continuous support and endeavours to establish the AIIB, as well as its efforts in seeking to make use of the sector's professional knowledge and skills to provide services for the future AIIB in respect of access to capital market and asset management.

Members of the financial sector also commend the Government's effort in consolidating Hong Kong's position as the premier asset management hub in the Asia-Pacific region, which include the provision of a legal framework to attract 7242 LEGISLATIVE COUNCIL ─ 13 April 2016 multinational and Mainland enterprises to establish corporate treasury centres in Hong Kong, and the introduction of an open-ended fund company structure. What is more, the financial sector also acknowledges the contribution made by the Government in the development of financial technologies (Fintech), which includes creating policies and environment conducive to the development of the relevant industries. The financial sector also supports the development of the aircraft leasing business and the policy initiatives related to its financing. Thus, it looks forward to seeing concrete follow-up proposals prepared by the Government for co-ordination and development.

The financial sector noticed that in 2014, British Chancellor of the Exchequer George OSBORNE suggested to build the United Kingdom into a global capital of Fintech. The fact is, there are currently 61 000 people engaging in the Fintech industry in the United Kingdom, which has surpassed New York. But what more eye-catching is the income generated by the industry in 2015, which was as high as £6.6 billion. Hong Kong definitely will not lag behind, thus a report has been submitted by the Steering Group on Financial Technologies and, as pledged in this year's Budget, the Government will actively follow up. While I look forward to seeing concrete follow-up actions being taken, they must be consistent with the traditional banking industry. Also, consideration should be given to exercising timely and appropriate regulation. According to the report of the Steering Group, in view of the evolving landscape, the Government and regulatory authorities should balance between risk level and market development when examining the need to amend existing rules or introduce new rules, with a view to safeguarding the reputation of the financial centre. As for local legislation, it is believed that the specific communication channels established between the regulatory authorities and the start-ups may enable the latter to gain a better understanding of the former's expectation and direction.

In the report published by United Kingdom's Government Chief Scientific Adviser Mark WALPORT in mid-January this year, it is stressed that regulation should evolve in parallel with technological advancement and a balance between the interests of consumers and the promotion of innovation should be struck. This view happens to coincide with that of the Steering Group, both stressing the importance for the regulation to keep abreast of the times. I hope that the Administration will enhance communication with the industry so as to raise the transparency of various policies.

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This year's Policy Address reiterated that "Housing is still the most important livelihood issue we have to address", indicating from different perspectives and angles that the authorities have a comprehensive grasp of the overall situation and a number of initiatives and measures have been put forward accordingly. As a matter of fact, optimizing the use of Hong Kong's precious land resources is one of the cornerstones for effective governance and social stability. At present, about 70% of land in Hong Kong belongs to greening areas, of which 50% are country parks and residential sites accounts for only 6.9%. In comparison, the proportion of greening areas in the world renowned "Garden City", Singapore, is only 50%, 20% lower than that of Hong Kong. There is no doubt that protection of the natural environment and conservation of the ecology are worth supporting, but we should not go too far. According to the analysis of academics, the fact that prices of land and properties in Hong Kong are the highest in the world can be largely explained by the above factor. Therefore, we must explore land of lower conservation value for development purpose, with a view to increasing the supply of local residential sites by folds. This will not only resolve the problem of shortage of land and bring benefits to many people, but can also respond to the society's urgent housing needs and ensure the sustainable development of the economy and people's livelihood.

The Budget also proposes to give impetus to the economy by boosting local consumption. In this connection, it should be noted that Hong Kong is an open and small economy, it is therefore inappropriate to rely too much on a self-contained growth pattern. Instead, we should strive to enhance Hong Kong's external competitiveness. While efforts should be made to compete in the international market, we should also establish a mutually beneficial relationship with the Mainland and overseas market because only in so doing can we maintain long-term and sustainable development. Of course, under the Linked Exchange Rate System, Hong Kong's currency is pretty stable and is absolutely favourable to business operations. Nonetheless, amid strong US dollar, it would be impossible for Hong Kong to adjust its economy through monetary policies. It can only maintain competitiveness by making adjustments to the real economy, which includes a reduction in property prices. Sometimes, this is a painful process, as in the case of Hong Kong between 1997 and 2003. Another example is, Hong Kong was having pretty hard times in 2015 when the exports of goods recorded the first annual decline since 2009, and the exports of services also dropped. This showed that the competitiveness of Hong Kong has been weakened. I therefore suggested the Administration, the relevant academics and research bodies to conduct more analysis for members of the 7244 LEGISLATIVE COUNCIL ─ 13 April 2016 public so that they can fully appreciate and understand that it is the objective economic cycle that causes certain short-term phenomenon, which is a normal economic operation. And, the only solution is to enhance the overall competitiveness of Hong Kong.

I so submit.

MR LEUNG YIU-CHUNG (in Cantonese): Deputy President, this is the ninth Budget of the Financial Secretary after he took office. Although he hands out $38.8 billion of "candies", he no longer waives the rents of public rental housing and also cuts back on the Comprehensive Social Security Assistance (CSSA) payments and "fruit grant", and only one extra month of CSSA payment is provided. On the other hand, the Financial Secretary waives rates for four quarters. No wonder many criticize him for favouring the business sector while neglecting the general public, as well as being mean to the grassroots.

When the Financial Secretary attended a radio programme, he was bitterly criticized by the listeners as a miser. Many query that the Budget shows the greatest concern for the business sector and the middle class. The measure of waiving rates for four quarters is to return wealth to the wealthy. To the wealthy, the amount of money waived is merely a drop in the ocean. People wonder if this year's Budget is prepared with the well-being of Hong Kong people in mind.

Apart from that, many also say that the Financial Secretary acts like the Chief Executive in the sense that he drafted the Budget in a hypocritical manner. By means of accounting tactics, he has injected the surpluses into various funds, such as injecting $27 billion into the Housing Reserve. Yet, he has not allocated any resources to satisfy the most urgent needs of the grassroots. We in the Neighbourhood Workers Service Centre even consider the Budget detached from reality as far as the grassroots are concerned. In a survey conducted on the Budget, only 36% of the respondents were satisfied with the Budget, a year-on-year decrease of 9%; on the other hand, over 20% of the respondents were dissatisfied, an increase of 2%. The survey also found that young people between 18 and 29 years of age were most dissatisfied with the Budget, and their satisfactory rate was only 13%.

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Deputy President, before Hong Kong's reunification with China, the Financial Secretaries would very often talk about the ideal concept of fiscal management, and they would analyse the impact of public finance strategy on the economic development of Hong Kong. After 1997, however, the political ecology has changed. In particular, after LEUNG Chun-ying became the Chief Executive, he has become the power centre of the Government. Under the executive-led approach, all major development plans are the ideas of the Chief Executive, and the Financial Secretary merely provides financial support to materialize the governance philosophy of the Chief Executive. To a certain extent, the Financial Secretary is the Chief Executive's treasurer, there is little room for him to exercise his autonomy and give play to his talent. After LEUNG Chun-ying took office, he has combined the consultation exercises for the policy address and the budget, reflecting that the Financial Secretary only plays a supporting role.

Owing to this structural problem, the budgets after LEUNG Chun-ying's assumption of duty have somewhat become an accounting journal, giving out "candies" and distributing resources among various Policy Bureaux. There are slight changes in the Budget this year, such as the proposed injection of $20 million to subsidize the expenses incurred by locally-produced Cantonese films for distribution and publicity conducted in the Mainland, giving people the impression that the Financial Secretary supports the local film industry. However, generally speaking, resources are allocated within the framework of the Policy Address. For example, on the promotion of innovation industries, $2 billion will be injected to launch a Midstream Research Programme for Universities; $8.2 billion will be spent by the Hong Kong Science and Technology Parks Corporation to promote smart production and research; $2 billion will be injected into the Innovation and Technology Fund, and the development of financial technologies will be promoted. All these initiatives have been mentioned in LEUNG Chun-ying's Policy Address this year. As regards the Belt and Road Initiative and development of land resources, they are all within the scope of the Policy Address. Hence, the items of government expenditure put forward in the Budget are all within the boundaries imposed.

We have to understand that after various funds have been set up, there will be a shortage of resources and funds will be frozen. Without the injection of funds into the market, the market will become sluggish. How can one not be worried about the future economic development of Hong Kong?

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As a matter of fact, the Financial Secretary has failed, as always, to put forward effective measures to stimulate economic growth. In the face of the Mainland and global economic slowdown, this is particularly worrisome. The Financial Secretary has frankly admitted that in the midst of uncertainties in the external economy, Hong Kong has to rely more heavily on domestic demand. He has also said that the relief measures and tax adjustments in recent years have helped boost the GDP by 1%. However, when the Financial Secretary met with the media after the delivery of the Budget, his remarks and attitude have made people more pessimistic about Hong Kong's economic growth. He forecast GDP growth this year at 1% to 2%. Last year, after he delivered the Budget, he said that GDP growth would slow down at 2% to 4%, which he believed to be a new norm. What is a new norm? He said the situation was undesirable. If the 2% to 4% growth is undesirable, does that mean the 1% or 2% growth this year is even more undesirable and worrisome? Deputy President, our concern is not that we only have a growth of 1% to 2%, but this target cannot be met. If so, does that mean we have a negative growth in GDP? Members of the public are even more worried.

Since the Financial Secretary has said that relief measures proposed in the Budget and tax adjustments will help boost GDP growth, why does the Government not make bigger adjustments? Since the Treasury is seriously "flooded by cash", with the actual annual surplus exceeding $70 billion and accumulated surplus close to $1,000 billion, many query why the Secretary does not open the safe, adopt more effective countercyclical measures and allocate more resources to various social services, so as to stimulate internal growth and counter the effect caused by the slowdown of external economy.

Deputy President, the Secretary has already presented nine Budgets and he talks about how to stimulate domestic demand almost every time. Regrettably, his budgets have candidly reflected to us that he says one thing but does another. He just uses very limited resources to stimulate domestic demand. For example, the "candies" he gives out are superficial and insignificant, giving people the impression that he is just acting perfunctorily. How can they not call him a miser? In fact, the public do not necessarily want "candies". The Financial Secretary might as well provide more social services, such as improving the elderly care services which the community most desperately needs. In so doing, not only can the elderly have a sense of security, but also stimulate the internal economy. This is tantamount to killing two birds with one stone; why not put it LEGISLATIVE COUNCIL ─ 13 April 2016 7247 into practice then? Being a small externally-oriented economy, Hong Kong is often influenced by the external economy. The only thing we can count on is to maintain our economic growth through stimulating domestic demand.

Deputy President, at an informal briefing for the media before the presentation of the Budget, the Financial Secretary criticized people for piggybacking on the spirit of localism to achieve their own political aims, thereby twisting the meaning of localism. He said that the spirit of localism should be positive and constructive, rather than passive, destructive and even moving towards protectionism. He also said that there were in fact a handful of passive and destructive people in society, but they could not change Hong Kong people's peace-loving spirit and their values. As regards whether this year's Budget has been amended as a result of the unrest in Mong Kok, he said that the allocation of resources had been finalized before the incident, but consideration as a whole could be made later to provide additional resources.

Deputy President, the Financial Secretary was only making an issue of the incident. He has not looked squarely at the social problems. Problems do not arise overnight. Social grievances have been harboured over a long time. As a principal official of the SAR Government, how can he evade the issue and pretend the incident just occurred abruptly? Young people are heavily in debt after finishing their tertiary education and they have to face problems such as repaying debts and taking care of their family. During these difficult times, they also have the pressures of marriage, home ownership and housing. What has the Financial Secretary done over the years? Has he taken any measures to help these young people? We have been fighting unsuccessful for years to waive the interests of student loans, how can he say sarcastically that the spirit of localism should be positive and constructive. Where are his positiveness and constructiveness?

Deputy President, this is the ninth Budget presented by the Financial Secretary since he assumed office. He had wrongly forecast the surplus in each of the past eight budgets. It is a shame that he has never taken himself to task; he always finds excuses to defend himself and has not faced up to his mistakes seriously. The surplus forecast in the Budget is closely related to people's livelihood. If the Budget makes a serious mistake in forecasting the Government's revenue and expenditure, resources will be wrongly allocated. Owing to wrong estimation over a long period of time, serious problems have 7248 LEGISLATIVE COUNCIL ─ 13 April 2016 arisen in the distribution of resources. The Financial Secretary cannot shirk his responsibility for the serious problem of wealth disparity in Hong Kong. Therefore, Deputy President, I will not support the Budget.

MS EMILY LAU (in Cantonese): Deputy President, the Financial Secretary presented his Budget on 24 February. Even though some Honourable colleagues are not very happy with the Budget, they would not go so far as to pound on the bench and launch into a tirade of abuse. I certainly understand the discontent expressed by Mr LEUNG Yiu-chung just now, and some members of the public do consider the Budget deficient. But, as I said at the briefing attended by the Financial Secretary earlier on, LEUNG Chun-ying or his clique had beaten Hong Kong people's expectations down to hell, so when the Financial Secretary made a few humane remarks, some people were overwhelmingly impressed and admired him as if he were a divine being.

Mr TAM Yiu-chung asked this question that day: LEUNG Chun-ying and the Financial Secretary actually belong to one team, so why does everyone chide LEUNG Chun-ying but commend the Financial Secretary? LEUNG Chun-ying should do some soul-searching; after all, it is his mouth that is on his face. Why did the Financial Secretary's remarks make a favourable impression on people? While Mr LEUNG Yiu-chung does not agree to the Budget and many members of the public may not think the Budget is good, they all have a higher opinion of the Financial Secretary than of LEUNG Chun-ying.

Deputy President, LEUNG Chun-ying's prolonged administration of Hong Kong has resulted in serious divisions in Hong Kong. Ms Starry LEE just now criticized young people for forming political parties these days, saying that they are advocating independence, autonomy, self-determination and violent protests. Most of these young people have resorted to such means because the Government has left them with no choice. I am referring to the SAR Government, and I will not call it our government. It is just the SAR Government, not our government. It is our government only if it is elected by us through "one person, one vote". Unlike some Members, I will not call the government officials "our officials", for they are definitely not "our officials". The Central Government and the SAR Government should try to understand why our society is so restless. Even the Financial Secretary says in the Budget that "tension and turbulence are mounting in Hong Kong". The Secretary for Security is now present; his Police have been caught in the crossfire. I have inquired of the Secretary on several occasions, and I do not want the Police to be caught in the crossfire either. Police officers LEGISLATIVE COUNCIL ─ 13 April 2016 7249 cannot assault members of the public, nor can members of the public assault police officers. Deputy President, we are definitely against violence and foul language. We definitely support the "peaceful, rational, non-violent and no-foul-language" approach.

However, the problem is that tension and turbulence are now mounting in society. Can this Budget presented by the Financial Secretary … This is not his last Budget. Just now some Members said that it was his last Budget. Why would it be his last Budget? This time next year I will not be here, but the Financial Secretary will probably present one more Budget before he steps down or "switches to another runway", as some people put it.

Over the years, the Democratic Party has demanded ― I believe it is also the demand of many members of the public ― that the Government should have a long-term commitment to providing the public with basic service facilities in the areas of housing, education, healthcare, elderly care, environmental protection, and so on. Yet the Financial Secretary always gives the impression of being an exponent of laissez-faire, an advocate of positive non-interventionism, and even a miser. The Government has huge reserves, but some members of the public … Deputy President, there are views that it is good that the Government allocates resources to other areas. I agree that this is good, but the Government can do better. At present, the conditions of some people are not that good.

The biggest problem at present is … In fact, the Democratic Party is not saying that Hong Kong should immediately follow the practice of welfare states in levying a heavy tax of 30% to 40% on everybody. It is not like that. And I do not believe that the public wants the Government to impose such an exorbitant tax in order to provide welfare benefits later. That said, even with the current tax revenue, the Government could have done a better job. The Government's failure to do a better job has led to a very serious problem … actually many problems. Among them, the most serious problem is the disparity between the rich and the poor, which was one of the important factors that triggered the Occupy movement. Deputy President, all those occupiers, regardless of age, pursued justice. Of course, many of them were young people, but there were also participants of other age groups. We have never seen democracy, and while we are enjoying freedom, it is fading away. We all want are justice and the rule of law. Therefore, if the disparity between the rich and the poor remains unresolved, we will be in great trouble.

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Now, according to government figures … Whenever the Government held the Commission on Poverty Summit or any other similar conference, I would surely attend to show my support. Deputy President, at present, as many as 900 000 plus or 1 million people are living below the poverty line set by the Government, and those of them who have jobs are classified as the working poor. The poverty line is currently set at half of the median monthly household income: for one-person households, the median monthly income is $7,500, half of which is $3,750; for four-person households, the median monthly income is $36,400, half of which is $18,200. In other words, workers whose monthly income is at or below that level are classified as the working poor.

Prof Paul YIP of the University of Hong Kong has done a great deal of research in this area, and the authorities have often approached him for help. Prof YIP has told me that working poverty stems from the Administration's outsourcing policy under which the lowest bidder often wins, giving rise to multi-layered exploitation. Deputy President, what types of jobs account for most of the Government's outsourced posts? According to current statistics, there are seemingly 60 000 such posts. It is good to see Secretary Clement CHEUNG here, because he knows best what his colleagues in the Civil Service are facing. There are 60 000 to 70 000 such posts, most of which belong to the Housing Department, the Food and Environmental Hygiene Department, and the Leisure and Cultural Services Department. Workers in such posts are required to do obnoxious and very toilsome work. They have low bargaining power, their academic qualification is low and they are not young. Very often, workers responsible for such duties as sweeping streets and cleaning toilets are seriously exploited. The Government has outsourced their posts.

I have recently raised a question about the costs and benefits of outsourcing public services, and the amounts of money involved, but the Government replied that it did not know. Prof YIP has also told me that the Government is just like that. Deputy President, do you know how much the Government spent on outsourcing last year? The figure for last year is $7.1 billion. The Government spent $7.18 billion on this area in 2013-2014. Secretary Clement CHEUNG, please correct me if I am wrong. What is the effectiveness of outsourcing? In its documents submitted to the Legislative Council, the Government is unable to explain the effectiveness of outsourcing, and does not mention how to safeguard the interests of outsourced workers. The Government should not adopt a "couldn't care less" attitude and think that once the jobs are outsourced, it can wash its hands of the whole business. The Government must not act in this way.

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So, in my opinion, the authorities should change this system. I agree that the best approach is to allow those workers to rejoin the civil service team of the Government, so that they will not have to suffer so much. Why is this good for the workers? It is because, according to some civil servants, the difference in wages between government posts and outsourced posts could be up to 30%. I believe Secretary Clement CHEUNG also knows that some junior civil servants have requested that the Government should not require them to retire at the age of 60, but should raise the retirement age to 65 or above. Why? It is because if they do similar jobs outside the Government after retirement, they will earn 30% less.

Deputy President, I think that public money must be spent carefully, and every member of the public should have a dignified income which enables him or her to lead a dignified life. The Financial Secretary has earlier remarked that the restaurants have operational problems in view that it has to pay a monthly salary as high as $18,000 for dishwashers. Why would restaurants have operational problems? It is not a problem as long as the employer is willing to pay the wage, be it $18,000 or $48,000. Hong Kong is a free, capitalist society where employees can earn any amount their employers can afford to pay. The Financial Secretary may try to do the job of a dishwasher. I believe he would not be willing to take up the work even if he was offered $100,000. Deputy President, I hope that the authorities will do more good deeds in this regard to enable those hard-working people to get their due rewards with dignity, without having to receive any low-income subsidies.

This aside, I would like to mention in passing something which you might regard as a compliment from me, or whatever. It is about the term "forward planning" used by the Financial Secretary in paragraph 158 of the Budget. It seems that I have never seen the Government use these words before. Deputy President, this is something that we have been talking about for years. Next year, I will not make such comments in this Chamber anymore. I must point out that the Government has to be forward-looking. Yet under our current system, the Chief Executive may not belong to any political party, nor may any Chief Executive candidate form a governing team when standing for election. Carrie LAM recently said that a Chief Executive candidate should form a governing team before standing for election, but subsequently LEUNG Chun-ying came forth and said that although this idea was practicable in principle, it was impracticable in reality as the team members have not been approved by the 7252 LEGISLATIVE COUNCIL ─ 13 April 2016

Central Authorities. Without a governing team, no forward planning is possible, and continuity is out of the question. This system of ours has created nothing but great difficulties for Hong Kong.

By "forward planning", the Financial Secretary means being "particularly mindful of the long-term needs of Hong Kong". He has generously set aside $45 billion as an injection into the Housing Reserve in support of public housing development. This being the case, I hope that the Government can discuss with royalist Members and the District Councils, and ask them to provide land and support for the Government. But then they might complain that there is a lack of ancillary facilities in the districts, and the Government would need to spend money on providing proper ancillary transport and district facilities. All these are financial commitments. In addition, the Budget has set aside $200 billion for a 10-year hospital development plan. At present, some hospitals really look awful and dilapidated. Deputy President, I wonder if you are aware of that. Mr TAM Yiu-chung certainly disagrees with me because he thinks that those hospitals are not very shabby, but in my view, the situation is utterly appalling. I once asked Secretary Dr KO Wing-man to roll out some benevolent policies; given that the public's mental health had been neglected for years, I suggested to him that the Government should allocate $10 billion to improve mental health facilities, but he hummed and hawed. From this we can see that it is actually very hard to make the Government agree to allocate funds when it keeps a tight grip on the purse strings.

I hope that next year, even though I will not be here anymore, the Financial Secretary can really make long-term commitments when he presents his next Budget, and he must persuade others to let him put these into action. Of course, no commitment is more long-term than retirement protection. At present, the Chief Secretary for Administration speaks in public every day, and every time she speaks, she makes many members of the public very unhappy. Now that the Government can set aside some $40 billion for this and $200 billion for that, can it allocate additional funds for retirement protection? I am not saying that the Government should bear the whole cost of it. Employers undoubtedly have to make contributions, and so do employees and the Government. All stakeholders should put their heads together and devise a relatively comprehensive retirement protection scheme.

Deputy President, when it comes to the Financial Secretary's proposals for economic development, I strongly agree with him on one point, which is about information technology. During the past 10 to 20 days, I paid two visits to the LEGISLATIVE COUNCIL ─ 13 April 2016 7253

Science Park, which clearly very much hopes to have more visits from Members. As far as I can see, Hong Kong has fallen well behind other countries. Deputy President, instead of looking at things far away, let us just look at a report by the Research Office of the Legislative Council on the Budget. The report compares Hong Kong with our rivals Singapore and South Korea, and points out that we lag far behind them in information technology. Deputy President, actually I do not need to tell you this, as you should know more than I do.

In the report, there is a diagram which compares the three places in terms of gross expenditure on research and development as a percentage of the Gross Domestic Product: 0.74% for Hong Kong, 2% for Singapore, and 4.29% for South Korea. Another indicator is researcher intensity, that is, the number of full-time equivalent researchers per 1 000 labour force. Singapore's researcher intensity is 13.02, compared to South Korea's 10.46 and Hong Kong's mere 6.15. There is yet another indicator, which is the Government's financial commitment. As mentioned by many Honourable colleagues, the financial commitment for innovation and technology activities in Hong Kong this year is $18.3 billion, whereas Singapore's commitment under the Research, Innovation and Enterprise Plan for 2016 to 2020 is $107 billion, and South Korea's commitment under the Third Basic Plan for Science and Technology for 2013 to 2017 even reaches as high as $612 billion. Our commitment in this regard is only some $18 billion this year.

Some time ago, when we visited Northern Europe, we saw that the relevant industries were thriving there. South Korea has now caught up with Northern Europe. Some people there told us that while some initiatives might fail, faith must not be lost. So, I would like to tell civil servants that … Civil servants are very afraid that they may be held accountable for making mistakes. We must all understand that we need to be bold in going about certain tasks, and while we may fail, the most important thing is that the rules must be transparent, fair, just, and publicly explicable. Now, apart from committing $10-odd billion to this area, the Financial Secretary also indicates that the Government has to help the tourism sector, saying that it is in grave peril and tens of billions of dollars are needed to rescue it. Still, the Government must have vision and commitment in developing the relevant industries. We greatly support this. Although we have been badly outpaced, I hope that the Financial Secretary and his colleagues can do their utmost to catch up so that Hong Kong will not keep falling behind.

I so submit.

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MR CHEUNG KWOK-CHE (in Cantonese): Deputy President, both the Government and society are aware of the serious problems arising from population ageing. Having a hefty amount of $860 billion in fiscal reserves, the Government must listen to the voices of society and speed up the implementation of universal retirement protection (URP), increase the places for long-term care services and improve the service quality. These are important aspects of social welfare services in Hong Kong.

Deputy President, in my speech on the amendment to the Motion of Thanks last month, I requested the Financial Secretary to earmark $100 billion as a seed fund for a URP scheme. However, in this year's Budget, he just earmarks $50 billion as the start-up fund of a retirement protection scheme. We find that under the item "operating expenditure" in the appendix of the Budget, a total of $50 billion is earmarked "for better retirement protection for the elderly in need", to be provided in three fiscal years. It seems that the Government has already drawn a conclusion for the ongoing consultation on retirement protection. It has no intention to implement a non-means-tested retirement protection scheme, and it will only provide retirement protection for the elderly in need.

In reality, most people are in favour of URP, that is, the Government should not only provide retirement protection for the elderly in need. In the past decade, various institutions and political parties have conducted a number of opinion polls on URP. Such bodies include the Public Opinion Programme of the University of Hong Kong (HKU), the Centre for Social Policy Studies of the Hong Kong Polytechnic University (PolyU), the Hong Kong Research Association, the Neighbourhood and Worker's Service Centre, the Hong Kong Catholic Commission for Labour Affairs, the Democratic Party, the , the Democratic Alliance for the Betterment and Progress of Hong Kong, the Department of Asian and Policy Studies of the Hong Kong Institute of Education and also the Hong Kong Council of Social Service. The findings show that over 50% of the respondents support the implementation of URP by the Government. Most of these polls show that over 80% of the respondents support the implementation of URP. Deputy President, members of the public have strong aspiration for an early implementation of non-means-tested URP.

However, the Government is still reluctant to implement URP, the main reason is the concern about cost overrun in the future. The universal old age pension option proposed by 180 scholars can address the cost overrun problem. Of the various opinion polls just mentioned, the Centre for Social Policy Studies LEGISLATIVE COUNCIL ─ 13 April 2016 7255 of the PolyU announced the findings of the study on Hong Kong people's views on universal retirement protection at end-January this year. Over 1 000 people aged 18 or above were randomly selected for the interview. Close to 70% of the respondents supported non-means-tested URP, close to 60% of the respondents were willing to put part of their contributions to the Mandatory Provident Fund to a URP scheme, and close to 90% of the respondents agreed that the Government should inject $100 billion into a start-up fund for URP. Moreover, close to 90% of the respondents agreed that the Government should impose a profits tax of not more than 2% on big enterprises which make high profits.

Deputy President, as reflected by this opinion poll, most people supported the implementation details of the scheme proposed by scholars. While the public were willing to make the required contributions to a URP scheme, they also demanded the Government and big enterprises to make contributions. In this connection, the implementation of URP will not increase the financial burden of the Government and big enterprises, and the URP scheme will be financially sustainable till 2064, with a surplus of over $100 billion. The scheme will not shift "the significant retirement protection expenses to future generations", as stated in this year's Budget. Instead, it will benefit future generations and enable the elderly of this generation and of the future generations to have financial support in their twilight years. Most importantly, under the scheme proposed by the people, new taxes need not be levied and the costs will not be shifted to employees of various strata, contrary to what is stated in the Government's consultation paper on retirement protection. The proposal put forward by the scholars requires the tripartite contribution from employees, employers and the Government. With contributions made by the three parties to finance the scheme, the proposal will be financially sustainable. With huge fiscal reserves, the Government can well afford to increase the start-up fund for a retirement protection scheme from $50 billion to $100 billion, so as to ensure its financial viability.

Deputy President, as the Government is increasingly reliant on the long-term elderly care service provided by the market, workers in the sector, the elderly people and their families are greatly worried. It is mentioned in this year's Policy Address and the Budget that $800 million has been earmarked for the implementation of the Pilot Scheme on Residential Care Service Voucher for the Elderly (voucher scheme). The Elderly Commission commissioned the HKU consultant team to submit another report on the voucher scheme after last year's incident involving the Cambridge Nursing Home, but the report has yet to 7256 LEGISLATIVE COUNCIL ─ 13 April 2016 be disclosed to the Legislative Council and the public. The Government must make public the latest report on the voucher scheme. Owing to the varying quality of private residential care homes for the elderly (RCHEs), what justifications does the Government have to implement the voucher scheme? Deputy President, after it was exposed last year that the elderly residents of the Cambridge Nursing Home in Tai Po was stripped naked while they were waiting for their turn to take bath, an elderly resident of the Cambridge Nursing Home in Kwun Tong was suspected to have been abused this year, indicating the serious lack of government regulation of private RCHEs. Service users and their families, as well as members of the public have serious doubts about the quality of service provided by private RCHEs and the feasibility of the voucher scheme.

Another problem concerning the voucher scheme is the co-payment system. According to the feasibility study on introducing vouchers for residential care services for the elderly conducted by the HKU, the face value of each voucher is set at $11,685 and the scheme is means-tested. The amount of money the elderly have to pay range from zero to the maximum of $8,764. The means test itself already gives rise to social division, dividing the people into different classes. According to the Government's written reply on the Estimates of Expenditure 2015-2016, the average monthly unit cost is $13,336 for contract RCHEs, $14,288 for subsidized care-and-attention homes and $20,801 for nursing homes. However, the face value of the vouchers is only $11,685. For a participating private RCHE to make profits, it must eventually lower its cost to under $11,685, meaning that it can only provide substandard services and those who suffer are the innocent elderly residents.

This year's Budget states that a recurrent provision of $140 million will be allocated from 2016-2017 onwards to provide more subsidized residential care places. According to the Government's written reply on the Estimates of Expenditure 2016-2017, there will be 210 places provided in "newly constructed contract RCHEs", 23 provided under the "Making better use of space in subvented homes", 15 under the "Converting some of the non-subsidized residential care places for the elderly in existing contract RCHEs into subsidized places", and 458 under the "Enhancing the service quality of six existing contract RCHEs". Altogether there will be only 706 additional subsidized/contract places available. According to the latest statistics provided by the Social Welfare Department (SWD), as at 31 March this year, a total of 33 368 applicants are on the Central Waiting List for subsidized residential care services for the elderly and the average waiting time is 36 months. Despite having to wait LEGISLATIVE COUNCIL ─ 13 April 2016 7257

36 months, elderly people prefer subsidized RCHEs over private RCHEs for the latter's service quality is questionable. Though having huge fiscal reserves, the Government does not allocate resources to construct subsidized RCHEs but implement the voucher scheme instead, handing the elderly over to the care of private RCHEs of questionable quality. Hence, the welfare sector and the service users demand the Government to abolish the voucher scheme immediately and review the specific planning on the allocation of resources for the construction of subsidized RCHEs.

The Government advocates "ageing in place as the core, institutional care as back-up", which is the right direction. As such, the Government should increase the places for community care service for the elderly, so that the elderly can remain and age in their familiar community, which is always their wish. However, though the first phase of the Pilot Scheme on Community Care Service Voucher for the Elderly fails to meet the needs of the elderly, the Government pushes through the second phase of the Scheme before making public the review report. Apart from adopting measures such as means test and a sliding scale of charges that will create social division, the Government also allows private organizations to provide services in the second phase. In the invitation document for the provision of the Community Care Service Vouchers, the requirements for authorized service providers, the prices list and also the regulatory mechanism are all very lax. As private organizations are only required to make self-declaration of the manpower and facilities, it is difficult to guarantee the quality of service. The biggest problem of inviting private organizations to provide services is that they are profit-oriented. In the end, public coffers are used to support private organizations to make profits, giving people the impression of collusion between the Government and the business sector.

The Government should allocate more resources to the Integrated Home Care Services and day care services for the elderly. As reflected by international experience, the enhancement of community care services can help slow down the physical degeneration of the elderly and reduce their need to live in RCHEs. However, in this year's Budget, the Government makes little effort to provide community care service. It is stated in the Budget that starting from 2016-2017, a recurrent provision of $17 million will be allocated to provide 160 additional day care places for the elderly. However, according to the SWD's latest statistics, as at 31 March this year, 2 885 applicants were waiting for such places. It is obvious that the additional places to be provided will not be able to accommodate all these applicants.

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According to the Government's written reply on the Estimates of Expenditure 2016-2017, as at end-December 2015, 2 704 applicants were waiting for the Enhanced Home and Community Care Services. Yet, it is stated in this year's Budget that since 2015-2016, the recurrent expenditure has been increased by $170 million to provide 1 600 additional places for this kind of services, meaning that over 1 000 applicants will be left out. The written reply also shows that the average monthly cost per case is $4,430. To meet the cost of one year's services for all 2 704 applicants on the waiting list in one go, the amount required is estimated to be roughly over $140 million. Besides, as at end-2015, as regards the Integrated Home Care Services, the numbers of applicants on the waiting list in ordinary cases and frail cases are 3 754 and 2 708 respectively. On the basis that the average monthly cost per case is $1,817, to meet the cost of one year's services for all applicants on the waiting list in one go, the amount required is estimated to be around $140.89 million. If the Government makes good use of the $800 million earmarked for the voucher scheme, this amount is more than sufficient to cover the costs of the community care services needed by all applicants on the waiting lists for one year.

Deputy President, when population ageing has become a pressing problem in Hong Kong, the Government still wastes time to implement the voucher scheme, thereby shifting its responsibility to provide elderly service to the private elderly service market with varying service quality. The Government evades the implementation of URP, ignoring totally the elderly's contribution to society in the past. This is not what a responsible government should do. Based on the Government's estimates of expenditure and fiscal surplus each year, the community has repeatedly proved that the Government is capable of substantially increasing the manpower and places for care and services needed by the elderly, and it still has surpluses after the implementation of URP. Hence, the Government must hasten its pace to address the problems of population ageing (The buzzer sounded) …

DEPUTY PRESIDENT (in Cantonese): Mr CHEUNG, please stop.

MR CHEUNG KWOK-CHE (in Cantonese): Thank you, Deputy President.

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MR TONY TSE (in Cantonese): Deputy President, in the face of greater fluctuations in the global financial market, increasing economic and monetary risks, and coupled with a decline in inbound tourism, leading to poor performance in the retail and tourist industries, it is really worrying. According to information, Hong Kong's Gross Domestic Product growth rate in real terms has slowed down since 2012, and the current rate is about 2% to 3% per year. Despite the slow development of the Hong Kong economy, our fiscal condition remains sound. Apart from recording a surplus for many years, the revenues from profits tax and income tax have been on the increase. The revenues from profits tax and income tax have even hit record highs in 2015-2016, at $138.1 billion and $60.5 billion respectively, representing an increase of $12.5 billion and $10 billion when compared with the year 2012-2013. The SAR Government has indeed made some achievement in this respect.

For many years, the principle of financial prudence has been adopted as the golden rule of fiscal management by each Financial Secretary. I certainly understand and will not object to this approach, but I do not want to see this golden rule of public finance become an invisible shackle, hindering the Financial Secretary in fiscal management. Consequently, he may become over prudent and miss some development opportunities having great impact on the long-term development of Hong Kong. In paragraph 158 of the Budget, the Financial Secretary says that in preparing the Budget, he has been particularly mindful of the long-term needs of Hong Kong. His proposals include setting up the Housing Reserve in support of public housing development, setting aside $200 billion for the 10-year hospital development plan and establishing the Future Fund as part of our long-term investment strategy. He says that the Government will continue to make forward planning for major financial commitments to meet the needs of social development and people's livelihood. I fully support and agree that the Government should adopt these initiatives to make forward planning for the long-term development of Hong Kong.

In the past, Hong Kong has injected a lot of resources in taking forward large-scale infrastructure projects, such as the Chek Lap Kok airport, water resource management facilities, as well as extension projects of the railway system and road network across the territory. The commissioning of these projects have brought huge benefits to Hong Kong. Hence, additional investment in more large-scale infrastructure projects, supported by talent training, will be conducive to long-term development of Hong Kong and enhance our overall competitive edges. Therefore, regarding the deliberate actions taken 7260 LEGISLATIVE COUNCIL ─ 13 April 2016 by some Members of this Council to delay the approval of works projects, I have to reprimand their irresponsible and destructive act for not only the livelihood of people engaging in construction-related industries are affected, the long-term development of Hong Kong is also undermined.

Although I support the SAR Government to implement more projects conducive to the long-term development of Hong Kong within the capacity of public finance, members of the public (including people in the construction industry and I) are greatly concerned about the recent serious cost overrun and delay of many large-scale infrastructure projects. Therefore, we support the Government to strengthen its management on the cost and progress of projects, make good use of professional services in cost control and cost estimation, consult and heed more advice of the relevant professional bodies, such as the Hong Kong Institute of Architects and the Hong Kong Institute of Surveyors, and so on. I strongly believe that enhancing professional participation will help to increase the efficiency of project management. Thus, I support the Government to establish the Project Cost Management Office (PCMO).

Nonetheless, I have to point out that the Hong Kong Institute of Architects and the Hong Kong Institute of Surveyors have recently written separately to the Panel on Development to express their views on the PCMO. They hope the Government will not merely focus on cost management at the expense of architectural functionality and design. They also hope that the Government will not use the excuse that some designs are lavish but impractical to stifle creativity. In fact, I believe Financial Secretary John TSANG knows about architecture and he would agree that many construction projects in Hong Kong have good functionality and designs and are well-managed in costs. Therefore, the Government should make good use of the PCMO. In respect of organization structure and establishment, professionals who are experienced in project cost management should be appointed to lead the PCMO. However, from the recent proposal submitted by the Government, the establishment of the PCMO seems to favour a certain profession. I have reservations about this approach and I hope the Government can reconsider the matter.

Deputy President, the Financial Secretary has proposed many measures in the Budget this year. He hopes to boost the economy by helping small and medium enterprises (SMEs), supporting tourism and easing the financial pressure of the public. As stated by the Financial Secretary in the Budget, there are 320 000 SMEs in Hong Kong, employing 50% of the private sector workforce. LEGISLATIVE COUNCIL ─ 13 April 2016 7261

This underscores the role of SMEs as the mainstay of our economy. Sound operation and continuous development of SMEs will directly affect the Hong Kong economy. Although the Budget has proposed some measures to support SMEs, I opine that the Government has all along only introduced piecemeal measures without providing through-train support to them in start-up, operation, sales and finance. In particular, I think the Government should provide a good environment for incubation and growth for start-ups, strengthen the role of the Government and actively assist SMEs to increase their shares in the local and overseas markets. The Government should introduce more construction projects which are smaller in scale and lower the experience requirements for tenderers, so that SMEs which are works consultants or engineering companies with fewer resources can have more chances to participate in the projects.

I have put forward a suggestion many times before which I hope the Government can consider. Some companies have bid for construction and development projects which require tenderers to submit design proposals. Although their tenders have not been accepted, their design proposals have fulfilled the specified requirements. Can the Government provide some special cash subsidies to encourage these tenderers to participate more actively in tendering and bidding exercises so as to increase competition? This will promote development in the industry as well as enhance the standard of design. I believe this proposal will only incur very little government expenditure. Unfortunately, the suggestion has not been accepted even though people in the industry and I have proposed time and again. I am very disappointed about this and I hope the Financial Secretary will seriously consider this suggestion.

Deputy President, tourism plays a very important role in the economy of Hong Kong. In promoting tourism, apart from directly providing appropriate support to the industry, it is equally important for the Government to do a good job in city beautification. In recent years, I notice that streets and alleys, carriageways and pavements in many places in Hong Kong are worn out; the hygiene conditions of streets have worsened; gravels and mud are often seen on streets, signs of roads and places are poorly managed and maintained and unsystematically placed, and certainly, devoid of any creative design. In comparison with our neighbouring countries and cities, for example, Tokyo in Japan and Singapore, Hong Kong lags far behind in terms of environmental hygiene and other aspects as mentioned above. Therefore, I hope the Government can put in more resources in engaging professional services in urban 7262 LEGISLATIVE COUNCIL ─ 13 April 2016 design, landscape design and planning, so as to step up its efforts in city beautification. I believe that with better public space and environment, more tourists can be attracted to Hong Kong.

Deputy President, in recent years, the Government has been paying attention to the challenges of an ageing population to the future society, particularly in terms of public finance. There is considerable coverage on measures to cope with an ageing population in the Budget this year. Among them is the proposal to enhance the quality of elderly services by means of technology, which is worth supporting. Nonetheless, in providing elderly services in Hong Kong, there is a pressing need to solve the problem of shortage of front-line service personnel. In fact, the problem has existed for years, but the Government has not taken the initiative to solve or alleviate it. Thus, I hope the Government will face the problem squarely and allocate more resources to train local service personnel. At the same time, it is most important to improve the job prospects and remuneration of these personnel so as to attract new entrants.

Moreover, I support the issuance of Silver Bond as stated in the Budget and I hope that the Government will formulate a more diversified policy to open up the silver hair market. According to the latest population projections published by the Census and Statistics Department last year, the average life expectancy of men and women, which was 81.2 years and 86.9 years respectively in 2014, will be on the increase. Many people will have a retirement life of 10-odd years. Thus, the Government must take care of the needs of the elderly, particularly housing needs, so that they can have a place to live in their twilight years. However, the Government has neither formulated a comprehensive policy on housing for the elderly, nor provided any incentive to encourage private developers to construct buildings which are suitable for the elderly. Hence, members of the industry and I will submit a proposal to the Government on how to promote the development of housing for the elderly in respect of policies, measures and resources.

Furthermore, education is a major area of recurrent expenditure in Hong Kong. The estimated expenditure on education in 2016-2017 is $75 billion, accounting for 21.5% of the total recurrent expenditure of the Government. Expenditure on education has actually increased by 70% over the past 10 years. Many people support the Government in allocating more resources to education and hope that all resources will be properly used in teaching and learning. They LEGISLATIVE COUNCIL ─ 13 April 2016 7263 definitely do not wish to see that some university teaching staff spend too much time in organizing and participating in illegal activities because that will affect their teaching and the learning of students to a certain extent. In fact, as the operation costs of universities are funded by the Government every year, it is absolutely understandable that members of the public have expectations on how these funds will be used.

Deputy President, some problems have arisen in our community in recent years. Many people find that Hong Kong has become very disorderly because some lawbreakers have disregarded the law in some activities and a handful of people advocate "Hong Kong independence", trying to segregate Hong Kong from China. Such actions and thoughts are extremely dangerous and they will have far-reaching effects on Hong Kong. Like many members of the public, I do not wish to see the achievements attained by Hong Kong through hard work over the years being destroyed. I also hope that in the future, members of the public will express their demands peacefully and rationally. As regards the SAR Government, in the face of increasing difficulties in administration and increasing factors of instability, I hope that it can focus on enhancing the efficiency of policy implementation, examine the various problems in a positive manner and seek effective solutions. At the same time, I hope that the Government can consider the significant pressure borne by civil servants when facing and handling these problems in the past, leading to a substantial increase in their workload. Therefore, I support the Financial Secretary for proposing in the Budget to recruit more civil servants. I hope that resources can be allocated appropriately to assist the government departments in need to alleviate the work pressure of civil servants and maintain the good standard of their service so that they can work in concerted efforts to promote the development of Hong Kong and improve the livelihood of the people.

With these remarks, Deputy President, I support the Appropriation Bill 2016.

MR FRANKIE YICK (in Cantonese): Deputy President, 98% of enterprises in Hong Kong are small and medium enterprises (SMEs), and they are the mainstay of our economy. In the Budget for the new financial year, the Financial Secretary mentions that under external economic impacts, the economic performance last year was at its worst since 2009. In order to reduce the burden on enterprises, he proposes to reduce profits tax and business registration fees. 7264 LEGISLATIVE COUNCIL ─ 13 April 2016

The Liberal Party and I fully support these measures as they will give SMEs some breathing space.

In view of the slackening tourism market, the Financial Secretary proposes to waive the licence fees for travel agents, hotels and guesthouses, restaurants and hawkers for one year. The original intent of the measure is good but regrettably, it is not comprehensive enough. While only three industries can be benefited, the other industries directly related to the tourism industry are neglected, which include the transport industry such as coaches, taxis and tour boats, as well as the freight and logistics industries which are affected by the slowdown of the tourism, catering and retail industries.

In 2015, the overall annual visitor arrivals dropped by 2.5%. Yet, the visitor arrivals in the first two months of this year have reduced by nearly 20% as compared with the same period last year, a reduction recorded for nine consecutive months. The number of Mainland visitors ― the main source of visitors to Hong Kong ― dropped by 26% year-on-year. In fact, the downturn in tourism not only affects travel agencies, hotels, guesthouses, restaurants and hawkers, but also the operators of coaches, taxis and tour boats. At present, nearly 10% of coaches are left idle, business of the taxi industry has declined, and the number of people joining boat tours has dropped significantly. Although the Hong Kong Tourism Board indicated that it would strive for more mega events to be held in Hong Kong, and would strengthen overseas promotion to revitalize our tourism industry, these measures still cannot solve the pressing needs of these industries. It is expected that it will be difficult for the tourism industry to pick up in the short run. We therefore hope that the Financial Secretary would understand the predicament of the related industries and expand the scope of relief measures to cover such industries. For example, he should consider waiving the related operating licence fees for one year or making reference to the relief measures last year and waive the annual inspection fees for one year. I hope the Financial Secretary would understand the ancient Chinese saying that inequality is worse than deficiency.

In recent years, the mode of operation of the freight industry has changed significantly: waterborne transport has gradually replaced cross-boundary road transport; with the rapid development of Mainland ports, some goods are directly exported from Mainland ports, which led to a continuous reduction in the total container traffic in Hong Kong. In addition, with rising operating costs in Hong Kong, particularly wages and parking fees, the operation of the industry has been difficult. The freight industry hopes that the Financial Secretary will reduce the first registration tax on commercial vehicles (goods vehicles) to the same rate of LEGISLATIVE COUNCIL ─ 13 April 2016 7265

3.7% for other commercial vehicles including taxis, minibuses and buses. The Financial Secretary should also consider freezing the short-term lease rental of car parks for freight vehicles, so as to lessen the operating costs of the industry.

During the Easter holiday not long ago, there was an influx of visitors to Cheung Chau. There are views that ferry services are inadequate. I know that the ferry companies have made every effort to cope with the passenger increase. In fact, local ferry services are facing the problems of serious manpower shortage and succession. I would like to draw the attention of the Financial Secretary to the point that, if the succession problem in the industry is not resolved, with the successive retirement of older employees, it is questionable whether the original services could be maintained or whether the operation could continue, not to mention that ferry companies will be asked to increase the frequency of service during festivals in the future.

Although the $100 million Maritime and Aviation Training Fund established in 2014 included the Local Vessel Trade Training Incentive Scheme, the Scheme only encourages crew members to meet the qualification requirements for a Coxswain/Engine Operator Grade 3 Certificate. The problem of shortage of front-line crew members encountered by the ferry industry remains unsolved. Since ferry services are indispensible, especially to the residents in the outlying islands, in order to attract new blood, I hope the Government would consider optimizing the $100 million training fund and establish a local vessel trade talent training fund. In addition to providing financial support, the Government should also vigorously publicize and promote the relevant training, so as to attract new entrants to the ferry industry and alleviate the serious shortage of front-line staff.

In addition to local ferry services, many industries are facing the problem of manpower shortage. It is recently reported that, due to a manpower shortage at the airport, arriving passengers have to wait longer for reclaiming luggage. Yesterday, I spent more than 40 minutes waiting for luggage. It is expected that the Midfield Concourse, officially opened on 31 March, will initially receive 10 million passengers each year, so the manpower demand will obviously increase further. Besides the airport, other transport industries are also facing the problem of manpower shortage. If the Government fails to introduce policies to alleviate the problem, the development of these industries will be stifled. Apart from providing more training resources and additional economic incentives to attract new entrants to the industry, it is hoped that the Policy Bureaux in charge of the related industries would introduce policies to attract new blood, so as to relieve the manpower shortage and succession problems. For 7266 LEGISLATIVE COUNCIL ─ 13 April 2016 example, in respect of manpower shortage of the freight industry, the Directors of Bureaux concerned may consider setting up a training fund for logistics practitioners engaging in SMEs to strengthen manpower training for the industry. Allowances will be given to employees taking pre-approved courses at approved institutions.

In recent years, the competitiveness of our shipping and logistics industry has been weakening. The container traffic at the port of Hong Kong has decreased for four consecutive years. The global economic performance in 2015 was at the worst since 2009 and the container throughput of Hong Kong sharply dropped by 10% from 22 million TEUs in 2014 to about 20 million TEUs. The container throughputs of Shanghai, Singapore and Shenzhen have already surpassed Hong Kong, and the port of Zhoushan in Ningbo also surpassed us last year. I believe that, by the end of this year, we may probably be surpassed by the Busan port in South Korea. The weak global economy this year and a decline in consumer sentiment will certainly have impacts on our logistics and freight industries. However, with the world's economic centre of gravity shifting east, the conclusion of the free trade agreement with 10 ASEAN countries within this year as expected by the Government, as well as the pledge made by the Mainland in the planning framework of the 13th Five-year Plan that it would fully support Hong Kong's role and functions in connection with the country's economic development and opening up to the outside world, I believe all these factors will be conducive to the development of our freight and logistics industries. Nevertheless, even with a favourable development environment, complementary government policies are still needed.

Regarding the shortage of sites for development, the SAR Government indicated in 2009 that it had identified a number of long-term sites with a total area of about 29 hectares in the Kwai Tsing district. Yet, so far only 6 hectares of land were made available. Over these years, the Government has all along said that 10 hectares of land in Tuen Mun have been earmarked, but only 3.6 hectares of land at the most can be made available this year. The progress completely fails to support the development of the industry. While there is a lack of supply of new sites, the Government has been grabbing land blindly to meet the housing demands in recent years. The Government has also started to recover some temporary car parks under short-term tenancies, now used for parking for heavy good vehicles, and container yards, but without providing other sites as substitutes, hence the demand for parking spaces exceeds supply. The pressure of high parking rental has forced the industry to illegal parking. In this connection, I hope the Government would speedily allocate land to support the development of the logistics industry. If it is necessary to recover temporary LEGISLATIVE COUNCIL ─ 13 April 2016 7267 sites under short-term tenancies, I hope the Government would adopt the policy of "accommodation before development".

The Government has just completed a review of the operation and management of Public Cargo Working Areas (PCWAs) and the results demonstrated the importance of PCWAs as a part of the entire logistics supply chain. When the review was underway, some PCWA operators expressed the hope that the Government would provide a longer-term tenancy to encourage operators to make longer-term investments, with a view to improving the operation of PCWAs. There were also views that the access charges on vehicles would be calculated on an half hourly basis rather than on an hourly basis. This can increase the vehicle flow within PCWAs and reduce the operators' operating costs.

I consider these demands of the industry reasonable. Therefore, I hope the Government would at least extend the current five-year tenancy to seven-year tenancy to tally with other short-term tenancies. In the long run, the authorities should consider granting land to operators for long-term investments, as in the case of port construction. Regarding the access charges on vehicles, though the charge will now be made on an half hourly basis, the Government is now charging $25 for half an hour, 50% higher than the existing charge of $33 per hour (that is, $16.5 for half an hour). The arrangement is not considered undesirable by the industry. Given an economic downturn, the amount of cargoes handled at cargo handling areas has reduced from 7.2 million tonnes in 2014 to 6.5 million tonnes in 2015. Business is rather difficult for the industry and their continuous development depends to a large extent on whether the operating costs can be controlled. Since the Government has recognized the contribution of cargo handling areas to our economy and society, I hope the Financial Secretary would consider further reducing the access charges on vehicles entering cargo handling areas to $16.5 per half hour, so as to support the development of the industry.

To further facilitate trade in goods, the Financial Secretary establishes a "single window" in the Budget for "one-stop" customs clearance purpose. The Government will set up a dedicated office to prepare the detailed design and implementation programme for the "single window". I strongly support this arrangement. But to speed up the work, I think the Government should, in developing the "single window", connect the "single window" system to the related work now in progress on the Mainland. As we all know, the Mainland is rapidly developing the "single window", so that the so-called "one declaration, one inspection, one cargo release" arrangement can be extended to the coastal cities. The Mainland also has plans to start extending the arrangement to the 7268 LEGISLATIVE COUNCIL ─ 13 April 2016 whole country in 2018, and then to 10 ASEAN countries in the future, forming a regional e-logistics platform to promote information flow and seamless customs clearance within the region. As a next step, the Mainland will further develop the "international trade single window" and extend the coverage to the intercontinental sea, land and air conveyance Internet of things, and extend the scope of cargo sources and volume, in order to strengthen shipping and logistics services.

The Chief Executive stated in the Policy Address this year that the Government has earmarked $80 million to provide franchised bus companies with a subsidy to install seats at more than 1 000 bus stops for the convenience of waiting passengers. Real-time bus arrival information display panels will also be installed at bus stops. I strongly support this measure. However, I think the subsidy should not only be provided to franchised bus companies; other public transport companies, such as Hong Kong Tramways, should also be provided with a subsidy. Places like Taipei, Singapore and Japan have installed real-time bus arrival information display panels. As passengers will know when the next bus will arrive, they do not have to waste time waiting at bus stops and can make efficient travel arrangements. Nonetheless, since the installation of such facility incurs expenses and business is difficult for all modes of public transport due to the continuous expansion of the railway network, the Government must provide subsidies. On the additional provision of $200 million for the installation of traffic detectors at some major trunk roads to provide more real-time traffic information, drivers can decide whether they should travel on other less congested roads. This facility can enhance transport efficiency and reduce social costs due to traffic congestion. As a matter of fact, if the Government is committed to developing Hong Kong into a smart city, we must accelerate the speed of information technology application.

The Financial Secretary stated in the Budget that, according to the Global Information Technology Report 2015 published by the World Economic Forum, Hong Kong's mobile network coverage ranks first in the world. Yet, in terms of Wi-Fi access, the coverage is mainly restricted to government premises. As the Internet has now become a necessity of life, I strongly support the Financial Secretary in earmarking $500 million to further expand Wi-Fi coverage. I also hope that the Government would expeditiously increase the number of Wi-Fi hotspots in major tourist spots, inner harbour ferry piers, public transport interchanges and various ports often visited by travellers, so that they can obtain travel information via the Internet.

With these remarks, Deputy President, I support this Budget.

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MR WONG TING-KWONG (in Cantonese): Deputy President, apart from caring for people's livelihood, this year's Budget has shown more concern for the needs of small and medium enterprises (SMEs) and has formulated measures to help SMEs. The Budget is quite a good one. In the introduction of the Budget, the Financial Secretary describes the current economic environment as adverse, which is indeed true. Currently, the global economy is unstable, the Mainland's economy is slowing down, and Hong Kong is beset by internal strife, such as Occupy Central, riots and filibusters. All such factors have created uncertainties to our economy. The tourism and retail industries, the traditional economic pillars, have given out signals of crisis.

In 2015, tourist arrivals dropped by 2.5% and the value of total retail sales decreased by 3.7%, the decrease rates were even higher than that during the SARS period in 2003. This year started with an even worse scenario: both the value of total retail sales and the total tourist arrivals dropped by 13% in January and February. Even in districts such as Causeway Bay and Mong Kok, which always have a high turnover in both visitors and sales, there are many vacant shops. All these signs are indeed worrying. No wonder Mr LI Ka-shing said that the Hong Kong economy might be in the worst conditions over the past two decades, even worse than the days of SARS. Thus, I hope that the Government must be well-prepared to cope with the outbreak of an economic crisis at any time.

Hong Kong has always been renowned as a "tourists' paradise" and a "shoppers' paradise". As the number of Mainlanders, our major source of visitors, coming to Hong Kong has declined, our tourism and retail industries have instantly suffered greater hardship. The drop in Mainland visitors may be due to different reasons, such as the devaluation of Renminbi, the slowdown of the Mainland's economy, and so on. Yet in my view, a more important reason is the frequent occurrence of incidents in which Mainland visitors are being discriminated against or cheated in Hong Kong. In recent years, some radical groups in Hong Kong have stirred up Hong Kong-China conflicts on the pretext of defending localism. They have instigated their followers to assault Mainland visitors. There are also some unscrupulous traders who rip off Mainland visitors with counterfeited goods or the trick of changing the pricing unit from catty to tael, thus Mainlanders have the feeling that they pay but suffer in return. With higher exchange rate of Hong Kong dollars against Renminbi, things are not particularly cheap in Hong Kong. Mainlanders thus go to Japan, Korea and Europe for shopping instead.

The Government now waives the licence fees for hotels, restaurants and travel agents. On the face of it, this measure can ease their burden, yet it only 7270 LEGISLATIVE COUNCIL ─ 13 April 2016 serves a soothing and encouragement purpose. To solve the problem at root, we must work on the hardware and software, so as to reverse the trend of decreasing visitors and falling revenue. On software, the Government must promote afresh hospitality and enforce the law stringently to combat the black sheep, so as to restore Hong Kong's reputation as a "tourists' paradise" and a "shoppers' paradise". We ought to do the best on our part, so as to convince tourists to come to Hong Kong for consumption. Otherwise, no matter how many additional resources are allocated for singing praises of Hong Kong abroad, one or two incidents of fleecing customers or "kicking suitcases" will be enough to waste all efforts made.

On hardware, we truly have insufficient space and facilities. In the past, visitors mainly shopped in certain districts, which would indeed affect the daily lives of residents. Therefore, the Government should provide additional tourist facilities and tourist spots to enhance Hong Kong's attraction. It should also divert tourists to other places to reduce the impacts on the daily living of residents. Over the years, I have been promoting the establishment of a boundary shopping facility, with a view to selling products of local brands and international labels in the form of a shopping outlet near the boundary. This can divert visitors and provide an additional leisure option for local residents.

Although the number of visitors has decreased, the business promotion activities of the boundary shopping mall have received enthusiastic response. If everything goes smoothly, the shopping mall may start operation around July or August. I hope the Government would keep improving the ancillary facilities, so that the mall can play an effective role in promoting the further development of the Hong Kong economy.

Certainly, in the long run, it is essential to widen our source of customers. On the one hand, we have to attract visitors from regions and countries other than the Mainland to come to Hong Kong; and on the other hand, we have to attract local residents to stay in Hong Kong for consumption, so at to boost domestic demand. To meet these two objectives, we have to launch marketing activities to create the atmosphere, and more important still, we have to attain diversification, so that consumers can have a great variety of choices: luxury goods, daily necessities, chain shops of famous brands, old neighbourhood stores, high-end goods, inexpensive products. All in all, there are goods that can meet individual needs. To this end, the commercial areas should be big enough to accommodate different types of shops so as to attract a wide range of customers. The Budget proposes to develop commercial sites and increase the supply of commercial floor area, which can precisely meet the demand of society. The LEGISLATIVE COUNCIL ─ 13 April 2016 7271 problem lies in whether sufficient sites can be provided expeditiously. Amid the present turmoil political environment, I do feel helpless sometimes.

Hong Kong is facing an economic crisis. We must safeguard the economy and people's livelihood. In particular, SMEs and small and medium traders are the main targets for protection as SMEs and the general public are closely related like the two sides of a coin. In Hong Kong, 98% of business organizations are SMEs, their employees take up half the labour force of the private sector. When the economy is good, the profits of SMEs are eroded by rental increase of landlords; when there is a downturn of the economy, the sales of SMEs plunge, but rents are quick to rise but slow to drop. With capital flow problems, SMEs may be forced to wind up their business, affecting the livelihood of numerous people.

The Budget proposes to waive business registration fees, exempt licence fees for certain operators and reduce profits tax, which are conducive to relieving the burden of SMEs. I certainly strongly support these measures. However, the survival of SMEs hinges on capital flow. As SMEs are operating small businesses, it is difficult for them to obtain bank loans. At present, they mainly rely on the guarantee coverage provided by the Hong Kong Mortgage Corporation (HKMC) under the SME Financing Guarantee Scheme (SFGS) and the Special Concessionary Measures under the SFGS to obtain loans from banks. The Budget proposes to extend the application period for the Special Concessionary Measures under the SFGS, reduce the annual guarantee fee rate by 10%, and remove the minimum guarantee fee. All these measures may facilitate SMEs to obtain loans more easily. This is definitely good news to the sector.

However, the media has recently uncovered that while the success rate of applications seems to be very high under the SFGS (at almost 90%), it turns out that the banks would impose some unwritten requirements privately at the initial vetting stage. For instance, the enterprises are required to produce proofs of property ownership or records of not running a loss over the past three years; or else the banks would persuade the applicants to withdraw their applications at the outset. Such requirements are unreasonable. If an enterprise owns a property and has a profit every year, it will not need the guarantee from the HKMC at all and it can obtain a loan. By imposing such requirements, the banks are actually making the SFGS deviate from its intent of helping SMEs to obtain loans. Hence, I hope that the Government may review the current implementation of the SFGS, so as to ensure that the participating banks would put into effect the objective of the SFGS, that is, eligible SMEs in need of help can be practically benefited.

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Members of the sector tell me from time to time that the application procedure of the SFGS is cumbersome, the approval period is long, and the lending interest rate is high, which does not tally with the prevailing low interest rate environment. They consider the Special Loan Guarantee Scheme (SLGS) launched in 2008 better. Moreover, no guarantee fee was required under the SLGS. Although the guarantee fee under the current SFGS is lowered, it is still higher than the fee charged under the SLGS. We hope the Government may study and compare the two schemes in respect of their pros and cons as well as similarities and dissimilarities, with a view to either improving the current SFGS or re-launching the SLGS.

Doing business is just like sailing against the current, either you keep forging ahead or you keep falling behind. We must thus always consider exploring for a larger market. Looking north to the Mainland has been the major trend over the past two decades or so. Nowadays, people go northward for a living, and the CEPA regime has also become more and more mature. While tapping into the Mainland market is still a major objective of enterprises, some ambitious enterprises have started to examine the Belt and Road Initiative put forward by our Motherland and considered how to explore this market which is even bigger. The Government should duly play the role as a go-between and help enterprises understand the policies, legislation and market situations of different places in their course of "going global". It should also assist enterprises in communicating with the local governments, business sectors and people of the places concerned, so as to get twice the result with half the effort. Surely, other than certain enterprises, society in general still does not understand the Belt and Road Initiative. The Government should thus enhance its promotion in this regard to inform various sectors the benefits of the Initiative. In this way, the Government can easily rally public understanding and support when launching relevant policies and measures on the Initiative, thereby reducing misunderstanding and resistance.

(THE PRESIDENT resumed the Chair)

President, this year's Budget as a whole reflects that the Government has attached importance to the commercial and industrial business environment and the situation of SMEs. I support the passage of the Budget. I so submit.

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MISS CHAN YUEN-HAN (in Cantonese): President, unnoticeably, I have returned to this Council for over three years, and this will be my last chance to speak on the Budget in this term of the Council. It is unlikely that I will have another chance in future. Before I leave, I would like to make known some of my views and understanding concerning the work of this Council.

I did not return to this Council through direct election in a geographical constituency but through the super District Council functional constituency. Because of that, I have more chances to handle issues concerning regional development, such as the development of New Territories North and Hung Shui Kiu. I have also come into contact with many people who have expressed many views concerning the present situation of Hong Kong. I feel strongly for the plight of the grassroots and wage earners whom are my prime concerns.

President, as we all know, wage earners, being an important force for society development, are always in a disadvantaged position in Hong Kong due to some unknown reasons. Even for some basic labour rights, they have to fight for years and what they can get is limited. Owing to the homogeneous industrial structure of Hong Kong, many government policies are in favour of big consortiums. When the economy is prosperous, wage earners may not be able to share the fruits of prosperity, but when the economy slows down, they are the first ones to suffer, having to bear the brunt.

The Hong Kong Federation of Trade Unions (FTU) has always called on the Government to adopt an employment-oriented economic policy. I have also pointed out repeatedly that owing to our over homogeneous industrial structure, the development of a diversified economy is the only way out. However, despite my appeal for almost two decades, the situation remains unchanged. The Government has not squarely addressed the problem and the economy has yet to be diversified. Our economy still relies heavily on a few industries such as financial, real estate and retail. Owing to the global economic downturn and uncertain prospects, bad news such as sluggish employment market and pay cuts have often been reported in the press.

When faced with difficulties, the Government always adopts a piecemeal approach. This is already the third term of Government after the unification, but it still employs the same tactic. When the unemployment rate is high, the Government creates temporary jobs or even tries to delay young people's entry into the labour market so as to present good employment statistics; yet, it never tries to resolve the problem at its root, that is, the economic structure. We wonder if the culprit is the factor of free economy. In this connection, I hope 7274 LEGISLATIVE COUNCIL ─ 13 April 2016 that the Financial Secretary will give us an answer after we have spoken. If he does not agree to it, why has the Government never taken the initiative to implement any policies to solve the problem?

Frankly speaking, such views were first raised by the grass-roots working class, but now even small and medium enterprises (SMEs) and the business sector share the same view. The Government has all along failed to prescribe the right remedy to the maladies. It has never expanded the room for development outside the mainstream industries, so that the grassroots can have their room for survival and do not have to follow the rules of games of big consortiums. I hope that the grassroots and SMEs have their own room for survival and need not follow the directions of big consortiums.

In recent years, I have talked to many people. Under today's social atmosphere, everyone faces the same question of how to find room to progress in an adverse environment. I am particularly impressed by these words. I ran for the Legislative Council election in 1991. At that time, the pro-establishment camp was under attack, and we, a group of people who refused to give in, formed a political party and commenced to work. Though the current environment has greatly improved, no breakthrough has been made in respect of the employment prospects of the grassroots. I always take such issues to heart.

When I visited many districts in recent years, I saw some resilient young people who have done much work. For example, recently many stylish leather shops and cafes have sprung up in the neighbourhood of Tai Nan Street, Sham Shui Po, creating a new ambience to the district. Thanks to these new elements, the old district has been rejuvenated. I am particularly attracted to one shop. The shop was very tastefully decorated, like a Japanese shop. The young owner told me that he used to have a workshop in a factory building but because of the escalating rents ― the culprit is the Government's so-called revitalization of industrial buildings ― he simply could not afford and finally moved to Sham Shui Po, an old district, and established his shop there. He reminded me of "Shiu Keung", a cockroach known for its never-dying spirit. Some people are as tough and resilient as a cockroach, and they are now fighting hard for their ideals in Sham Shui Po.

However, they are also very worried about their prospect when the old district has thrived. They wonder if they will be driven out by the escalating rents, as in the case of other districts. They are striving hard for survival, and at the same time, they are worried. Why do Hong Kong people have to pay such a high cost to pursue their dreams? Why does the Government not help them? LEGISLATIVE COUNCIL ─ 13 April 2016 7275

We always hear the older generation criticizing young people for not willing to endure hardships. But is that the reality in their mind? Not so. If anyone wants to challenge my view, I am willing to take them to various districts to visit these resilient young people.

The owner of that shop said to me, "We do not expect any support from government policies. We are grateful enough if the Government does not bother us." Why does he say so? Nowadays, many young people say that it would be good enough if the Government does not bother them. What has happened? Some time ago, some young people gathered together and voluntarily organized sidewalk vending in Sham Shui Po to promote cultural activities and street economy. Such activities had been quite successful until staff of the Food and Environmental Hygiene Department showed up and sidewalk vending could no longer be held. Upon hearing that, I could not help but sigh in despair. Every Sunday, the 47th Street and 48th Street in New York are open for holding markets. If Sunday markets can be held in the hustle and bustle New York City and Manhattan, why can't Sunday market be held in Sham Shui Po? It totally boggles my mind. These young people have not caused any nuisance and they abided by the law. Why is the Government so rigid? The Government refuses to grant license as suggested; and it forbids people to hold sidewalk vending in an orderly manner for one day or half a day. Does the Government want all ordinary people to work for big consortiums and it will not stop until people are driven to an impasse?

President, FTU and a group of people who are concerned about this issue have conducted studies for years and gained some insightful knowledge. I have repeatedly pointed out that the United States was the first one to advocate dual economies to solve the livelihood problem of a large number of immigrants in the country. The immigrants are given room to develop their own economy. I wrote a book titled Street Economy a few years ago and I had given copies to the Directors of Bureaux in charge of the relevant areas. To find a solution, we need to start from the economic structure and develop industrial diversification, and street economy may break this impasse, giving the grassroots a glimpse of hope. In providing the grassroots with jobs and creating opportunities for the general public, people are also given the choice to buy inexpensive goods of high quality.

Street economy can be in the form of fixed pitches, itinerant hawker stalls or even sidewalk vending. Street performances or entertainment activities can be held along a main street or within the precinct of a building. The area can be extended to the neighbouring areas, impacting on the consumption ecology of the whole area. For example, the grand market in Wai Chai, which was developed 7276 LEGISLATIVE COUNCIL ─ 13 April 2016 naturally, and also Nga Tsin Wai Tsuen in Kowloon City. I once took Secretary Gregory SO there for a visit. A unique ecology has been developed there, which is complete and full of local characteristics. More importantly, it belongs to the grassroots, providing them with the soil for survival.

I put forward many suggestions in my book Street Economy, such as holding bazaars and making use of spaces underneath flyovers, issuing licences for food trucks, and so on. Although the Government has introduced the Energizing Kowloon East project to utilize the space underneath flyovers, and the pilot scheme on food trucks, I hope the Financial Secretary would understand that the food trucks he proposes is a far cry from what we have in mind. To implement his pilot scheme on food trucks, a certain amount of capital, at least hundreds of thousands of dollars, is required. From the perspective of the grassroots, this kind of government policies does not meet their needs. But I understand. After the Financial Secretary has put forward the plan, the plan has been amended by various Policy Bureaux, imposing this and that restriction. In seeing the final product (I do not wish to describe as a "monster"), I cannot help feeling baffled.

I must stress that street economy is not confined to hawking; it refers to an economic ecology stemmed from the streets, featuring small businesses, local characteristics and the stress on human relations. Apart from providing a consumption platform for the grassroots, it also fosters the cohesion spirit of the community, giving the grassroots some breathing space outside the mainstream economy. From the perspectives of employment, social as well as cultural development, the street economy's value comes from its unique flexibility and diversity. It provides people with alternative support other than the mainstream industries, allowing the overall economy to have dimensional and sustainable development.

President, here I must discuss the issue of giving support by providing land. To develop a diversified economy, land resources are essential. The young people whom I mentioned just now are having some success in their development in Sham Shui Po. President, you should pay a visit there when you have time. The shops are beautiful with a rich Japanese feel. However, these young people are afraid that when their landlords see how well they are doing and the districts are growing in prosperity, they will substantially raise the rents. In the end, these young people will again be forced to move to another place to start all over again. President, in ancient times, the mother of Mencius moved three times to educate her son, but today shop owners have to move three times for survival.

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The Government always talks about developing innovative industries, but without land, it is very difficult for development to take place. People need to have a steady place where they can freely engage in creation, without having to worry about escalating rents and being driven out. At present, the term of tenancy tends to be one year plus one year. No one knows the rental increment two years later or whether the tenancy will be renewed or not. Small business operators may not dare to invest heavily in decorating their shops for fear of losing everything two years later.

Regrettably, whenever land is mentioned, the Government only cares about property development or commercial use. It never sets aside land to support the development of industries. Even when someone intends to do so, the Government will stop them. In redeveloping the old districts, the Government will only tear down the old community, drive out the original residents and remove the unique features of the community, and then build high-rise buildings, turning the item into a property development project. That is the Government's idea of redevelopment of old districts. Sometimes I am depressed to see so many failure cases, such as the redevelopment of Yue Man Square in Kwun Tong, where I used to live, and the redevelopment of in Wan Chai, where I grew up as a child. I am very worried that the Urban Renewal Authority (URA) will remove the prevailing features of Sham Shui Po as well as the community which gives room for the grassroots. I think the Government should change its old mentality in respect of land use and the promotion of industrial development. Yet, the URA has failed to do so, and I have strong views on its approach. The URA talks about three Rs and five Rs, which I have no idea what they are all about. The Government should make reference to the successful cases in other places and learn from them how to make good use of land to support the development of industries. It should not merely allocate funds to property development projects.

The Financial Secretary has, in his two Budgets in a row, talked about furthering the development of the fashion industry. I welcome this initiative. But, as I have said before, while this is a good idea and I will not object to injecting funds and training talent in this area, he has not mentioned how to provide land support. We always talk about how South Korea has succeeded in establishing its fashion industry. They not only export fashion products but also talent. Many youth product lines in Europe and the United States are produced by South Koreans. Has the South Korean Government contributed to the success of the industry, in terms of policy support and land supply? From the reinstatement of Cheonggyecheon by LEE Myung-bak to Dongdaemun today, frankly speaking, I am envious. I have talked about this idea for ages and have 7278 LEGISLATIVE COUNCIL ─ 13 April 2016 also given a number of books to various Chief Executives, it is a shame that no actions have been taken.

I am fully aware that land is precious in Hong Kong, but I hope the Government will reflect on the fact that property developers practically rule Hong Kong and can do whatever they want because they control our land resources. Therefore, the Government must have the determination to provide the soil so that the seeds of various industries can grow. Only then can our economy be restructured and social development take root.

Lastly, I said the following words at a meeting of the National Committee of the Chinese People's Political Consultative Conference in Beijing. At that time, we were talking about young people in Hong Kong. I said that Hong Kong was affected by a trough of low pressure in the past few years; people feel suffocated and desperate. I also talked about wealth disparity, uneven distribution of resources, the lack of opportunities for young people and the grassroots to move upward, and the lack of a breathing space in society. I expounded my views in great detail in Beijing.

Recently, there is a movie about three notorious bandits. It depicts how they face the reunification, the change of times and the transformation of society. One feels certain sadness after watching the movie. Is Hong Kong no longer glorious as before, just like the three main characters in the movie ?

Today, we are in the midst of a great era. Everyone must consider how Hong Kong is to move forward. If the polarization of society continues, we will eventually reach a point of no return. Both the politics and the economy need to be diversified. Only then can we find a way out.

With these remarks, President, I support this Budget.

MR ANDREW LEUNG (in Cantonese): President, the Business and Professionals Alliance for Hong Kong (BPA), the Federation of Hong Kong Industries (FHKI) and I are all of the view that the Financial Secretary has taken on board proposals raised by various parties in his Budget this time. It can be said that he has been responsive to good advice and is pragmatic. In addition to introducing some short-term relieve measures to alleviate the tax burdens of the commercial and industrial sectors as well as the general public, he has also set aside some "ammunition" to invest in the future, so as to assist enterprises to develop new markets, provide young people with more training opportunities, as well as help Hong Kong face the new economic order ahead.

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The word "industry" has scarcely been mentioned in the past policy addresses and budgets published by the Government of the Hong Kong Special Administrative Region (SAR); even if it has been mentioned, not much has been said. I went to Beijing in March and April respectively. In both visits, I met with various departments, including the Ministry of Commerce and discussed the "Internet Plus Manufacturing", smart manufacturing, green manufacturing and transforming production-oriented manufacturing into service-oriented manufacturing advocated in the "Made in China 2025" strategy promulgated by the State Council last year. It is foreseeable that this new policy will change the industrial mode of both the Mainland and Hong Kong, particularly the Pearl River Delta (PRD) Region. Therefore, the FHKI is happy to see the initiatives on promoting "re-industrialization" and development of innovation and technology of Hong Kong in the Budget.

The industrial sector has all along emphasized that scientific and technological innovation, as well as design, are vital elements in respect of upgrading and restructuring of enterprises and enhancing their competitiveness. When I spoke on the Motion of Thanks in February, I pointed out that the whole world is entering the "Industry 4.0" era, that is, smart manufacturing based on the cyber-physical system. With the application of Internet as the basis, the manufacturing system is integrated with the Internet of Things and the Internet of Services to cover smart products, smart logistics, smart construction, smart electricity network, and so on, thereby forming a smart factory network. In connection with the "Made in PRD Study IV" Report released at the end of last year, the FHKI has proposed some policy suggestions on the global trend of development as well as the national "Made in China 2025" strategy, including the need to formulate comprehensive industrial policies and system to cover the nurturing of industrial talent, scientific research and innovation, improvement of our manufacturers' capability, development of new industries, reinforcement of traditional industries, provision of support to development of small and medium enterprises (SMEs), and land planning. I hope government officials will not merely give verbal support; instead it should formulate expeditiously relevant policies to strongly support "re-industrialization" with concrete actions.

President, during my visit with the FHKI delegation to Beijing last week, we called on several ministries and commissions, including the Ministry of Commerce and the Ministry of Industry and Information Technology, and we talked about the need to make changes in industrial production and operation. As we can see, the mode of industrial operation has been changing rapidly on the Mainland in recent years, and a lot of innovative and technological elements have been included with the support of policies. I have told officials of the SAR 7280 LEGISLATIVE COUNCIL ─ 13 April 2016

Government time and again that the level of support from the Government is very important in encouraging research and development (R&D) in the sector. On the R&D development in Hong Kong, from the time when Mrs Rita LAU was the Secretary for Commerce and Economic Development to the present when Mr Nicholas YANG is the Secretary for Innovation and Technology, the percentage of R&D expenditure of the Gross Domestic Product (GDP) has only increased from 0.6% to 0.74%, a mere increase of 0.14% in more than 10 years. The result is highly unsatisfactory. According to government officials, a number of initiatives had been launched in the past, and a cash rebate scheme has also been introduced. While it is true that the SAR Government has launched various initiatives, the increase in R&D expenditure over the years is merely 0.14%. In other words, if these initiatives have not been effective, consideration should be made to adopt more effective means to encourage the sector and support enterprises in conducting R&D.

Singapore and South Korea are doing very good in innovative and creative industries. By developing science and technology, South Korea has even become, in 10 years' time, one of the fastest-growing economies in the Organisation for Economic Co-operation and Development (OECD). It is also the most R&D intensive country, with its total R&D expenditure accounting for 4.29% of its GDP in 2014. In the face of keen competition from our neighbouring regions, the SAR Government has to further motivate the community to invest in R&D. In this connection, the FHKI suggests that the Government should set up a target to increase R&D expenditure in Hong Kong from the present less than 0.8% of the GDP to 2.5% or 3% within a decade, so as to narrow the gap between Hong Kong and our neighbours.

President, many companies in the Hong Kong industrial sector are engaging in R&D, the quantity and quality of which are rather good, and have also attained world-class standard. However, their R&D centres are set up in the Mainland, Europe or the United States instead of Hong Kong. The sector is of the view that Hong Kong has many good complementary edges, such as the legal system, protection for intellectual property rights, and so on, that are conducive to R&D, yet the policies have all along been unattractive. Therefore, officials and the Government have to find ways to attract local and overseas companies to make Hong Kong their R&D base, thereby pooling talent together. To achieve this goal, policies should be formulated as the driving force. I am glad that the Government has increased the rebate rate of the Research and Development Cash Rebate Scheme to 40%, so as to encourage more SMEs to invest in R&D. However, such rate is still inadequate. In our opinion, the authorities should promote the upgrading of the entire industry through innovation and technology LEGISLATIVE COUNCIL ─ 13 April 2016 7281 to smart production, which includes switching to automated production system, replacing labour-intensive practice with robots and robotic arms, and using 3D printing technology to speed up the conventional mould-making process, so as to enhance production effectiveness.

In order to ensure that there will be a supply of talent in the labour market to support the Government in promoting the development of robotics, healthy ageing and smart city, the Government has to allocate additional resources to tertiary institutions, the Vocational Training Council, the Hong Kong Productivity Council, and so on, for procuring new equipment for training purpose, so that more young people can acquire the programming skills and the sectors can get more support in adopting robotics. Furthermore, enterprises should be encouraged to increase their expenditure in innovation and technology, R&D, brand building and design. In fact, the most direct means is to introduce tax concessions.

Over the past 10-odd years, the FHKI has been proposing the provision of a triple tax deduction on relevant expenditures for enterprises. This is the most practical way to provide initiative to the sector to put in resources for R&D and design, so as to facilitate the integration of these new elements with the conventional industries to enhance values of production lines, and enable local industry to have new development. Tax deduction can enhance the flexibility of enterprises in the course of R&D. In the past, government officials rejected our proposal on the pretext that Hong Kong has all along been adopting a simple tax regime. We have thus continued with our lobbying work by using overseas examples to convince the SAR Government that tax deduction is feasible. When government officials said that was not enforceable, the FHKI then invited relevant overseas tax experts to fly to Hong Kong and discuss with the officials. However, no relevant measure has been mentioned in this year's Budget, which is a great disappointment to both the FHKI and I. The officials said there were difficulties in implementing the measures, and the problem must be resolved first. If R&D is to succeed, favourable conditions must be present to draw R&D talent, and such conditions must be built on the basis of policy. I hope the Government may speed up its study, and implement the proposal in response to the request from the sector and us.

President, the Financial Secretary has set aside many resources for SMEs in the Budget, which include extending the application period for the "special concessionary measures" under the "SME Financing Guarantee Scheme"; reducing the guarantee fee; reducing profits tax; and waiving the business registration fees as well as the licence fees for the tourism industry and 7282 LEGISLATIVE COUNCIL ─ 13 April 2016 restaurants. Given the downturn of the economy, these relief measures are thus very important to the survival and development of enterprises. When I met with my fellow members of the FHKI earlier, I learnt that they were rather interested in the $500 million Pilot Technology Voucher Programme. I believe both SMEs and the information technology (IT) sector will benefit from the Programme. I hope the application procedures can be simplified as far as possible to reduce the procedural cost of SMEs, and consideration would be given as to whether the amount of subsidy should be increased during the interim review of the Programme.

President, Hong Kong is a maritime hub of the region with a huge volume of import and export cargo between Hong Kong and the Mainland every day. Very often, the amount of goods to be declared will only be ascertain after the goods are loaded into the container and ready for departure. The Government is moving in the right direction to plan for establishing a "trade single window"; yet it must facilitate the operation of the sector. However, by doing so, the current system of post-shipment declaration will immediately be changed to pre-shipment clearance. The sector reflects to me that there are indeed many operational difficulties. The FHKI and I are worried that the new system may substantially hamper the flexibility of the industrial sector and the logistics industry. While the sector may have to replace a new information technology system, they are uncertain whether the system can operate around the clock. My concern is that if the consultation is not well conducted, the cargo services industry of Hong Kong may be replaced by our neighbours ― not just shipping but also air freight services, which is also very important to Hong Kong. By then, we shall be losing our leading position as a shipping and logistics centre. Thus, I hope the Government would fully consult the sector and stakeholders, and would, after learning the actual operation of each aspect and giving careful consideration, formulate specific implementation details. Only by doing so can efficiency and cost reduction of the new operation system be ensured without affecting current operation, so as to promote trade facilitation.

President, as Hong Kong is an externally-oriented economy, the Mainland and global economic environment will have great impacts on us. In the face of the uncertain global economic prospect and various current challenges, the SAR Government must not take the situation lightly. Instead, it must exercise fiscal prudence, take precautions and invest in the future. In paragraphs 39 to 42 of the Budget, the Financial Secretary mentions a "new economic order". According to him, with the global economic gravity shifting towards the East, emerging markets are playing a much more important and influential role, and coupled with breakthroughs in IT development, the two forces have gradually LEGISLATIVE COUNCIL ─ 13 April 2016 7283 shaped a "new economic order" globally, offering new directions and providing room for developments for both traditional and emerging industries. They have also lowered the threshold for start-ups and created a more open market ecosystem. These ground-breaking paradigm shifts have disrupted the conventional modalities. Subsequently, the Financial Secretary elaborated at the Finance Committee and the press meeting that the sector has in fact already been aware of this new economic order, which includes the application of new technology, new materials and new mode of business. He also stated clearly that the future development should be steered and led by the sector. I hope the entire SAR Government will think alike as the Financial Secretary and trust the sector. I also hope that they would adopt a more open and accommodating attitude to listen to the views of the sector, take our suggestions with a longer perspective and an innovative mindset, so as to act swiftly, get prepared, identify development opportunities and position Hong Kong as a key player in the competition.

President, filibustering in Budget debates has become a norm in recent years. This year, some 2 000 amendments have been put forward. This year, the Financial Secretary has proposed many initiatives conducive to people's livelihood and the economy, members of the public as well as the commercial and industrial sectors thus hope that such initiatives can be implemented expeditiously. For the well-being of 7 million citizens, SMEs, as well as the hardworking lower and middle classes, I urge those filibustering Members to stop filibustering and pass the Budget as soon as possible.

With these remarks, President, I support the Appropriation Bill 2016.

DR KENNETH CHAN (in Cantonese): President, recently many Secondary Six students who sat for the Hong Kong Diploma of Secondary Education Examination have been very worried; they are particularly concerned about the subject of Liberal Studies. The examination in this subject, which was finished last week, has sparked heated discussions in society. Dr Priscilla LEUNG, who belongs to the same political party as Mr Andrew LEUNG who has just spoken, has furiously criticized the Liberal Studies examination paper for once again containing a political question, which is ridiculous in her opinion.

Regarding the aforesaid controversial examination question, students were asked to analyse the relationship between an increased representativeness of the electoral methods for Hong Kong's executive authorities and legislature and the 7284 LEGISLATIVE COUNCIL ─ 13 April 2016 global competitiveness of Hong Kong as a whole. If we look at this ninth Budget Speech delivered by the Financial Secretary, we will find that he considers the two to be inextricably linked. In paragraph 8 of the Budget Speech, the Financial Secretary says, and I quote, "Politics and economics are closely intertwined. Political volatility will unavoidably impact on our economy." In paragraph 10 of the Budget Speech, he further states, and I quote, "The Government should also continue to fortify the economic foundation of Hong Kong, promote diversity, and channel public resources towards improving people's livelihood and supporting the disadvantaged. All sectors should have a fair chance in sharing the fruits of our economic success, and everyone in Hong Kong, regardless of age, gender and race, should be able to unleash their potential and lead a better life through hard work."

If we chew over the contents of these paragraphs, we will know that the political situation and, particularly, the governance system of a place are closely bound up with the economic development of the place. In particular, when we are faced with a situation where the global economy is changing for the worse under the pressure of a global economic downturn as often mentioned by many Honourable colleagues, how should we address these challenges? How can we alleviate people's hardship? How can we remove barriers and lift restrictions for small and medium enterprises? How can we enable Hong Kong people from different backgrounds in all social strata to feel that the Government is helping them? Or, how can we enable them to understand that the Financial Secretary's financial management concept as shown in the two paragraphs quoted by me just now must be applied consistently to the Government's different policy areas, and must not be just empty talk or sweet talk?

Many Hong Kong political observers and members of the public are of the opinion that this Government … people have really suffered a lot because of LEUNG Chun-ying's governance over the past few years. So, sometimes, when a government official comes forward and says something humane, such as the two paragraphs quoted by me just now, people will feel relieved or even sing the praises of the official. Perhaps the yardstick we use for comparison is indeed too low; as long as one of the Secretaries of Departments or a principal official says something rather pleasant to the ear, we will be somewhat pacified and thus adjust our expectations. Some Honourable colleagues have even further asked the Financial Secretary if he has started to form a governing team, as it is also a very important issue. According to Chief Secretary Carrie LAM, she only saw the photos of some of the officials in the current governing team when the team LEGISLATIVE COUNCIL ─ 13 April 2016 7285 was formed, which goes to show that the current governing team is essentially a "ragtag army". That was how LEUNG's governing team was formed to rule Hong Kong, or, in my view, to ruin Hong Kong. It has been over four years since then. This is really terrible.

However, this is not only merely a matter of the person in question. If we think that we can make the world much better just by simply replacing a person, we will be too native and too silly indeed. How can the Financial Secretary's financial management concept be put into practice, so that Hong Kong people can feel that they are treated in a fair and just way? If the current political system and electoral methods for the Chief Executive and Legislative Council Members still keep creating selective listening, arousing distrust, and a sense of increasing alienation among the public, so much so that not only the Government but also the legislature will no longer belong to Hong Kong people, I believe the Government will hardly be able to forge consensus, engage the public, or convince people under the pressure of an economic downturn to remain steadfast in their respective posts and duties, grit their teeth, and seek common ground in dealing with all sorts of naturally different views and disagreements among them on economic resources or even governance concepts. As long as the small-circle Chief Executive election still exists, or if the electoral method with a candidate screening mechanism under the 31 August Decision of the Standing Committee of the National People's Congress is implemented, I believe many Hong Kong people still find that unacceptable, as that is a great torment to them.

I have a personal experience to share with you all. During the election period of one of the Chief Executive elections, I attended a meeting at which I saw some tycoons, major businessmen and bosses of large consortia blatantly ask the Government to do them favours. One of them asked the Government when it would open a new road from a certain location to another location for him, saying that he had bought a piece of land at that other location awaiting development, and hoped the Government would get it done for him so that he could sell plots and buildings to make profits. Such a practice arouses suspicion of abuse of power for personal gains, and even makes people feel that "who you know is more important than what you know". The recent "airport luggage incident" is a case in point. The public have endured problems reflected in incidents of this sort for 18 years, almost 19 years, since Hong Kong's return to China, and their patience and hopes are all gone. What is more, the Government has enormous resources at the moment. These resources were passed on to us by people of the past few generations, but now they have fallen into the hands of 7286 LEGISLATIVE COUNCIL ─ 13 April 2016 those whom you and I consider to be mediocre officials or mediocrities, to put it frankly. One cannot help but question whether it is worth spending so much money on hiring these accountability officials.

Take education, for example. Education accounts for the largest share of public spending, but the popularity, performance and quality of the Secretary for Education are totally below par in the eyes of members of our education sector, as well as the general public, parents and students. On one occasions, some parents and students only intended to give him a letter of petition, but he ignored them, sat in his car with his legs crossed, closed the car windows, and pressed the keys on his cell phone to handle what he called his "official business". This Government often finds itself confronted with wave upon wave of scandals; how can it gain the people's trust? No matter how good the Financial Secretary's intentions or how kind his wishes are, and even if he wants to properly do his part to the best of his ability in amassing or even creating wealth for Hong Kong, and achieving a fair and just distribution of public resources for Hong Kong, at the end of the day, the sense of alienation from this Government among the public will not be ameliorated in any way, and there will not be any breakthrough in improving people's feeling for this place, their sense of belonging to this place, or their confidence in officials and public policies.

In paragraph 176 of the Budget Speech, the Financial Secretary has quoted a famous remark made by former United States President KENNEDY during the Cold War era, and that is: "Our problems are man-made, therefore they can be solved by man." He has also made the following appeal: "As long as everyone is willing to set aside short-term political considerations in favour of the long-term overall interests of Hong Kong, we shall have a chance to return to rationality. It is a long journey. We must be patient and persevere in helping our community to heal, one step at a time." I disagree with him in that he seems to be asking people not to think too much, but to simply look ahead, focus on long-term interests and set aside short-term political considerations. If, before Hong Kong's return to China, when I was still in my late teens or early twenties, you said to me, "Kenneth CHAN, with the handover in 1997 approaching, we have a vision of Hong Kong people ruling Hong Kong by democratic means in the future; we must have tenacity, patience and perseverance, and be mindful of the long-term interests of Hong Kong," I would still have hope back then. But if you say these words to young people today … According to public opinion polls and my personal contacts with them ― I teach at university every day and have a LEGISLATIVE COUNCIL ─ 13 April 2016 7287 lot of chances to talk with them. I note that they feel disappointed and hopeless. They think that Hong Kong does not belong to them, and that the officials look increasingly unfamiliar. If you say these words to them, you are really wasting your breath, and you should consider yourself respected by them if they do not tell you off with foul language.

Honestly, what is the point of asking people to focus on long-term interests and set aside short-term political considerations? The thing is, the Government cannot irresponsibly ask people not to look at things happening before their eyes. Should Members wear binoculars at Council meetings? Should Members look through binoculars in the Chamber and say: "things in 2047 and beyond are so wonderful; let us put aside what is happening now"? I do not think this is what he means. How can today's acute social conflicts and governance problems be alleviated and resolved? It seems that the Financial Secretary, as a member of the LEUNG Chun-ying Administration, has actually failed to impress us with any outstanding qualities other than his verbal tricks, glib talk and honeyed words. There is no way that these problems plaguing Hong Kong can be readily solved by a "financial controller" who simply seeks to adjust his financial techniques or the distribution of financial resources, and to address the deep-rooted conflicts in Hong Kong with some conventional leverage tactics.

Traditionally, the Financial Secretary's Budget Speech itself is in fact a manifestation of governance concepts. This year's Budget Speech imparts some concepts which sound quite agreeable, but how can these concepts be realized? It appears that people do not think that these can be realized. What is even more discouraging, disappointing and disheartening is that the funds appropriated will fall into the hands of the Secretaries of Departments and Directors of Bureaux. Our feelings about Hong Kong … China-Hong Kong integration, which has been vigorously promoted in recent years, has made many members of the public feel that the local bureaucratic culture has become increasingly unfamiliar to them. We demand that Hong Kong people be treated fairly, but the see-saw battle over universal retirement protection, which has been in dispute for many years, is still ongoing. We want improvements in people's quality of life, but the "blind grabbing of land" by the Government has made many local communities feel that space is ever-decreasing while pressure is ever-increasing. Hong Kong lacks a governance system and a convincing approach which can make people feel that apart from housing construction, there are some relatively harmonious ways to iron out various social conflicts.

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Let us look at our education system. I think many Honourable colleagues are opposed to the allocation of $1 billion in the Budget for attracting students from Indonesia to Hong Kong under the Hong Kong Scholarship for Belt and Road Students. This initiative should not have aroused such a big controversy, so why has it become a bomb? At the beginning of my speech, I mentioned Secondary Six students. Each year, 13 000 Secondary Six students whose examination results are good enough to earn them subsidized university places are denied the chance to go to university because the Government is unwilling to allocate additional resources for higher education. The Government has merely proposed that they should enrol in self-financing degree programmes or associate degree programmes, or that they should go to study on the Mainland with their tuition fees charged to the public purse. In doing so, the Government is trying to shift pressure away as if it were draining floodwater away.

In this regard, the Government is being unfair and has done a disservice to many industrious students who, despite meeting the minimum entry requirements after getting through numerous examinations over the years, are denied access to university education by reason of a decision on public resources. How can they be convinced? My colleagues have certainly thundered and raged against this. The Government's explanation is that the $1 billion is only an injection into the scholarship fund, from which a small amount is to be allocated for the provision of several additional offers under the scholarship, so it is not a problem. This is exactly the problem: the Government does not know where the problem lies; we have talked about it for so many years, but the Government still does not get it. Moreover, given the recent rash of unfortunate political incidents, such as the LEE Po incident and the funding problems concerning major cross-boundary infrastructure projects like the Express Rail Link, it is difficult for the public to focus only on long-term interests and set aside short-term considerations. Every day we do our damnedest to urge the Government to allocate additional resources for making a good job of education, but the Government has never given any positive response in respect of this issue, while some Members have continued to press buttons to approve those projects with cost overruns.

Therefore, I do not believe that our social conflicts can be treated positively by the Government or the Financial Secretary in such a simple way. It can be said that Hong Kong is deeply enmeshed in a governance crisis. The clashes in the streets of Mong Kok on the day following Lunar New Year's Day this year underscored the conflicts between the Government and the people, and gave rise to more and more China-Hong Kong conflicts. Under the circumstances, we LEGISLATIVE COUNCIL ─ 13 April 2016 7289 really do not see any hope, any way out, or any prospect. Furthermore, I do not want the Financial Secretary to merely play verbal tricks by asking people to take the long view, saying that they will see beautiful scenery after climbing over the mountain. President, if he really wants to lead us over the mountain to see beautiful scenery, he has only one option, and that is to leave this Government, spell out his governance concepts, form his own governing team, and strive for genuine universal suffrage and good governance for Hong Kong people with no holds barred.

I so submit.

MR CHAN KAM-LAM (in Cantonese): President, despite a substantial reduction in fiscal surplus, the Budget this year still proposes taxation and short-term relief measures costing $38.8 billion to benefit all strata of society, particularly the middle-class. This is worthy of our support. It is even more commendable that the Budget proposes to inject more resources in promoting innovative technologies for the long-term development of Hong Kong, which has been the demand of the Democratic Alliance for the Betterment and Progress of Hong Kong (DAB) for many years. We expect that with the establishment of the Innovation and Technology Bureau, the Government will continue to make steadfast efforts in promoting innovation and technology to lay a solid foundation for the future of the Hong Kong economy.

However, despite the proactive efforts of the Government to promote economic development, we are not completely optimistic about the prospects of the Hong Kong economy. The year 2016 is full of challenges for our economy. With the worsening of the external economic environment and a continuous decline in demand, it is predicted that global trade performance will be even worse than that in 2015. At present, there is a continuous downturn in trade, tourism and the retail industries. Retail sales in February have dropped drastically in value by more than 20%, which is the lowest figure recorded since January 1999. For the first two months of this year, the greatest drop in the total number of inbound tourists was recorded at 14% and the number of Mainland tourists has even dropped by 18%. Moreover, property prices in Hong Kong have fallen by more than 10% since the fourth quarter of last year. If the downturn of the economy intensifies, I believe the unemployment rate in Hong Kong will surely be on the rise.

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Recently, there is more negative news about Hong Kong which is worrying. According to the Global Financial Centres Index compiled by the Z/Yen Group of the City of London, Hong Kong's latest ranking fell from the third to the fourth and its original place was taken by Singapore. Once again Hong Kong has failed to be ranked among the top three since 2009.

Moreover, two credit rating agencies, Moody's and Standard & Poor's announced in March this year one after another that their outlook on the credit rating of Hong Kong has been revised from "stable" to "negative". This is also the first time that the outlook on the credit rating of Hong Kong has been downgraded to "negative" since 1998. Standard & Poor's particularly mentioned that if the political polarization of Hong Kong worsened to a point where it compromised policy-making, it might continue to downgrade its rating on Hong Kong without a downgrade of China. The downgrade on Hong Kong by credit rating agencies will probably create financing difficulties for small and medium enterprises. In recent years, political disputes in Hong Kong have intensified and worsened and there are even voices of separatism demanding for the establishment of an independence party. These developments have started to pose serious threats to the economy, overall business environment and external competitiveness of Hong Kong. Since there is increasing pressure of slackening economic growth, if, in the next few months, there are no signs of improvement in our economy, or if there are signs showing that our economy will be shrinking, the DAB thinks that the SAR Government should introduce a new round of measures to stimulate the economy and provide more support for individual trades and industries.

In fact, the two credit rating agencies mentioned above also have a pessimistic outlook on the Chinese economy and so they have downgraded the outlook ranking on China as well. On the whole, the Mainland is still facing great pressure of an economic downturn and the prospect in the medium term is uncertain. At present, the operation of the Chinese economy has entered the "deep end" of reform, or a stage of track-changing with uncertainties. Hence, it has to rely on its established systems to prevent the economy from quickly losing balance when there is a reduction of speed. With a reduction of economic momentum from the Mainland, the economic prospect for Hong Kong will turn from bad to worse. Some people have suggested that Hong Kong should free itself from the influence of the economic downturn of the Mainland as far as possible. It can be said that these people do not understand the economic and political situations of Hong Kong. They have simple-mindedly thought that the LEGISLATIVE COUNCIL ─ 13 April 2016 7291

Hong Kong economy is autonomous and self-reliant and it does not have to rely on the development of the Mainland. Just think, which one of the industries of Hong Kong, including finance, tourism, trading and logistics, does not have to rely on the support of the Mainland? The opposition camp objects to building the third runway at the airport, the Hong Kong-Zhuhai-Macao Bridge, the Guangzhou-Shenzhen-Hong Kong Express Rail Link and the Liantang Boundary Control Point. Obviously, their objective is to reduce or hinder communication between Hong Kong and the Mainland, thinking that marginalizing Hong Kong will bring benefits to Hong Kong. In fact, they have ignored the future development of Hong Kong. We are using the money of the people of this generation to build infrastructure for the next generation, but members of the opposition camp have gone so far as to incite young people to object the proposals. Not only are they harming themselves, but also the others. When we met with some Singaporean friends recently, they asked derisively why Hong Kong people have become so foolish!

Furthermore, as public expenditure arising from the construction of public housing and an ageing population will be on the rise in future, the SAR Government should take early precautions in view of the huge financial commitment. Considering the overall economic situation at present, we foresee that government revenue, including proceeds from land sales, stamp duty and rates, will reduce in the next few years and there will be a lesser chance for the authorities to record a substantial surplus again. Hence, it is all the more important for the Government to use the fiscal reserve of $800 billion-plus appropriately.

President, implementing the strategy of innovation-driven development is the most important initiative in the National 13th Five-Year Plan. Therefore, as Hong Kong welcomes the shift of the global economic focus to the East and the new economic order shaped by revolutionary breakthroughs in information technology, vigorous promotion of development of innovative technologies, particularly by allocating more resources in research and development, is the way to reap development opportunities from the Mainland and the international world as well as to increase the economic competitiveness and the momentum for growth of Hong Kong.

The DAB considers that the SAR Government should establish a platform for research in innovation and technology to dovetail with the national strategy of innovation-driven development, so as to provide a good environment for Hong 7292 LEGISLATIVE COUNCIL ─ 13 April 2016

Kong enterprises and incoming Mainland enterprises to develop creative industries and conduct science and technology research. In addition, the Government should provide an international financing platform for innovative activities of the Mainland. In fact, under the development strategy of the Belt and Road Initiative or in implementing the strategy of innovation-driven development by China, the financial industry of Hong Kong has great competitive edges in providing multi-functional services and support, including financing in many forms through various channels, raising funds through listing and establishing all sorts of venture capital fund. Thus, Hong Kong can become an overseas financing services centre for innovative enterprises and organizations of the Mainland.

Moreover, Hong Kong can also assist Mainland innovative enterprises to "go global" by providing services in acquisition of foreign companies, asset management, technology introduction and improvement of corporate management, as well as financial and legal support services, and so on. This will enable Hong Kong to become a regional or even an international hub in managing innovative and technology enterprises and providing services to Mainland innovative enterprises.

I am pleased to note that the Government is vigorously promoting financial technologies (Fintech) and the Hong Kong Monetary Authority (HKMA) has also established the Fintech Facilitation Office. To facilitate Hong Kong in participating in the Belt and Road Initiative, the HKMA is gearing up to set up the Infrastructure Financing Facilitation Office to pool the efforts of investors, banks and the financial sector to facilitate investment in infrastructure projects in countries along the Belt and Road routes. It is expected that the Administration will continue to play a proactive role in promoting the development of industries.

President, as we often said in the past, while Hong Kong is falling, our neighbouring cities are rising. By comparison, the competitiveness of Hong Kong has weakened and it can even be said that Hong Kong has been surpassed.

Mr ZHU Rongji, former Premier of China, criticized the Hong Kong Government for "holding discussions without making decisions, and taking no action after a decision is made". It seems that this comment is still applicable today after 10-odd years. The situation has even become worse because the opposition camp has been unco-operative and opposes for opposition's sake. Consider the example of the Innovation and Technology Bureau. Although the LEGISLATIVE COUNCIL ─ 13 April 2016 7293

Government was determined to promote the innovation and technology industry and the industry also supported the proposed establishment of the Bureau, the proposal had been stalled for three years before the Bureau was finally established. By hindering the Government from implementing its policies through filibustering, the opposition camp is actually hindering the development of Hong Kong. It is really difficult for Hong Kong to take even a small step forward in its economic development.

With the unprecedented economic challenges faced by Hong Kong, we should stand united to meet challenges, promote economic development and improve the livelihood of the people. Nonetheless, in the past few years, Hong Kong has turned quickly from a dynamic economic city to a totally political city. Social attention and resources have been wasted in political disputes. As Hong Kong people have become tired of political disputes and perplexed about the future of Hong Kong, the momentum within Hong Kong has been reduced.

The radical groups only seek to destroy but not construct. Back then, members of these groups "kicked suitcases" of visitors and staged "shopping tour" protests against parallel goods smugglers. At present, parallel goods smuggling is still active, yet tourism and the retail industries are experiencing a bleak winter. The general market situation is even worse than the time during SARS, with the retail, hotel and catering industries, which together provide employment to 40% of all employees in the private market, bearing the brunt. All the opposition camp cares is staging a good show, paying no heed to the consequences or the fact that it is easy to drive visitors away but difficult to attract them back. If we let politics override economic development and people's livelihood, the grassroots will be the ones who suffer as a result.

Hong Kong has become a financial centre and a world economic city because it is safe, liberal and hospitable; and its reputation has been built up over the years. The act of driving visitors away or worse still, the occurrence of riots will make people feel that Hong Kong is no longer safe and it has become unstable and violent. In the past two years, whenever Hong Kong was reported in the international media, it was bad news. It is not hard to imagine that the international world may have changed their impression about Hong Kong. Investors may lose confidence in Hong Kong, their incentive to invest here may be dampened or they may even withdraw their investment. As political disputes intensify, Hong Kong is being drained by both internal and external forces.

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At present, pseudo-localism is rising to prominence and with excessive propaganda of "Hong Kong independence", the world is more uncertain about the future of Hong Kong. As Prof Francis LUI of the Department of Economics of The Hong Kong University of Science and Technology said, "If Hong Kong becomes independent; China cannot help but treat Hong Kong as an enemy. The advantage of Hong Kong relies on its geographical proximity with China. If Hong Kong becomes independent, these advantages will vanish. Will investors have the courage to invest in an enemy of the most dynamic economy of the world?"

The current situation of Hong Kong is similar to the weather today. It is pouring with rain. A picture often pops up in my mind. Hong Kong is like a small boat on the brink of capsizing in a stormy sea. Hong Kong has been hit by various storms in the past, but every time Hong Kong can overcome the storm because all members of the public are united in vigorously rowing the boat forward. But now, a handful of people in the boat disregard unity and our tacit understanding. They only focus on making trouble, hyping up issues and demanding the captain to step down. How then can the boat move forward?

President, in terms of development, Hong Kong is now at the crossroad. Do we want to uphold the Hong Kong spirit to weather the storm and bravely charge forward, or do we want to keep on arguing and engaging in internal disputes and stall all progress? In the election of the Legislative Council in September this year and in the election of the Chief Executive at the beginning of next year, people can make rational choices.

President, I so submit.

MR ALAN LEONG (in Cantonese): President, having heard the speech made by Mr CHAN Kam-lam on behalf of the Democratic Alliance for the Betterment and Progress of Hong Kong (DAB), the two generations of young people in Hong Kong must be, I believe, totally disappointed with the DAB. The reason is that Mr CHAN has basically failed to examine why young people in Hong Kong seek to discuss "Hong Kong independence", and he merely suppressed such a trend of thought. Certainly, greater suppression results in greater outcry, and greater outcry implies that the "Hong Kong independence" ideology is being considered and even embraced by more and more young people. In fact, failing to learn from and reflect on past failures and make adjustments accordingly is the reason why the pro-establishment camp fails to win the support of young people. LEGISLATIVE COUNCIL ─ 13 April 2016 7295

In 2014, LEUNG Chun-ying held a book entitled Hong Kong Nationalism in his hand and castigated it in the Chamber. The book, barely known by the public at that time, was eventually reprinted four times. A similar example is ZHANG Xiaoming branding the Hong Kong National Party as treacherous in a programme of Phoenix TV. Consequently, Hong Kong people came to know about the Hong Kong National Party. Without such branding, who would be aware of the existence of the Hong Kong National Party? Not only Mr CHAN Kam-lam and the DAB fail to learn from and reflect on past experience and reposition their stance, the Financial Secretary also makes the same mistake. Therefore, the Civic Party finds it difficult to support this Budget.

President, compared with LEUNG Chun-ying's Policy Address, the Budget of John TSANG at least contains no provocative wording, and it has not mentioned the Belt and Road Initiative 44 times. The Budget is considered to be less annoying. In addition, apart from presenting a less annoying Budget, the Financial Secretary seemingly points out certain problems from the perspective of Hong Kong people, such issues are not mentioned in LEUNG Chun-ying's Policy Address. The Financial Secretary does enjoy a high approval rating, but the high level is relative. He may need to thank LEUNG Chun-ying for he often creates public relations disasters, which in turn reflects better public relations efforts made by John TSANG. Given his better public relations efforts, pleasant remarks, and even singing a few lines of Julie SU's song titled "With Love", no wonder Hong Kong people simply see the Financial Secretary as a clear drop of water from a muddy river. The Financial Secretary, I think, should not be complacent. If hearsay in the community is true that he really wants to run for the Chief Executive, he still needs to make a lot of efforts. He should neither be content with the status quo nor think too highly of himself.

President, what are the inadequacies of the Budget? I would like to talk about several points. This is the ninth Budget presented by the Financial Secretary during his term of office. When each of the past eight Budgets was delivered, the Civic Party invariably criticized the Financial Secretary for being a miser, not just an ordinary miser, but one that had neglected his duty. That said, he still has not made any improvement this year. President, as you may probably remember, when John TSANG expounded on the budget following its release last year, a reporter asked him about the appropriate level of fiscal reserves, and he said the higher the better. This attitude is very strange. Hong Kong now sits on a fiscal reserve of about $1 trillion, part of which is disposable, part of which is not. I have no knowledge of the computation methods as the Government often gives different exposition. Nevertheless, our fiscal reserves 7296 LEGISLATIVE COUNCIL ─ 13 April 2016 are so abundant that other countries in the international community are green with envy. Strangely, however, the Financial Secretary refuses to put such reserves to use. For an individual, frugality is a virtue that should be encouraged, but when it comes to the Financial Secretary, public coffers are not his private savings; they belong to the President, to me and to all other people of Hong Kong. He should consider how, when and where the money should be spent, as well as the amount to be spent, so as to serve the best interests of Hong Kong in the short, medium and long run. If he acts miserly and treats public coffers as his private savings, trying to save as much as possible, he is not discharging the proper duty of a competent Financial Secretary.

To put it simply, I think Hong Kong at least faces the following problems that plague Hong Kong people. The first problem is lack of financial support for the elderly. I believe the President knows too well, at present, thousands of elderly persons in Hong Kong passed away every year while waiting for places in subsidized residential care homes for the elderly. In such a prosperous community as Hong Kong, this situation should not have occurred.

The second problem I would like to raise is also of particular concern to parents, and that is, nowadays children are unable to have a happy childhood and to learn happily. We spend tens of billions of dollars on education each year, but what about the effect? Can the Budget propose certain measures that delight us, provide the elderly with financial support, and enable small children to learn happily and have a happy childhood? The third problem is public healthcare. Our public healthcare system is now on the brink of collapse. The situation of influenza patients cramming into the accident and emergency departments of certain hospitals recently is a good case in point.

In addition, there is a lack of diversification of industries in Hong Kong. As pointed out by Mr CHAN Kam-lam just now, we rely on the Mainland in almost all areas. That is exactly where the problem lies, yet Mr CHAN seems complacent. In the past, Hong Kong was an international city with wide perspective, but now it merely focuses on one direction ― the north. According to many analyses, Hong Kong will be seriously affected should any problems befall the Mainland economy. Hong Kong needs to develop some other alternative industries, such as cultural and creative industries, with which I am familiar, and in which there is untapped potential. However, regarding how to lead Hong Kong people to leverage on the Mainland while going global, the Government lacks a clear exposition.

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President, recently you must have heard of a problem that is related to people's livelihood. Following the renaming of The Link REIT to Link REIT, small business owners have been driven away, community shops have been forced to close down successively, and even a voluntary offer of 40% rental increase made by a supermarket has been rejected by Link REIT, which has in turn insisted on leasing the relevant premises to chain stores of big businesses. In fact, all these have a direct bearing on people's livelihood. Thorny issues may not be solved instantly, may I ask John TSANG whether he can allocate more funding to the Hong Kong Housing Authority (HA), so that the HA can expedite the refurbishment of shopping centres under its administration to compete against the shopping centres under Link REIT? Following the renaming of The Link REIT to Link REIT, it has outsourced the administration rights and sold shopping centres. According to press reports the day before yesterday, Link REIT has sold 10 shopping centres at a price of $700 million. In fact, is the Financial Secretary in the know? Theoretically, matters relating to Link REIT fall within his remit. In response to the selling of shopping centres by Link REIT, the Government should at least buy back some shopping centres, if not all, so as to be accountable to Hong Kong people to some extent. As Link REIT has already sold some 10 shopping centres and continues to sell more, how come the Financial Secretary seems to be kept in the dark and knows nothing about it?

I have, in one go, listed six or seven problems that have plaguing Hong Kong people, but I fail to see that the Financial Secretary has appropriately allocated resources to address the problems. President, following the release of the Budget by the Financial Secretary, I have pointed out that he is very generous towards "white elephant" infrastructure projects, someone even say that he is funding Mainland construction companies like China State Construction or Mainland-invested construction projects, but he is miserly towards the grassroots in Hong Kong. He often indicates that localism may not be bad. He is the first to claim in his blog last December that our deep feelings towards to Hong Kong can be united to become a positive and constructive force; and such feelings should not become a closed, negative and even destructive form of protectionism.

Financial Secretary John TSANG seems to take localism in a rather positive light, but I have just now pointed out some local issues. For example, some people advocate the Lion Rock spirit among young people, saying that the older generation also worked hard 30 years ago and they succeeded. However, can the Lion Rock spirit be adhered to as it was 30 years ago? Nowadays university places are insufficient, and university graduates almost earn as much as 7298 LEGISLATIVE COUNCIL ─ 13 April 2016 those graduates 30 years ago, yet the purchasing power of our currency has dropped significantly. It is also not easy for university graduates to land a job either, senior positions in investment banks have all been taken up by Mainland returnees. Why does the Financial Secretary not consider all these problems? Members such as Mr CHAN Kam-lam even made a political statement just now, accusing young people of being thoughtless and stirring up troubles. Their thinking is poles apart from those of the young generation.

President, I would like to conclude my remarks. The Financial Secretary refers to the words of President KENNEDY during the cold war: "Our problems are man-made, therefore they can be solved by man." However, I would like to ask the Financial Secretary to chew over another statement made by President KENNEDY: "Those who look only to the past or present are certain to miss the future." If Financial Secretary John TSANG intends to run for the Chief Executive, I hope he will keep up with the times; do not linger on the past or the present. Being complacent is inadvisable.

I so submit.

MR TAM YIU-CHUNG (in Cantonese): President, the Democratic Alliance for the Betterment and Progress of Hong Kong (DAB) has always worked according to the principle of "calling a spade a spade". When it comes to matters of principle in politics, the DAB must make our stance even clearer.

In his speech a moment ago, Mr Alan LEONG criticized Mr CHAN Kam-lam for making remarks intended to suppress the idea of "Hong Kong independence". In Mr LEONG's view, the more Mr CHAN talked against "Hong Kong independence", the more popular the idea became. Hence he suggested that we should reflect on the matter and learn from the experience. However, "Hong Kong independence" is in fact poisoning Hong Kong and will lead to a dead end. From what I heard in his speech, Mr LEONG is also against the idea.

Therefore, Ms Starry LEE, Chairman of the DAB, has already made this point clear in her speech this morning. If we do not say it loud and clear, some groups or their members might continue to spread the idea. Of course, for those young people who have been misled, we will do our best to counsel and convince them with patience. But, surely, we will strongly criticize and condemn those LEGISLATIVE COUNCIL ─ 13 April 2016 7299 people or organizations which publicize, promote and advocate "Hong Kong independence" intentionally because such an idea will poison Hong Kong and undermine our future development.

Back to this year's Budget. Its coverage is quite comprehensive. Apart from setting out the direction and measures to promote economic development, it also contains various relief measures to benefit all sectors in society including the middle class.

At present, Hong Kong's economic prospects are worrying. As pointed out by the Financial Secretary, when the external environment deteriorates, Hong Kong is at risk of an economic recession. Once there is an economic downturn, Hong Kong's public finance will surely be put under intense pressures. In the past few years, the Government managed to accumulate a huge fiscal surplus. Hence, provisions can be set aside for public housing construction, healthcare reform and retirement protection. Moreover, the Future Fund is established as a long-term investment strategy. This approach of saving for a rainy day is commendable.

In as early as 1997, due to Hong Kong's reunification, the Government intended to merge the originally independent Land Fund into the fiscal reserves. At that time, the DAB proposed legislative amendments to convert the Land Fund into a livelihood fund so as to provide an additional source of funds to improve livelihood services. The present initiatives of the Government to set aside provisions for livelihood services and to transfer the Land Fund into the Future Fund are exactly the requests we made back then. In our view, the Government should further widen and deepen the scope of its initiative to set aside provisions for livelihood services in the future.

In recent years, the Government's recurrent expenditure has been increasing; in particular, the recurrent expenditure on livelihood services has increased substantially. For instance, the recurrent expenditures on education, social welfare and healthcare this year amount to $7.5 billion, $6.6 billion and $5.7 billion respectively, representing an increase of 67%, 106% and 90% when compared with those 10 years ago. Evidently, there is a huge demand for livelihood services. In times of economic downturn, it will be difficult for the Government to keep increasing the recurrent provisions on these policy areas. As a result, people's livelihood will be affected seriously.

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According to the current practice of the Government in preparing the budget, an expenditure ceiling is set each year, and various government departments must compete for the limited resources. This approach has resulted in a lack of longer-term planning among government departments. In years of more robust finances, the departments can do more; in years of tighter finances with less funding, the departments will do less. In my opinion, such an approach can hardly meet the demand of various long-term public services. Moreover, another serious shortcoming is that the departments cannot plan ahead, and hence some initiatives cannot be implemented due to inadequate preparation. As a result, even if money is available, it cannot be spent in areas that have urgent needs.

In view of the rapidly ageing population, the DAB considers it imperative for the Government to set aside funding provisions for elderly services. We suggest that an Elderly Care Service Fund be set up with at least $10 billion. In tandem, the Government should formulate a five-year and 10-year plan for elderly services, so as to ensure better medium- and long-term planning for the construction of additional residential care homes for the elderly as well as the expansion of community care services, thereby effectively shortening the waiting time of such services.

Regarding healthcare services, the serious problems of difficulty in getting medical treatment, long waiting period and shortage of hospital beds are equally serious. In Hong Kong, there is a shortage of hospital beds in various public hospitals, resulting in extremely high occupancy rates. In the New Territories East and New Territories West Clusters, which have relatively less healthcare resources, the year-round occupancy rate of general hospital beds is as high as 103%. During the peak influenza season last month, the overall occupancy rate of medical wards in Hong Kong was as high as 118%, and it was common for patients to sleep in temporary beds in the corridors in public hospitals. Given the acute shortage of hospital beds, elderly patients are compelled to leave hospitals after receiving treatment. Yet they have difficulty in finding suitable carer services in the community. I feel deeply for the suffering of elderly patients who cannot obtain carer services after being discharged from hospital. In the past 10-odd years, the number of hospital beds in Hong Kong has all along been maintained at 31 000, but the number of elderly persons has doubled. In the next 14 years, it is expected that the number of elderly persons will double again. Hence, the provision of healthcare infrastructure is imminent. I hope the various hospital projects proposed by the Government, as well as the plan to LEGISLATIVE COUNCIL ─ 13 April 2016 7301 increase 2 800 hospital beds in the next 10 years can be completed as soon as possible. Again I would like to call on opposition Members to stop filibustering, so that these hospital projects can be taken forward expeditiously.

In this year's Budget, there are fewer commitments towards elderly welfare. At present, elderly persons at the age of 65 are not entitled to other benefits, except for the $2 concessionary fare. Hence, many elderly persons at the age of 65 have relayed to us the view whether they could enjoy other benefits now, instead of having to wait till they reach 70. In this connection, the DAB requests the Government to lower the age requirement of the Elderly Healthcare Voucher Scheme to 65 as soon as possible, and to abolish the income and assets requirements of the normal Old Age Allowance, so that all elders at the age of 65 can apply for the allowance right away. Furthermore, the Government should consider relaxing the asset limit of the Old Age Living Allowance and increase the amount of subsidy to $3,200 per month, so that more needy elders can benefit.

Next, I would like to talk about the disposal of public assets and the protection of public interest. In the past, as a result of budget deficits, the SAR Government implemented various austerity measures and divested Government assets, including the privatization of the MTR Corporation Limited (MTRCL) in 2000, and the divestment of the commercial assets of the Hong Kong Housing Authority (HA) such as markets, shopping centres and carparks to The Link Management Limited (The LINK) (now renamed as "Link Asset Management Limited (the Link)") in 2005.

To be fair, at the advent of the new millennium, Hong Kong was beset by adverse economic conditions, so much so that the SAR Government was running budget deficits for successive years. Had the SAR Government not divested part of its assets back then, it would not be possible to maintain the existing level of public services, let alone enhance the services. In particular, the HA was facing a huge deficit at that time. Had its commercial assets not been divested, the HA could hardly continue to build public housing. Nonetheless, after the SAR Government divested the assets, it failed to introduce suitable measures to cater for the changing circumstances in society and hence resulting in many adverse impacts.

After the Government divested the commercial assets of the HA to The LINK in 2005, The LINK refurbished the relevant commercial facilities and enhanced their management. Yet The LINK kept increasing the rental on the 7302 LEGISLATIVE COUNCIL ─ 13 April 2016 pretext of refurbishment, so much so that many small operators were forced to move out. After The LINK changed its name to the Link, it took a step further and contracted out the management right of its markets (such as Cheung Fat Estate Market in Tsing Yi), as well as divested car parking facilities. All these actions have further undermined the interests of extant small operators or local residents of housing estates in question, giving rise to serious complaints. Seemingly, the SAR Government can do nothing to resolve the problem.

Separately, after the merger of the MTR Corporation Limited and the Kowloon-Canton Railway Corporation in 2007, the new MTRCL reached an agreement with the Government to introduce a fare adjustment mechanism (FAM) that allows fares to go upward and downward. As the FAM only takes into account changes in the Composite Consumer Price Index and Nominal Wage Index, the MTRCL could still increase fares in recent years despite its huge profits. Hence, the FAM has been criticized by the public as a mechanism that only allows fares to go upward but not downward. Hence, there is overwhelming public opinion that the SAR Government should buy back the Link and the MTRCL. But should the Government buy back the Link and the MTRCL, their share prices might shoot up. As a result, it might incur a huge waste of public funds, which is not cost-effective at all.

Faced with the situation, the SAR Government should introduce specific remedial measures. For instance, it should conduct a comprehensive review on the MTRCL's FAM. In areas only served by markets, carparks and shopping centres under the Link, the Government should provide livelihood commercial facilities such as markets and carparks under its own management, so as to introduce competition suitably, while relieving the public's livelihood burden.

At present, the Government has asked the MTRCL to review the FAM at an earlier time, which is welcomed by the DAB. We hope that under the FAM, a fare stabilization fund will be set up with part of the MTRCL's annual profits, so as to obviate the need for fare increases when the MTRCL is earning huge profits.

In the review of the FAM, we hope that the Government will also review the fare structure of (WRL). At present, the fare level of WRL is almost double that of East Rail Line (ERL). For example, the fare from Hung Hom to Siu Hong is $20.6 by Octopus, which is $10.7 higher than the fare of $9.9 from Hung Hom to Sheung Shui. Compared with ERL, WRL runs less frequently, operates with fewer train cars and provides a lower level of service. LEGISLATIVE COUNCIL ─ 13 April 2016 7303

Yet its fare level is much higher than ERL. It is absolutely unfair to set these fares, and the SAR Government is duty-bound to request the MTRCL to narrow the difference between the fares of WRL and ERL.

To ensure the SAR Government's fiscal stability and robustness, the Financial Secretary has introduced a special initiative in this year's Budget, namely, the Development Bureau is asked to establish a multi-disciplinary office to review the guidelines on future public works projects, so as to avoid the recurrence of serious cost overruns in infrastructure projects and control public expenditure.

In the past few years, there are serious cost overruns in a number of major infrastructure projects, including transport infrastructure such as the Guangzhou-Shenzhen-Hong Kong Express Rail Link, the Shatin to Central Link, the construction of the Liantang Boundary Control Point and the Hong Kong-Zhuhai-Macao Bridge, as well as livelihood infrastructure such as the West Kowloon Cultural District and Phase 2 Redevelopment of Caritas Medical Centre. Reasons for serious cost overruns in major infrastructure projects include worse-than-expected ground conditions, revisions of project design, escalating material and labour costs, and so on. The occurrence of cost overruns in public works projects one after another not only increases public expenditure and the Government's burden, but also arouses queries and criticisms in the community at large. Besides, the pan-democratic camp has labelled such works as "white elephant" projects or the Government as a "big spender", in order to justify their attacks on the SAR Government as well as filibustering. Meanwhile, additional funding applications for infrastructure projects were blocked by the filibustering of the pan-democratic camp, causing further delay of the projects and increasing the construction costs.

Therefore, although the proposal to set up the multi-disciplinary office comes a little late and smacks of "mending the fold after a sheep is lost", we still hope that it can review the matter comprehensively. When it comes to avoiding cost overruns effectively, I think there are a few areas which merit special attention, namely, advanced work should be conducted more carefully and in greater detail to avoid the need for constant changes during the construction stage; project design should aim at being practical, tasteful and aesthetic, rather than overwhelmingly complicated or fanciful. If the design is too fanciful, it may create difficulties during the construction stage or incur extra costs. The situation would become difficult if delays or cost overruns are created as a result. 7304 LEGISLATIVE COUNCIL ─ 13 April 2016

Separately, we hope the Government can pay attention to the need to suitably regulate the quantity of infrastructure projects. Otherwise, as the engineering sector has mentioned repeatedly, industry players can make big money at one time, but they are out of work at another time. This dilemma should be changed.

MR JAMES TIEN (in Cantonese): President, the 2016-2017 Budget was delivered on 24 February, but we have to wait till today to hold a debate on it in this Council, which is already 50 days later. No wonder some colleagues, government officials and even journalists outside the Chamber do not feel like listening to our speeches. Even for me, I have to refresh my memory of what I said in public on 24th and 25th of February before summing up a few points for this speech. I wonder if we can schedule the budget debates at a date closer to the publication of the Budget in the future so that the time gap will not be so long. Of course, a time gap is necessary for Members to follow up with various Policy Bureaux on the details of the provisions.

On 24 February, the Liberal Party indicated support for a number of major proposals in the Budget. In our view, what matters most is that the Budget has provided support for the middle class; for example, salaries tax will be lowered by 75% but subject to a ceiling of $20,000, and the allowances for married person and for maintaining dependent parents will be increased. This time, the middle class does get more benefit than before. On the other hand, the Budget also benefits small and medium enterprises (SMEs) by, for example, reducing profits tax as well as waiving licence fees for travel agents, hotels and guesthouses. As for the grassroots, the Government has undoubtedly continued to provide an extra one-month allowance to Comprehensive Social Security Assistance recipients. Therefore, the benefits brought about by various measures are evenly shared among people from different strata of the community. After considering from an overall perspective, the Liberal Party indicated support for this year's Budget on that day.

We have, of course, expressed our opinion on a number of proposals, for example, the rate waiver is subject to a ceiling of $1,000 per quarter for each household. Although the number of beneficiary households will increase as a result, the number of households currently paying a quarterly rate of more than $1,000 is not small at all, and this has made the rate waiver appear insignificant. Will the Government provide a greater rate waiver if it continues to sit on a hefty fiscal surplus in the coming financial year?

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I wish to discuss in passing the issue of stamp duty. The purpose of introducing Special Stamp Duty is to curb housing market exuberance. I noticed that questions were put to the Government during meetings of the Legislative Council and panels regarding the desirable level of falling land prices (or property prices). In response, the government official said that no yardstick has been set. Similarly, the Government has not defined the reasonable level for fiscal reserves and the Exchange Fund, but it seems to me that the more, the better. However, the case of property prices is different; we cannot say the lower, the better. As a matter of fact, half of Hong Kong's population owns property, while the remaining half certainly live in public rental housing (PRH). In other words, properties are mainly held by members of the public but not properly developers. Thus, the victim of the current falling land prices is the community at large. As for developers, a reduction in property prices would mean a lower tender price for land parcel, which will in turn pull down the price of properties for sale. Worse still, the prices of land parcel and properties will be even lower thereafter. Therefore, the impact on property developers, who are indeed middlemen, is not significant at all.

In my opinion, the Government must be very careful when dealing with property prices as property markets around the world follow a boom-and-bust cycle. Therefore, it would be very difficult to determine the reasonable price. Can we say that the price is reasonable if it is affordable by members of the public? But what is the definition of "affordable"? That is also difficult to determine. People may express strong views when the property market shows no sign of downturn, but when property price plunges after an appreciation in value, they may feel very upset and thus hold grudges against the Government even if this does not give rise to the negative asset problem. Therefore, it is important for the Government to keep a close eye on the property market.

I also agree that as the new stamp duties (or "curb" measures) only amount to 4%, they should not affect the boom or bust of the property market. In other words, property prices will not soar due to the introduction of the "curb" measures, and the prices will not plunge due to the cancellation of the "curb" measures. Nonetheless, I think the Government should pay attention to the fact that many SMEs, when facing cash flow problem, would use their self-occupied properties as collateral for loans to finance business operation. Therefore, this is not simply a matter of accommodation or burden of home mortgages, but may also have an impact on the operation of the entire economy.

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Since the Financial Secretary is now present at the meeting, I want to mention in passing that financial prudence is important, but if the excess reserves generated from such prudence are not ploughed back into society, it may give an impression that Hong Kong's resources have been wasted. I think the Financial Secretary will see what I mean because since 2008, the cumulative difference of the budgets ― several colleagues have mentioned this point earlier on ― exceeded $400 billion, representing a discrepancy between the forecast reserves and the actual reserves year-on-year, which have added up to a total of $400 billion in eight years.

At present, while the total assets of the Exchange Fund amounts to $3,479.8 billion, there is actually another $84 billion being segregated from the government accounts and thus the total should be $3,560 billion. Compared with the mere $1,000 billion 10 years ago (that is, March 2006), there has been a significant increase, not to mention a comparison with that of 1997. From the perspective of the business sector or taxpayers, they would certainly wish to see the Government making good use of their tax payments, and by "good use", I do not mean to spend the entire sum of money on helping the underprivileged. Of course, Members from certain political parties and groupings will be very happy to see every single dollar being spent. So will the elderly people and supporters of universal retirement protection and free education. All of them will feel very happy.

However, from the angle of the business sector, the Liberal Party is worried that the current-term Government may have emphasized too much on housing production, with the highest priority accorded to PRH units and Home Ownership Scheme flats, to be followed by private housing developments. There is, however, a shortage of supply for offices or shopping malls which are conducive to the development of the business sector. Furthermore, as pointed out by many friends from the financial sector, subsequent to the Lehman Brothers and investment product-related (such as accumulator) incidents which happened a few years ago, the Government has become pretty concerned about the sale of investment tools by banks. The Government is worried that in the absence of stringent regulation by banks, it will be accused of ineffective supervision should any problems arise concerning the selling of such products to members of the public. On the other hand, we also notice that many foreign banks (all international banks) have proposed to transfer this kind of business to Singapore. Why is that so? Because judging either from general impression or the professionalism of government officials, people have greater confidence in LEGISLATIVE COUNCIL ─ 13 April 2016 7307

Singaporean officials than Hong Kong officials in terms of their knowledge in financial products. In other words, given that the government officials currently tasked to oversee Hong Kong's financial affairs, be they Secretaries of Departments, Directors of Bureaux or staff of the Hong Kong Monetary Authority, are not well-versed in the ever-changing financial products, they would try to avoid approving products that might be created by the financial speculators to cheat people's money in the absence of proper supervision by any legislation or management framework. This may well protect members of the public, but on the other hand, business opportunities available in the financial sector will be largely minimized.

With regard to business opportunities, President, I have recently met with some pretty radical young people, and some of them even advocate "Hong Kong independence". According to them, they are now in their twenties while Mr TIEN is already over 60; and in 2047, they will be in their fifties while Mr TIEN is over 90, they will naturally worry about their future. They wonder if there is still any chance of making money in the coming few years, and whether the principle of "one country, two systems" still prevails when they are about to retire at the age of 57. Of course, I understand that as only 20 years out of the 50-year period have passed, how then can the Central Authorities tell us at this point how the issue of "one country, two systems" in Hong Kong will be dealt with 30 years later in 2047. Nonetheless, for this group of young people who find their future gloomy and advocate "Hong Kong independence", they will naturally be concerned about this issue as they are now in their twenties and 30 years later in 2047, they will only be 50-odd years old. They may ask: What will Hong Kong become if the principle of "one country, two systems" no longer prevails in 2047? I do appreciate their concern.

If we take a look at the current economic development in China, who could have imagined that Shanghai, Beijing and Shenzhen would have surpassed Hong Kong within 20 years from 1997 to present? Judging from the existing trend, is it possible that all Mainland cities would surpass Hong Kong in terms of economic development and employment 30 years later? A reasonable question thus arise, and that is, what is the point of implementing "one country, two systems" in 2047? If "one country, two systems" is abolished, there will be "one country, one system" instead as all other major Mainland cities will be on a par with Hong Kong in terms of the position as an international financial centre, living standard or quality of living. Thus, in the eyes of the Central Authorities, is there still a need to implement "one country, two systems" by then? This is 7308 LEGISLATIVE COUNCIL ─ 13 April 2016 why those young people have the thinking that, instead of worrying about the abolition of "one country, two systems" in 2047 when they are still in their fifties, they should now rise to advocate the unrealistic thinking of "Hong Kong independence" to counteract "one country, one system". With regard to such thinking, we may either convey a more positive message to them, or expeditiously make a point about whether "one country, two systems" will still be implemented in 2047, though it is still 30 years from now. This certainly has nothing to do with the Financial Secretary; it is a matter of the Central Government or the Chief Executive. In that case, I think many people who do not support "Hong Kong independence" would take the initiative to advise those young people not to worry because they are still in their twenties, and will be just 50-odd years old 30 years later. "One country, two systems" will continue to prevail in the decades to come; we will still be using our HKSAR passports and local currencies; the fiscal reserves will still be used in Hong Kong and we will continue to adhere to the common law and rule of law principles. Hence, the young people should have no cause for concern. I wonder if what I have just said can help allay the anxieties of people advocating "Hong Kong independence".

As for the other concerns of those young people, they cannot be addressed by the business sector or the free market. They complain about the lack of upward mobility. The problem is, given the difficult business environment and the need for most listed companies to be accountable to their shareholders, even the private sector has to exercise financial prudence. Private companies are not charitable institutions, they may donate part of their profits after tax deduction, but we cannot regard them as charitable institutions. Companies have to make annual salary increment for staff; they may have to offer a monthly salary of slightly higher than $12,000 or $13,000 to university graduates. However, if the company fails to make profit, it can no longer continue to operate. Therefore, judging from the perspective of a free economy, we can do nothing about this problem, and we cannot allay the concern of young people. On the question of how to address the concerns of young people over the gloomy future when they are between 20 and 40 years old, as well as how to deal with the problem after 2047, I think more should be done by the Government.

With regard to the recent business opportunities, especially in respect of the tourism industry, I have a few points to add as the former Chairman of the Hong Kong Tourism Board. In view of the poor economic condition in Europe, it will be very difficult to attract more European tourists to come to Hong Kong, not to mention the waves of emigration and the flood of refugees plaguing the European LEGISLATIVE COUNCIL ─ 13 April 2016 7309 countries. Although the situation of the United States is slightly better, we cannot rely on one country alone. I therefore share the view that the local tourism industry cannot do without the Mainland market. Thus, I hope that the Government will continue to explore and increase the number of Individual Visit Scheme (IVS) cities. With regard to the problems relating to shopping, I think they have been settled for the time being with the introduction of the "one trip per week" policy. If Hong Kong can reconstruct its image on the Mainland, such as shaking off the image of "kicking suitcases", and coupled with an increase in the number of IVS cities, I think this will not only help boost the business of the retail and wholesale sector in the short run, but will also have positive implication on the employment of the majority of people and the economic performance of this year.

Thank you, President, the Liberal Party supports the Budget.

MR JEFFREY LAM (in Cantonese): In 2015, we saw a sluggish growth in the global economy and a highly volatile financial market, and various economic data are worrisome. Last year, the value of total exports recorded a year-on-year decline of 1.8%, which was the first decline after the global financial tsunami in 2009, whereas the decline in total retail sales, when compared with 2014, has further enlarged to 3.7%. Furthermore, visitor arrivals to Hong Kong also dropped significantly by 8% in the fourth quarter of last year and fell by 2.5% year-on-year from the previous year. Worse still, the drop of overnight visitor arrivals reached as high as 3.9%. Therefore, it is not exaggerating to say that Hong Kong's tourism and retail industries are facing a "severe winter".

In fact, the economic growth of Hong Kong was only 2.4% last year and the Financial Secretary even predicted a mere growth of 1% to 2% this year. This is echoed by the two leading credit rating agencies, namely the Moody's and Standard & Poor's, which also considered that Hong Kong's economic outlook is not so bright. Although our views over the China factor are divergent, the Global Financial Centres Index 19 published by the City of London Corporation showed that Singapore, which has edged Hong Kong by two points, now emerged as the third largest financial centre in the world and we have slipped to the fourth rank. The signal sent out by all these drops in ratings and rankings is indeed worth our reference and vigilance, and the Government must take precautionary measures in the face of the challenges.

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President, although Hong Kong's economy has not grown significantly in recent years, the situation has not seriously aggravated and the unemployment rate remains at a pretty low level. And yet, Hong Kong is extremely vulnerable to external economic influences. After the Lunar New Year, data of the tourism and retail industries have sounded an alarm that the business environment of this year is going to be very difficult. Generally speaking, this year's Budget has not only abided by the prudent financial principles, but has also prepared for the rainy days and invested for the future. The Business and Professionals Alliance for Hong Kong (BPA) and the Hong Kong General Chamber of Commerce (HKGCC) welcome this approach, especially the Government's plan to take concrete measures to support and assist small and medium enterprises (SMEs) to tide over the present difficulties, which include reducing profits tax by 75%, subject to a ceiling of $20,000 and waiving business registration fees.

Furthermore, the Government has also extended and enhanced the SME Financing Guarantee Scheme. In addition to reducing the annual guarantee fee rate by 10%, it has also removed the minimum guarantee fee for the measures. Though the amount of money involved appears insignificant, it does achieve the effect of stabilizing employment and the community with regard to 320 000 SMEs employing 50% of local employees.

However, I dare not be too optimistic about these measures. This is because the majority of local workers are engaged in service industries such as tourism and catering, and a slight change may affect the whole. In the face of a volatile external economic environment, SMEs may encounter similar difficulties anytime, as in the case during the financial tsunami in 2007 and 2008. I recall that the Special Loan Guarantee Scheme (SLGS) of $100 billion that we proposed to the Government back then, with its simple procedures and loan guarantee commitment by the Government, had helped many SMEs tide over the difficulties. Although the SME Financing Guarantee Scheme launched by the Government is still in operation, we notice that not only are the procedures cumbersome, the application time is also very long. It is possible that when the loan is approved, the applicant concerned is already on the verge of bankruptcy. Therefore, this year, I hope that the Government will keep a close eye on the operation of SMEs and take immediate actions when there are pressing needs. It should not rule out the possibility of re-launching the SLGS.

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After the Government adopted our proposal back then, the entire business sector, be they large, medium or small enterprises, sang high praises of the SLGS and said that it had assisted many SMEs. Similar comments can still be heard from time to time. Thus, I hope that the Government will genuinely listen to the views of the business sector, especially SMEs, to see what kind of assistance can be provided to help solve their problems in such difficult times.

President, the Budget also mentions the plan to establish a "single window" as the sole information technology (IT) platform, with a view to enabling "one-stop" lodging of all trade documents with the Government for trade declaration and customs clearance purpose, thereby saving the need to approach different government departments separately. The three-month consultation of this proposal will kick off today. To the import and export trade industry, this is an important measure introduced by the Government to streamline the procedures and reduce the operating costs of the industry. I therefore hope that the Government will implement the measure immediately after the consultation period is completed, and inform the enterprises accordingly so that they can be benefited as early as possible. Here, we would like to thank the Government again for accepting our proposal to launch this "single window" initiative.

President, in the face of economic adversity, we should not only hold on patiently, but must also seek to strike a rebound. One of the highlights of this year's Budget is the Government's generous injection into innovation and technology. At the enterprise level, the BPA and the HKGCC have all along hoped that the Government will provide incentives to encourage the business sector to increase their commitment to research and development (R&D). The Budget has increased the rate of cash rebate for enterprises' R&D activities as well as set up a $2 billion Innovation and Technology Venture Fund and a $500 million Innovation and Technology Fund for Better Living. All these are actual support to SMEs and represent an important step forward.

In addition to providing funding support, the Government should also remove the policy and regulatory barriers. For start-ups, particularly those engaging in financial technologies (Fintech), their development is bound by many restrictions in Hong Kong. While IT would help bring about market breakthroughs, it is necessary to introduce new legislation or amend existing laws to tie in with the development of the start-ups. Therefore, the Government must review the outdated regulatory framework and catch up with technological advancements, so as to keep pace with the ever-changing environment. Given 7312 LEGISLATIVE COUNCIL ─ 13 April 2016 that our neighbouring countries have started to develop technologies long ago, whereas Hong Kong is a late-starter and is now lagging far behind other countries, we thus have no choice but to speed up the pace in order to make up for the time lost.

Furthermore, in order to further reduce the financial burden of SMEs and encourage investment in R&D, I also hope that the Government would adopt the "two-tier" profits tax proposal put forward again by the BPA and the HKGCC, whereby the first $2 million in taxable income is taxed at a lower rate of 10%. It is estimated that approximately 80% of SMEs will benefit and save as much as about $130,000 on their tax bills every year. Although the revenue of the Treasury may have reduced, this sum of money can be used to enable SMEs to further develop and enhance competitiveness, which would bring about economic benefits that should not be overlooked.

President, the Budget has also fully recognized the importance of infrastructure investment as it not only can promote employment, but more importantly, it is an essential part of future economic development, to which I cannot agree more. And yet, various public works and major infrastructure projects have faced different kinds of obstructions in different stages from discussion, funding to construction. Examples of such projects include the Hong Kong-Zhuhai-Macao Bridge and the Express Rail Link. At present, the Airport's Third Runway Project is also met with opposition, the underlying reasons are obstructing further integration between Hong Kong and the Mainland as well as impeding Hong Kong's way out in the future. Our airport has been commissioned for nearly 18 years and has contributed significant economic benefits to Hong Kong. We may recall that the project had also met with serious opposition back then. Instead of opposing what they had opposed back then, these people have now turned their target of opposition to other issues.

The economic benefits brought about by the airport are obvious to all, but since the capacity of existing runways will soon be saturated, we must expeditiously construct the third runway. As a matter of fact, according to the current estimate, the airport may reach its capacity by the time the third runway is built. While the third runway can help maintain Hong Kong's competitiveness and its status as a maritime centre, we notice that there is a shortage of manpower in the local construction industry, which will directly impact on the progress of many projects. Therefore, the BPA hopes that the Government will, without LEGISLATIVE COUNCIL ─ 13 April 2016 7313 prejudice to the employment of local workers, seriously consider relaxing the Supplementary Labour Scheme. This is indeed not only a problem of the construction industry. Given that Hong Kong has an ageing population and a declining fertility rate, there will be a sharp decline in the working population in the future. Apart from extending the retirement age, Hong Kong, being a metropolis, should also consider attracting more foreign talent.

According to many friends from the business sector, when they conducted overseas recruitment, many foreign talents were deterred by the inadequate international school places in Hong Kong. We hope that the Government will set aside more land for the construction of international schools so as to make Hong Kong a more attractive place to work. Besides education, air pollution is another problem that deters foreign talents. We hope that the Government can be more proactive in solving these problems by, for example, encouraging bus companies to use more electric and hybrid buses.

This year's Budget has not only shown care for the business sector, but has also brought benefits to people from all walks of life, especially the middle class and the grassroots. The Budget proposes to launch three new measures, which include reducing the salaries tax by 75%, subject to a ceiling of $20,000; waiving rates for four quarters, subject to a ceiling of $1,000 per quarter, as well as providing "double pay" for Comprehensive Social Security Assistance recipients. All these measures have the immediate effect of reliving the burden of the public. Meanwhile, the Government has made even greater commitment in providing care for the elderly and healthcare, which include setting aside a dedicated provision of $200 billion for a 10-year hospital development plan, enhancing services for the elderly, strengthening community care services as well as speeding up the provision and improving the quality of residential places for the elderly. In the face of an ageing population, I expect the Government to do more in this regard in the future and plan for the elderly, so as to genuinely achieve the goal of giving the elderly a sense of belonging.

President, as we have seen in recent years, Hong Kong has seen plagued by dissension within society, as well as incessant disputes and confrontations, thereby tarnishing the international image of Hong Kong. With the upcoming elections of the Legislative Council and the Chief Executive to be held this year and next year respectively, political disputes will only be on the increase. If this coincides with economic downturn and rising unemployment, social unrest will 7314 LEGISLATIVE COUNCIL ─ 13 April 2016 continue to grow. I call upon the SAR Government and politicians from different sectors to take the interest of the whole into account, put people first, be cautious with their words and deeds and meet the various challenges.

Recently, it seems that the situation in the Legislative Council has improved with less filibustering. I hope this situation may last until July with further improvements because, so far, we have accumulated a large number of funding proposals pending approval. Today, it is pretty quiet here with a low attendance, but we have at least done what Members of the Legislative Council should do.

President, I so submit.

MRS REGINA IP (in Cantonese): President, concerning the Financial Secretary's Budget, I am going to comment on three aspects.

First, in the areas of maintaining fiscal discipline and getting prepared for a rainy day, I give the Financial Secretary very high marks. The reason is that he has accumulated for us a fiscal surplus of $860 billion; he has set aside $200 billion for the hospital development plan for the next 10 years; and he has injected $220 billion from the balance of the Land Fund into the Future Fund. In respect of housing construction, the Financial Secretary has set aside the investment returns of $45 billion of 2015 as an injection into the Housing Reserve. The balance of the present housing reserve has amounted to $74 billion. To sum up, the Financial Secretary has saved for us nearly $1,000 billion, which can be used for housing and hospital construction and future development. In respect of getting prepared for a rainy day, the Financial Secretary has done a good job. He has once said that he was piling up sandbags to prevent a tsunami. He is a good civil servant adhering to fiscal discipline and prudent financial management, which is commendable indeed.

In terms of alleviating people's hardship, the Financial Secretary uses the same tactics each year, such as increasing the personal allowance, dependent parent allowance or Comprehensive Social Security Assistance; he is using more or less the same tactics every year. The Financial Secretary said that his initiatives need not necessarily be ground-breaking and he needs not use new tactics every year. He has done a good job in terms of relief measures, and this LEGISLATIVE COUNCIL ─ 13 April 2016 7315 year, he shows more care for the middle class, for which he has won considerable applause.

This is the ninth Budget delivered by the Financial Secretary. To our disappointment, his efforts in promoting economic restructuring and long-term macro-economic management is not vigorous enough, and progress has been slow. This is probably because the Financial Secretary, who comes from the Civil Service, will consider which items of the public accounts should have less provision, and which items require injection of funds. If we compare the Financial Secretary with Mr LI Kuo-ting, known as the "Father of Taiwan's Economic Miracle", who has established Taiwan industries ― today, Taiwan industries also need restructuring and they going downhill ― the Financial Secretary has not done much in promoting the development of the manufacturing industry and economic restructuring. We can even say he has done nothing.

In 2009, the former Chief Executive promoted six industries where Hong Kong enjoyed clear advantages. As the hasty introduction was not properly supported, many industries have now come to no fruition, including the education and healthcare industries. This situation was harshly criticized by the Legislative Council. As we all know, there is a shortage of land in Hong Kong and recently personnel from the Hospital Authority (HA) indicated at a hearing of the Legislative Council that the HA was in shortage of 300 doctors. How then can the healthcare industry be developed? We have neither land nor manpower. Since the Financial Secretary was once a civil servant, he lacked new ideas for promoting industries. Last year, he proposed the food truck concept ― this is simply a joke. While some people or small and medium enterprises welcome the introduction of food trucks, the fact remains that no matter what food these trucks sell, I do not think that issuing licences to food trucks can increase the value of economic output or improve people's standard of living.

In fact, food trucks in foreign countries only sell the cheapest food. Food trucks in New York City only sell the most common food for ordinary people. A student patronizing a food truck at university only needs to pay US$5 for all you can eat, and he can fill his stomach. A food truck policy definitely cannot increase the value of economic output of Hong Kong which is a high-cost economy.

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The Financial Secretary will inject $20 million into the Film Development Fund to support locally-produced Cantonese films and more subsidies would be provided to each film. Business is business; what matters most is whether there is a market for the product. I am not saying that the market for Cantonese films is not big enough, but there is limited room for Cantonese films in the international or Mainland market. To increase the value of economic output or improve the standard of living in the long run, these minor measures will not help much.

I am particularly concerned that our four pillar industries are facing serious challenges. A number of Members have mentioned this point. However, the Financial Secretary has not shared with us or explained to us the crisis that Hong Kong is now facing. Many Honourable colleagues have said that the tourism sector is facing a serious crisis, and there are figures to prove. In the past, we relied too much on the Individual Visit Scheme. After the implementation of the "one trip per week" measure for permanent residents of Shenzhen, there was a drastic decrease in the number of IVS visitors; therefore, the retail and tourism industries are pouring out grievances. At the same time, the Government lacks long-term planning for tourism development. The Government has to make long-term investment; it should vigorously introduce eye-catching international investment projects, new projects and forward-looking projects, so as to revitalize Hong Kong as a tourist destination through forward-looking investment. Unfortunately, these policies have not been introduced.

The high commodity prices have made business difficult for the tourism industry. As Hong Kong dollar is pegged to the US dollar, our standard of living is higher than many other places; thus, Hong Kong is an expensive city. Considering the services provided by our services industry, even the services of the most upscale designer shops are not particularly better than those of designer shops in Europe.

The consumption patterns of Mainland visitors have changed. They do not necessarily have to come to Hong Kong; they also feel at home when travelling to Korea or Japan where there are more attractive and inexpensive products. Under such circumstances, our tourism industry is facing a major crisis in the long run. Yet, the Financial Secretary or the officials concerned LEGISLATIVE COUNCIL ─ 13 April 2016 7317 have not proposed drastic and appropriate remedial measures to revitalize our tourism industry.

Another industry facing considerable challenges is certainly the shipping, trade and logistics industry. The Chief Executive referred to the Belt and Road Initiative many times in the Policy Address. Of course, the Belt and Road Initiative will create opportunities for Hong Kong, but it will also bring changes to the global or Asian trade pattern.

I have recently participated in the celebration activity of the Pakistan National Day. The Pakistan authorities exhibited one of their projects, that is, the China-Pakistan Economic Corridor. The railway and pipeline projects invested by our country in Gwadar Port in Pakistan have commenced. The foreign media also reported some shocking developments.

President, you like to travel and you travelled with "Long Hair", perhaps you should try to use the following railways. As reported in the latest issue of The Economist, our country has constructed a railway in Yiwu which passes through Kazakhstan, Kyrgyzstan and Uzbekistan before reaching Iran and Tehran, and the railway can be commissioned in April. The foreign media called the railway the "Silk Rail", and it can shorten the journey from Iran to China to eight days, one month faster than the journey by sea. In other words, in addition to passenger and freight transport, the Silk Rail can be used for the transfer of goods from Tehran to Yiwu in the future.

In addition, the United States has lifted the embargo on Iran and revoked sanctions. Since India has invested in Chabahar, a port at the southern tip of Iran, cargos need not transported to India through Pakistan in future. As there is a lack of capital investment in the port, our country is also interested in making investments there.

With the continuous progress of the Belt and Road Initiative, there will be changes in future trade patterns, as well as in trade routes and roads in Central Asia and Asia. In other words, many ships may not come to Hong Kong. We have heard a message that may have great impacts on the shipping industry. When the last-term Legislative Council scrutinized the Competition Bill, I voted 7318 LEGISLATIVE COUNCIL ─ 13 April 2016 against it. An anti-competitive practice under the Competition Ordinance is collusive bargaining. The shipping industry often uses "conference rates", that is, the shipping companies agree on the rates for travelling to the Pacific Ocean. As this practice may violate the Competition Ordinance, some shipping companies dare not come to Hong Kong now.

Under the current trade, transport and traffic patterns, and coupled with the continuous construction of high-speed rail and railways, the future demands for our shipping, logistics and trade services will dwindle owing to the industrial transfer of our country. Among the four pillars, the trade, shipping and logistics sectors employ the largest number of employees. Is there a way out in the long run? The Financial Secretary and the government officials concerned have not given any warning to the public or the industry, and I am greatly disappointed. They really have a weak sense of crisis. The trade pattern in the world has been changing with our country's economic rise and promotion of the Belt and Road Initiative, and Hong Kong must constantly adjust its role so as to meet these new challenges.

The Financial Secretary also mentions the so-called new economic order in the Budget but I really want to speak out after reading those paragraphs. About the new economy, the consensus of financial analysts, economists and the international media is that the new economy is a disruptive economy propelled by technology; and an example is Uber. The old economy refers to the traditional economy covering steel, energy, housing and home appliances. Our consensus is that China's old economy is fairly weak but the new economy is quite successful. Tencent and Alibaba are successful but the market share is unfortunately not big enough, and this is the difficulty faced by our country in respect of economic restructuring.

Speaking of the new economy, many people will say that it refers to the rise of the Internet or the rise of the digital revolution. After the launch of the Internet in 1990, there have been a series of digital revolutions, and new technology brings about a new economic order. But the new economy does not mean the new economy after the financial tsunami in 2008. Strictly speaking, there is a new economic disorder rather than a new economic order after the financial tsunami in 2008.

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Two major driving forces have affected global economic development and brought sweeping changes. They are scientific and technological revolutions and the economic rise of our country. These changes took place within the last 30 years and not only after the financial tsunami in 2008. After the financial tsunami in 2008, various countries in the world have been struggling to deal with the aftermath. Today, the excess manufacturing capacity of our country is also caused by the financial tsunami in 2008. We also have a quantitative easing policy like other countries, which resulted in the excess manufacturing capacity today.

The Financial Secretary is the top economic official in Hong Kong but he made nondescript descriptions of the new economic order and the forces that have changed the global economic landscape in the Budget, which really made me feel a little embarrassed. Hong Kong ranks fourth among top international financial centres and is an advanced city but the knowledge of our financial officials is quite disappointing.

MR TANG KA-PIU (in Cantonese): President, regarding this year's Budget, I notice the comments made by the public and some political parties: lacking in initiative and overcautious, so-so, acceptable and can be supported. Of course, in respect of voting or filibustering, Members of the Democratic Party are more courageous and are willing to commit. They declare that they do not oppose filibustering but will not get involved. As regards the views of The Hong Kong Federation of Trade Unions (FTU), Mr WONG Kwok-hing has spoken his views on behalf of FTU. In the view of FTU, the Budget has responded to various issues, and some of the initiatives proposed are commendable. Yet, despite having a huge fiscal surplus, the Budget has not touched on nor reflected on people's grievances accumulated over the years, as well as some social issues. As a Member from FTU and a representative of the labour sector, I do not have the vision of Mrs IP on the development of the regional economy, I will only look at the Budget from the perspective of the grassroots.

In respect of the Government's services and operation over the past 10-odd years, the grievances and hardships of the people are attributed to the Government's privatization of public services before and after the reunification. 7320 LEGISLATIVE COUNCIL ─ 13 April 2016

The privatization of public services has led to the emergence of three villains, namely, the Mandatory Provident Fund Schemes Authority (MPFA), Link Real Estate Investment Trust (Link REIT) and the MTR Corporation Limited (MTRCL). Today, the labour sector, the grassroots, the middle class and even the business sector all have strong criticisms against these three organizations, in particular the MPFA and Link REIT. Obviously, some people now regret having made that decision then.

Since Hong Kong has a huge fiscal surplus, I really do not understand why the Financial Secretary does not boldly and decisively implement some comprehensive policies to indicate that the SAR Government has the resolution and capability to reflect on and review the problems brought by the privatization of public services in the past, and right the wrong now.

For example, recently many people talk about MTR fares. Some say that the MTRCL is allowed to raise fares every year because of the ill-designed Fare Adjustment Mechanism (FAM) which only takes into account the inflation element but not the profit element. If the Financial Secretary designs an adjustment mechanism that only reduces but not increases MTR fares, does he have the confidence that the mechanism will be passed at the general meeting of shareholders? Such a mechanism will never be passed. Many Members criticize the Administration for being schizophrenic, hitting its right hand by the left hand, and it can never solve the problem. The reason is that whenever the MTR Board discusses the fares and even the regulatory issues, government representatives always withdraw from the meeting and eventually, the Government is unable to regulate the fares. Or when the MTRCL gets into trouble, the authorities are forced to stay away and can hardly interfere. The scandal about the Hong Kong Section of the Guangzhou-Shenzhen-Hong Kong Express Rail Link project is a case in point. Eventually, the authorities can do nothing but fatten this independent kingdom.

Hence, we must reflect on the reasons why the MTRCL, which used to win acclaim in the past, has now gone astray. Unless it undergoes a major restructuring, it will not go back on the right track. If we do not do so, there will be increasingly strong criticisms against the seven railway lines in the pipeline. Since the MTR fares are automatic raised each year and the MTRCL lacks LEGISLATIVE COUNCIL ─ 13 April 2016 7321 commitment, and many railway lines, such as the Shatin to Central Link, are built with government funds, it is highly probable that the seven railway lines will also be built with government funds in the future, why does the Government still hand over the control of these railway lines to the MTRCL? If the opposing voices get stronger and the MTRCL does not undergo any structural reform, the Government has to respond to the public whether a new railway corporation will be set up. Should the Government provide funding to establish a new railway corporation to introduce competition or should it simply buy back the shares of the MTRCL?

The Secretary has responded today, saying that the Government will not use the $4 billion-odd cash dividends of the MTRCL to set up a so-called fare stabilization fund to suppress fares. Government officials used to put all government revenues into the treasury and seldom set up this kind of dedicated funds. As such, will the authorities truly buy back the MTRCL shares?

The MTRCL's market value is about $220 billion. As the Hang Seng Index has risen over 600 points today, I wonder if its market value has increased. The Government is holding 75.6% of the shares while only about 25% of the shares are for circulation. Since the Government is the biggest shareholder, it should have the power to control everything. How come the Government's hands are tied and it has never monitored the MTRCL in respect of fares and the actual operation of the corporation. Why not just buy back the shares? Should the Government buy back the shares, 24.4% of the MTRCL shares will amount to about $54 billion. Is this a large sum of money? Will the Government suffer a loss and has to keep on subsidizing the MTRCL if it buys back all the shares? The answer is in the negative. The annual profit of the MTRCL is over $10 billion. Even if the fares are frozen for five years, the Government can make an annual profit of $8 billion to $10 billion from the MTRCL, thus $50 billion will be recovered in no time.

If the Government really buys back the shares of the MTRCL, the share prices will be pushed up. Since the financial departments or the Hong Kong Monetary Authority (HKMA) are so keen to issue bonds, can bonds be issued to replace shares? Can bonds be issued to be subscribed by Hong Kong citizens only to buy up all the MTRCL shares in circulation in the market? I note that the MTRCL has, in the past few years, intentionally or unintentionally presented itself as a quality enterprise that gives out high dividends. The intent is to make 7322 LEGISLATIVE COUNCIL ─ 13 April 2016 the Government give up the idea of buying back the shares as shareholders will not support such an act. In 2010, the cash dividend per MTRCL share was $0.59 in the whole year, but in 2014, it rose to $1.05 per share, an increase between 30% and 40%. It seems that the MTRCL intends to win the support of the general public by handing out high dividends. If the Board or senior management of the MTRCL do have the intention to win the support of the public or its shareholders, it will be increasingly difficult for the Government to buy back the shares of the MTRCL.

Hence, as the Government now intends to review the FAM of the MTRCL, I call upon the Government to take this opportunity to study the restructuring of the MTRCL with the aim of buying back its shares. There are two possible approaches. First, the Government buys back the share on its own, or second, the Government commissions a public body, such as the HKMA or the Hong Kong Mortgage Corporation Limited, to buy back the shares and become the second biggest shareholder of the MTRCL. With two government departments acting as shareholders, the Government can determine the future of the MTRCL and address the issues that are our prime concerns, namely, fares, service quality and monitoring of work projects. Having $800 billion in fiscal reserves (excluding foreign currency reserve assets), if the SAR Government is unwilling to carry out reforms to address the problems that caused serious public grievances, but merely tries to win the applause of the public by handing out some "candies" each year, presenting certain movie plots and singing some lyrics of a song, the problems will remain unsolved. A responsible government should not do so. We hope that the Government can decisively address the problems.

The problem relating to Link REIT is even more complicated. If it is left unresolved, I am afraid the so-called "food revolution" will persist, planting seeds of uncertainty for Hong Kong. The problems that people are forced to buy expensive food and small business operators are forced to wind up their business are attributed to the privatization of public services years ago. With the market value of Link REIT standing at $103.2 billion, how can the Government buy back the shares? Can the methods I suggested earlier be adopted, such as issuing bonds to acquire the shares of Link REIT, or buying back the entire Link REIT, or even engaging in "confrontation" as suggested by scholars of certain social schools or economics schools? These scholars suggest setting up another market next to the market managed by Link REIT, or providing subsidies to certain organizations to hold bazaars as a form of confrontation. The problem is that there are 200-odd shopping centres and markets run by Link REIT, and with LEGISLATIVE COUNCIL ─ 13 April 2016 7323 limited land resources, how is it possible to set up another market or hold a bazaar next to each of the shopping centres or market managed by Link REIT? That is simply not possible. In the past, many people considered that buying back Link REIT was just a slogan, but as more and more people now resent Link REIT, they consider that the Government may have to take such an action as the last resort. The reasons are that Link REIT has gone too far and it seems that it has gone out of control, yet its acts have affected the living and livelihood of thousands of households.

A new budget is presented year after year. Though political parties have reflected people's aspirations and demands year after year, the Government keeps adopting the same tactics year after year. It hands out "candies" and comments on the good or poor performance of the economy, yet it never truly tries to resolve the long-standing social problems by means of financial policies or resources.

Lastly, the Mandatory Provident Fund (MPF). The Government is now vigorously publicizing its plan to set up a "core fund" to set the statutory fee cap, stipulate clearly the statutory requirements regarding the investments and also de-risk the investments according to individual investors' age. I intended to propose an amendment but was unable to submit it in time for discussion and endorsement by the Council. Hence, I would like to take this chance to expound the contents of my amendment. Since the "core fund" is called "core", it should serve as a benchmark. I thus proposed in my amendment that the investment return rate of the core funds of all 38 MPF schemes cannot be lower than the inflation rate. If the average investment return rate of any MPF schemes is lower than the inflation rate for five years, the operation of those schemes will be discontinued.

Some would ask if this penalty is too heavy. If the operation of those schemes is discontinued, who is going to operate the schemes? I suggest leaving the operation with the Government. Since the Government is already operating the "iBond" and it will introduce the "silver hair iBond" this year, can the Government operate the MPF schemes as well? Besides, the Government has always stressed the advantages of MPF, citing that the competition between MPF trustees and banks can boost their performance and lower the fees. When we make the assumption that this applies to MPF as well, it seems that no one believes it. As the Government is about to introduce the "core fund", why not take this opportunity to impose the condition as stated in my amendment to introduce competition among the trustees and banks; and whoever loses in the 7324 LEGISLATIVE COUNCIL ─ 13 April 2016 competition will have to leave. If no trustees or banks can reach the target in the end, the Government should take over the operation of the MPF schemes. FTU is very anxious to launch a public trustee scheme, so as to meet the aspiration of those who just wish that their pension return can keep up with inflation.

Please do not tell us that 80% of the MPF fund is the capital and 20% is the investment return and the return rate has been rather satisfactory for the past 10-odd years. When we asked some workers if 20% of their funds in the MPF account were investment returns or if all their investments were lost, the workers were gravely aggrieved. They considered that the MPF could not provide retirement protection for them. Both the labour sector and the employers in the commercial sector think that the MPF System only benefits fund managers and the banking sector. We estimate that the administration charges and profits of the MPFA will reach $10 billion. The HKMA manages exchange funds with a face value of over $2,000 billion. Does it need to spend $10 billion on administration? We truly doubt that.

Let me cite another example. The provident fund for teachers amount to a total of over $60 billion and how much is the administration charge? The rate is under 0.4% but teachers are guaranteed to receive 5% dividend every year. How come that is possible for the provident funds for teachers, but not for the MPF? I hope the Government can address the shortcomings brought by the privatization of public services as mentioned by me just now. The Government should make good use of the huge financial resources and have the determination to reform and to address the problems. If so, I believe the people's grievances can be alleviated.

I so submit. Thank you.

MR ALBERT CHAN (in Cantonese): President, will continue to oppose the Budget that tilts towards the rich and the powerful. The mentality of the Financial Secretary has remained unchanged over the years and the feature of the Budget is in line with his mentality, and that is, the wealthy are given more but the poor, the "five have-nots", remain destitute. Basically, as always, this Budget waives rates and reduces profits tax and salaries tax, thereby allowing the rich to continue to have more. Last year he waived the rent of public rental housing tenants but this year, the relief measure has gone.

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The Financial Secretary is now more blatantly favouring the bigwigs. Perhaps as he intends to stand for the Chief Executive election, the support of the coterie is even more important now. Hence, he curries favour with the tycoons through public power, taking advantage of his position as the Financial Secretary. As for ordinary people who do not have the right to vote, the Financial Secretary continues to ignore them and disregards their hardships and plights. However, the Financial Secretary is far more skilful than LEUNG Chun-ying at employing political tactics. He injects an additional $20 million into the Film Development Fund to encourage the use of Cantonese, giving people the impression that he is the Financial Secretary for the local people. Suddenly he becomes our local hero. But does he genuinely support the local people? We can tell by looking at the actual contents of the Budget. Later I will talk about the local community economy and through my analysis, I will expose that the Financial Secretary is actually a bogus supporter of localism.

President, for the past century or so, local industries played a very important role in Hong Kong's economic development. Before the inception of Hong Kong, there were fragrant wood trades, pearl culture and log ponds. Before World War II, there were heavy industries such as ship building and light industries such as moulding, manufacturing of rubber goods, paint, construction materials, buttons and underwear; there were also the manufacturing of medicinal and food products and printing industry. After the War, there were various kinds of manufacturing industries such as textile, garments, toys, plastic products, clocks and watches, as well as electronic products. Some elderly residents in Ping Chau told me that during the 30s and 40s, the lime manufacture industry thrived in Ping Chau. At that time, there were an abundance of corals under the sea in the area around Ping Chau and Mui Wo and they harvested corals to make lime. But with the decline in the volume of corals, the lime manufacturing industry also gradually dwindled into extinction. The contribution of the manufacturing industries to Hong Kong's GDP fell from the peak of 30% to about 1.4% in the past one or two years and it keeps falling, just like the reputation of LEUNG Chun-ying.

Moreover, the usage and floor area of industrial lands also continue to plunge, dealing a fatal blow to the industrial development in Hong Kong. It is a well-known fact owing to the high rentals in Hong Kong, industries can hardly survive. President, the area of industrial lands has shrunk sharply. During the 7326 LEGISLATIVE COUNCIL ─ 13 April 2016

80s, we still had 800 hectares of industrial lands in Hong Kong, but in 2008, the area shrank to 300 hectares. More than half was gone with only 40% remained when compared to the area in the 80s.

President, the vacant floor area of multi-storeyed industrial buildings had reduced from 1 380 000 sq m in 2009 to 980 000 sq m in 2013. With less and less vacant floor area, the rents rise rapidly. Property prices surged from a few hundred dollars per square foot in the 80s to the present $2,000 to $3,000 per square foot; rents also rose from $3 to $5 per square foot then to the present $10 to $20 per square foot. The rents of some industrial buildings are even over $30 per square foot. This trend is detrimental to our industrial development. President, as the Government continues to encourage owners of industrial buildings to apply for conversion of their buildings, some industrial buildings have been converted into commercial buildings and others have become hotels and other, the gross floor area of industrial buildings have dropped significantly and this phenomenon continues.

The decline of industries has grave impact on the development of local community economy. President, let me compare Hong Kong to other places. As far as the development of local community economy is concerned, I believe there are three places with high representativeness, namely Israel, Switzerland and Singapore. President, while we just visited Singapore, you and "Long Hair" went to Poland. Ten Members went to Singapore and we visited the water resource facilities and other related facilities. When Israel was first founded, it had nothing. But with its determination to develop industries, it can now take pride in the percentage of GDP represented by industries. In respect of the percentage of GDP represented by industries, it is 30% in Israel, between 26% and 27% in Switzerland and over 30% in Singapore. But in Hong Kong, the contribution of industries, including those just mentioned, to the GDP is only a little more than 1%, and if other manufacturing industries and other trades are included, it is 7% as suggested by government statistics. The demographic composition and area of these three places are comparable to Hong Kong's. The governments of these places stress the necessity to promote industrial development as that suits the actual situation of their countries and also their demographic development. Any leader, especially government leaders, should promote and establish the industries in their countries or places.

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Over the past few decades or even over the past century, Hong Kong had established and developed many industries. However, after TUNG Chee-hwa became the Chief Executive, the Government had deliberately eliminated various industries. Wah Kai Industrial Centre (Wah Kai) is a case in point. The site of Wah Kai was resumed for the construction of the West Rail Line. As a result, some 600 factories disappeared; many people went bankrupt and even committed suicide. I will write a book later to expose the plights and sufferings of factory owners in Wah Kai and how the Government employed high-handed and despicable means to drive industries to extinction.

In Israel, there are many industries, including hi-tech industries such as water work technology, aerospace technology, biotechnology and nanotechnology. Israel also takes pride in its agricultural produce, with 95% of the produce for self-subsistence and the rest for exports. As we all know, Switzerland has great accomplishments in the manufacturing of watches and clocks, as well as pharmaceutical products, which the Swiss Government makes great efforts to promote. Besides, Switzerland is also world-famous for its production of medical equipment and metal finishing equipment.

Many people may not be aware that Singapore is the world's leading producer of advanced marine machinery. The production of aircraft engines also plays an important role in its economy. These industries have gradually developed through the government's assistance and promotion. These achievements were not attained when Singapore was founded. On the contrary, the Hong Kong Government deliberately eliminates or destroys what we once had. Under the encouragement and promotion of their governments, those countries have developed various technologies and their industries can meet their daily needs, for example, the chemical industry and food processing industry in Singapore.

President, over the years, I have presented many views after the delivery of the policy address and the budget, including how to revive the industrial development in Hong Kong. Earlier, the Government said that the development of innovation and technology can promote "re-industrialization". Of course, this is nothing but a lie. For example, the Government talked about expanding certain industrial estates, but its real purpose is to create a chance for transferring 7328 LEGISLATIVE COUNCIL ─ 13 April 2016 benefits to the bigwigs rather than to promote "re-industrialization". Hence, I do not have great expectations of the Innovation and Technology Bureau.

I wish to point out that there are many areas of work that Hong Kong can undertake. The Government may not need to inject large sums of money, all it needs is to formulate policy, provide land or infrastructure. In fact, in other places and countries, there are clear policies stipulating how to get government support. The Government only needs to draw on the experience of those places. There are many industries that Hong Kong can engage in, such as electronics, watch and clock, fashion, jewellery, food processing, or even pharmaceutical. Hong Kong has advantages in these industries.

As the Government always says, Hong Kong has the support of our Motherland with a population of 1.3 billion. If Hong Kong focuses on the Mainland market, Mainlanders will scramble to buy pharmaceutical products or food products produced in Hong Kong. With such a strong support, the Chief Executive is extremely stupid and mindless not to take advantage of this situation to create employment opportunities and redevelop high valued-added industries again in Hong Kong. The reason is very simple, President. He cannot get any personal benefits. Industrial development takes time, but in respect of financial development or investment, he can reap benefits anytime so long as he lines up some people to build a network. If not so, how would LEUNG Chun-ying receive from a foreign company $50 million before he became the Chief Executive? Later, through some connections, he can arrange his children to work in certain organizations or engage in certain studies or projects.

The bigwigs can use their position and relations to promote certain policies, so as to reap benefits. The incumbent government is blatantly holding this attitude. Someone even used his authority to get special treatment when claiming the luggage. Therefore, as long as the Financial Secretary cannot genuinely promote the local community economy, the spirit of localism he spoke of was bogus. He is using the name of localism to strengthen his position and then exercise the public power to share the spoils and get benefits. Such actions should be condemned. People Power will expose the injustice and ugliness of the Government through filibustering and other tactics, so that the people can see clearly for themselves the hideous and ugly face of bogus advocator of localism.

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DR HELENA WONG (in Cantonese): President, the Commission of Inquiry into Excess Lead Found in Drinking Water (the Commission of Inquiry) will issue a report in May, and all departments involved are now probably waiting to see what ruling and advice the Commission of Inquiry will make. Probably due to this reason and mindset, when I, in examining the Estimates of Expenditure of the Budget, put questions to government departments involved in the lead-in-water incidents on the follow-up actions, expenditure and future work, the Government invariably indicated that studies on how to follow up drinking water safety will only be conducted after the release of the inquiry report in May.

Under such a shield, many tasks that should be carried out have been shelved. According to the Commission of Inquiry, not only children aged eight or below need to have blood tests, children aged nine to 12 may also be affected. However, the Government had only conducted blood tests for children aged eight or below, leaving children aged nine to 12 to their own devices. Why does the Government not conduct blood tests for these children? Is it true that actions will only be taken after the release of the inquiry report?

In addition, the experts of the Commission of Inquiry have collected water samples from estates where the Government claims that the drinking water contains no lead, and they have detected that drinking water in some of these estates contains lead. This being the case, why has the Housing Department not taken immediate follow-up action on its own initiative to examine if it has overlooked other estates apart from the 11 estates in question? The Department has taken no action to make any verification. Apart from "waiting for 'Uncle Fat'", the Government is now waiting for the release of the report of inquiry into the lead-in-water incidents. Nowadays, the Government simply takes no action other than waiting.

When conducting sample tests on drinking water in schools, we have accidentally detected that water in electric kettles might also contain lead or even excessive lead, for sources of drinking water had been contaminated. However, it turns out that electric kettles are not subject to any statutory regulation. In other words, whether drinking water in electric kettles is contaminated or not is actually not subject to any statutory regulation. May I know what the Government is waiting for in this case? Why not conduct a study expeditiously on the enactment of legislation to plug the loophole?

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I have even requested the Food and Health Bureau, the Water Supplies Department and the Development Bureau to collect water samples from food establishments to examine whether drinking water in electric kettles contained lead, but the Government has not done so. It has merely issued guidelines on how to clean kettles and urge people to buy accredited brands. However, the current problem is that electric kettles are used in many food establishments in Hong Kong, but shopkeepers really do not know whether drinking water therein contains lead, and people patronizing such food establishments are completely clueless whether there is any problem with the drinking water. For this reason, all government departments are waiting for the report to be released in May. May I ask whether the Government has fully halted its operation? Is it true that there is no task it can perform on its own?

I would like to talk about organic vegetables, which the Government has been promoting all along. Organic vegetables produced on the Mainland and locally are put on sale in Hong Kong every day, and among the self-claimed organic products, some are certified while others are not. That said, according to a recent survey by the Consumer Council, pesticide residue levels that exceeded the limit set under the Hong Kong law were detected on some samples of self-claimed organic vegetables or organic vegetables certified by Mainland or local certification companies. Supposedly, no pesticides should apply in organic farming. Why then were pesticide residues detected and why did the levels exceed the limit? One explanation is that pesticide residues probably arise from environmental pollution.

In fact, we have ultimately realized that the problem lies in whether there are clear criteria and standards for the certification of organic vegetables. No one seems to know whether there are any clear standards. The absence of any clear standards may lead to dire consequences. The Government requires that organic vegetables must be certified by certification companies, but it turns out that there are no standards for such companies to comply with. What criteria are adopted in conducting the certification? For this reason, the Government must expeditiously respond to public aspirations. Otherwise, people who are willing to pay more for certified organic vegetables for their own and their families' health and safety sake may end up being deceived, for what they believe to be organic vegetables are no different from ordinary vegetables and may likewise contain excessive pesticide residues. As such, the Government must play various roles in connection with this issue. In this year's Budget, we fail to see any allocation of provisions or resources to clarify the standards for the LEGISLATIVE COUNCIL ─ 13 April 2016 7331 certification of organic vegetables. There are no statistics indicating the performance of any such tasks.

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

Next I would like to talk about food imported by sea. In early March last year, the Centre for Food Safety (CFS) announced that it detected a small amount of carrots imported from Chiba, Japan for sale in Hong Kong. Following the Fukushima incident, the Government had prohibited the import of agricultural produce from five Japanese prefectures, one of which is Chiba. Subsequent investigations revealed that such food had been imported into Hong Kong by sea and via container terminals. It turns out that no food inspection checkpoint of the Food and Environmental Hygiene Department (FEHD) has been set up at the container terminal, and no FEHD staff members have been deployed to station there. We cannot help but ask the following questions: of the large quantities of products delivered to Hong Kong in containers every day, how many of them come from the Japanese prefectures on which the ban applies? Are tests conducted on the radiation level of such products? How long does it take the FEHD to discern the entry of banned food products into Hong Kong? Given the stipulated declaration period of 14 days for imported food products, does the FEHD have sufficient time to deploy staff to warehouses and conduct tests to determine whether the products have been contaminated by radiation? It is possible that before the arrival of FEHD staff to the warehouses, such products are already put on sale at the Yau Ma Tei Fruit Market.

Following the carrot incident that occurred early last year, another incident of its kind occurred on 1 April this year, involving a total of 337 cartons of frozen beef illegally imported from Japan. I mentioned this issue at a meeting of the Panel on Food Safety and Environmental Hygiene held yesterday. In fact, at an earlier time, we had already pointed out this loophole in the Panel and alerted the authorities to the need of taking targeted actions. The Government subsequently accepted our proposal and set up a food inspection checkpoint at Kwai Chung Customhouse. In the 1 April incident, the FEHD and the Hong Kong Customs & Excise Department conducted a joint intelligence-based operation and again successfully seized food products (frozen beef) imported from the Japanese prefectures on which the ban applies. As I said yesterday, the problem of illegally imported food products is serious, for such products can be branded "five-have-nots food products": no licences on the part of importers, no health 7332 LEGISLATIVE COUNCIL ─ 13 April 2016 certificates for importation, no tests conducted locally, no radiation-free certificates, and noncompliance with existing statutory requirements.

Since the CFS has already set up a checkpoint at Kwai Chung Customhouse, how come illegal food products have still been imported into Hong Kong? Despite the presence of the relevant hardware, has the Government allocated resources to increase manpower, so as to enable the FEHD to deploy its staff to station at the Kwai Chung checkpoint and play a gate-keeping role for the import of food products?

I have been a Member for only four years, but what message have I got at the Panel on Food Safety and Environmental Hygiene during this period? Following the Fukushima incident, the Government told us that all food products imported from Japan must undergo tests on their radiation levels, no single batch of products could evade such tests, and in particular no food products from the said five prefectures could be imported. However, it has been proven several times, not just one or two times that such food products can be imported into Hong Kong, even via importers who have no licence. Fortunately, the authorities received intelligence, or else the food products would have been consumed by the public. In fact, we very much hope that the Budget can show us that the authorities attach great importance to food safety, including whether food products have been contaminated by radiation. However, in this year's Budget, the authorities have committed no designated financial or manpower resources for the work on improving food safety.

I would also like to talk about the problem of education. Regarding the Budget this year, I myself as well as many people whom I have come into contact are most dissatisfied with the proposal in the Policy Address to inject $1 billion into the scholarship fund to offer scholarships to students from the Belt and Road countries to pursue education in Hong Kong. The proposal is simply inconceivable! As the Secretary for Education is present, I hope that he will seriously tell LEUNG Chun-ying that Members have received a lot of criticisms and complaints from members of the public. I once criticized LEUNG Chun-ying's Policy Address, saying that it is not a policy address from the stand of Hong Kong, but rather a mayor's report on the Belt and Road Initiative. The reason is that LEUNG Chun-ying has failed to adopt the stance of Hong Kong people when responding to the expectations of local parents and students on the application of education resources.

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The Budget and the Policy Address are consistent in this connection. On education, the Belt and Road funding programme for exchanges has been proposed. The Government will lavishly spend $1 billion to subsidize students from the Belt and Road countries to study in Hong Kong. While many students in Hong Kong are eligible for university admission, the Government has not increased the number of publicly-funded degree places. For students who have sat the Diploma of Secondary Education Examination and are qualified for university admission, the Government fails to provide them with sufficient places, such that they and their parents have to seek other opportunities to pursue further education, such as self-financing degree or associate degree programmes, for which the Government offers little financial assistance. Though the Government undertakes to extend loans to these students, they will be burdened by heavy loans even after graduation.

If the Government intends to subsidize students from other countries to pursue university education in Hong Kong, the premise should be, in my view, all local students eligible for university admission are offered places, or all local university students need not pay any tuition fees. When the fiscal reserves of Hong Kong are abundant enough to meet the premise, the Government can then allocate resources to help students from other countries to pursue university education in Hong Kong. But that is not the case at the moment. For years the Government has been strictly restricting the number of publicly-funded degree places at 15 000 each year. For this reason, the Secretary for Education is really disappointing, for he has not sought to change the status quo by committing more resources in the Policy Address and the Budget for the education of local students.

At the Panel on Education, Members noted the same predicament faced by headmaster, teachers and administrative assistants of primary schools. They criticize the Government for failing, over the years, to review the pay structure of primary school teachers and headmaster and to assess if the number of administrative assistants is adequate. At the hearings of the Panel on Education, some primary school teachers indicated helplessly that the salary of a primary school headmaster was roughly the same as that of a senior teacher in a secondary school. In addition, even if a school intends to employ an administrative assistant to handle the accounts, it lacks the resources to do so. In response to all these criticisms, the Government merely indicates that it has no plan to conduct any reviews. This is indeed infuriating.

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Why does the Budget accord no priority to taking care of local students receiving primary education in Hong Kong and their teachers? How come our limited resources are not committed to nurturing our local students? I understand that due to globalization, some students in Hong Kong have different cultural background. While it is desirable to widen students' international horizon, is the Government putting the cart before the horse by spending $1 billion to subsidize students from other countries to pursue university education in Hong Kong, instead of providing assistance to primary school students in improving the quality of education?

Some also propose that instead of spending $1 billion to subsidize students from other countries to pursue university education in Hong Kong, why not provide subsidies to Hong Kong students to pursue further education in Hong Kong or in other countries. Will this help Hong Kong people more?

The situation of child care services is just the case. After conducting studies in many districts and seeking information from the Government, I come to realize that whole-day standalone child care centre services are in most demand, but the number of the relevant places has stood at several hundred for many years, or with a slight increase. Why does the Government not pool resources together to provide quality and affordable child care services, so that parents can rest assured and families can get the help they need? The Government has failed Hong Kong people in all these areas.

Deputy President, I so submit.

MR TOMMY CHEUNG (in Cantonese): Deputy President, the Financial Secretary has treated the catering industry fairly well this year and has responded to the demands of the Liberal Party and me. Last year, to offset the impact of the Occupy movement, the Financial Secretary waived licence fees for restaurants and hawkers and fees for restricted food permits for six months. This year, as a short-term relief measure for the industry in response to the economic downturn, the said licence fees are waived for one year and the business registration fees are also waived for one year. Though the Financial Secretary has not acceded to all the requests of the catering industry, we are already happy enough.

While there is an economic downturn in Hong Kong, the global economy is still in the doldrums, so we must be psychologically prepared that difficult days will remain for some time.

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Deputy President, I have been very supportive of the Financial Secretary. Last year, when he proposed the food truck concept, I said that I would render support. I have not been engaged in the local catering industry for almost two decades, but as a token of support, I will try to get involved. However, upon learning recently that the food truck business could not make profits but would incur losses, my wife asked me if I have become muddle-headed as I get older. She queried why I intended to run a business that would incur losses. After learning the details of the two-year Food Truck Pilot Scheme launched by the Government, I become more worried about the investment. As I was initially interested in food truck operation, it was not appropriate for me to express my views at that time. Yet, after the Scheme is introduced, many industry players have reflected various views to me, expressing the difficulties and hardships involved. I am obliged to discuss this issue on their behalf.

Last Thursday, the Oriental Daily reported extensively on some of the problems that might be encountered by food trucks. The location problem has attracted the most criticisms. There are time limits to visitor flows. Even though some think that Disneyland is the best location, it turns out that there is a "dead space" within the park where not many people will go there. I believe it is also difficult to locate that place. If the Financial Secretary does not believe in my words, we can visit Disneyland together to observe the visitor flows to the selected site. It would be best if we go there on Saturdays or Sundays when there are higher visitor flows.

Some members of the industry told me that they want to attract foreign tourists by selling gluten-free food. However, if their food truck is parked at the Wong Tai Sin Square or near the Kwun Tong Promenade, they may not be able to make any profit. In some places, the electricity tariff and water charges are high, and coupled with the monthly venue fee of $9,200 to $22,000, it is difficult to sustain the business.

I certainly understand that the authorities have to take into consideration the interests of restaurants which pay high rents, and it is not easy to identify suitable sites for food trucks. Can some flexibility be allowed? For example, can food trucks be allowed to make appropriate deployment according to their special features, so that they do not have to comply with the rigid requirement of parking at the same site for one and a half months? Or, in the case of the Golden Bauhinia Square, there are very low visitor flows after 7 pm, can food trucks be allowed to park at housing estates where there are no restaurants? Can other venues with higher visitor flows be considered, such as construction sites 7336 LEGISLATIVE COUNCIL ─ 13 April 2016 where shopping centres have not yet opened, industrial estates, parks or public piers?

The target customers are different from place to place, and hence different menus should be provided to cater for their needs. In terms of marketing strategies, menus should be constantly updated to give customers a sense of novelty. If some dishes do not sell as well as expected, contingency measures must be taken. Hence, I think it is impossible to disallow changes in dishes within two years.

Do some venues have sufficient power supply? Can food trucks carrying one or two LPG cylinders pass through cross harbour tunnels? Later I will provide a detailed list of questions to the Commerce and Economic Development Bureau, so that careful consideration can be made to find a solution.

Deputy President, Secretary for Commerce and Economic Development Gregory SO said that there is no plan to extend the Individual Visit Scheme (IVS) to other cities. This industry is thus disappointed. I do not object to the principle that quality but not quantity counts, but exactly due to this principle, the IVS should be extended to more Mainland cities. As such, residents of these cities can visit Hong Kong under the IVS and we can attract more overnight IVS visitors with higher spending power.

Frankly speaking, if the image of Hong Kong remains bad and there is an increasing number of "Hong Kong independence" protests, targeting at Mainlanders, even if the IVS is extended to more Mainland cities, visitors may not come to Hong Kong; who would pay for feeling miserable? I hope members of the public, especially young people, would give us some room. We will continue to urge the Government to enhance the receiving capacity of Hong Kong, and we should make concerted efforts to rebuild the positive image of Hong Kong as a hospitable travel destination.

Deputy President, the authorities must act according to circumstances, do what should be done and refrain from doing what should not be done. For example, the authorities should not take the following measures: conduct a review on minimum wage; introduce standard working hours; increase statutory holidays, public holidays or paternity leave; reduce gradually the use of MPF contributions to offset severance payments. All these measures will adversely affect the business environment and add to the difficulties facing the industry. I call upon the Financial Secretary to use his influence to affect the Directors of LEGISLATIVE COUNCIL ─ 13 April 2016 7337

Bureaux concerned, especially the Secretary for Labour and Welfare, so that they would no longer introduce policies and measures that may harm the business environment.

The issue of licence application has always been denounced. According to the 2015 statistics, it took 170 working days to process a restaurant licence application and 63 working days to process a temporary licence application. The average processing time for a liquor licence appeal was 97 days and the processing time for an open air cafe was as long as 15 months. The processing time also tends to become longer and longer. Regarding the applications for liquor licence and open air cafe, the authorities tend to give more weight to the opposing views in the district; thus many problems have constantly arisen. Moreover, the appellants are unreasonably treated and the situation is worsening.

The industry earnestly hopes that the authorities would act practically and actively break down barriers to provide more opportunities for small businesses. All along, the authorities have said that it would review various fees and charges, and departments have been asked to cut expenses, but the existing services have not been improved. This is unconvincing.

I have mentioned time and again that the authorities should consider extending the validity period of liquor licences to two years and extending the licence renewal time for restaurants with good records, so as to reduce the workload of the departments concerned, thereby deploying manpower to speed up the processing of other applications. This is a feasible practice and I hope the authorities would give serious consideration to it.

Deputy President, the catering industry has strong views on the Supplementary Labour Scheme of the Labour Department. The industry mainly imports senior chefs through this Scheme but the success rate is low, the formalities are complicated and the vetting time is long. According to some industry players, it takes nearly a year before they can have the application results. Yet, as the appointed chefs are only permitted to work for two years, the pressing problem can hardly be solved.

Deputy President, owing to the overly high increase rate of minimum wage in recent years, many restaurants can only afford to increase the wages of low-paid employees as required by law. The rippling effect should also be taken into account. As restaurants cannot afford to increase the salaries of employees at senior and intermediate levels or can only afford a small increase rate, their pay 7338 LEGISLATIVE COUNCIL ─ 13 April 2016 levels are getting closer and closer to those of employees at junior level. As a result, many junior employees do not want a promotion and some senior employees prefer finding another job with less pressure. In any case, the wage difference is not big. In addition, many employees at senior and intermediate levels and even the employer have to take up the dishwashing work. Hence, the industry has to face problems of increasing work pressure, low morale, and a sharp decline in the quality of services and products.

According to the Smiling Report on participating companies published last week, Hong Kong ranks the lowest among 37 countries or regions. An alarm has been sounded. If Hong Kong wants to maintain the good reputation as a "gourmet paradise", we cannot rely solely on the dishes, other elements such as the overall atmosphere, food quality, service standards (including smile) and sanitation are equally important.

In fact, minimum wage has brought about many problems for the catering industry with low gross margin. In the past, the catering industry did not need to recruit employees after April, but this year is an exception. Many employees have joined other industries, the catering business is shrinking and new investment is not available. Labour groups may not bother but if we do not take the opportunity to import workers for trades with a shortage of manpower, the trades which have disappeared will not reappear, and workers themselves will eventually suffer losses.

Deputy President, according to the authorities, the average construction cost of public rental housing (PRH) units increased by 20% in 2014-2015 as compared with 2013-2014. It is expected that the cost will be on the increase in the next five years. If a comparison is drawn between 2019-2020 and 2014-2015, the related costs have doubled. Wool comes from sheep and money comes from taxpayers, so the authorities must step up the control of cost increases.

All of us should have noticed that the number of applications for PRH is on the increase, and the waiting time for allocation of PRH units is getting longer and longer. Moreover, the percentage of labour costs for the construction of PRH units in the overall costs has increased from 35% to 40% from 2013-2014 onwards. Why should we not accept the Liberal Party's proposal to relax the importation of labour policy for the construction industry, so as to support public housing development and create an all-win situation?

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Deputy President, I often say that the Housing Authority (HA) is the best landlord. Recently, when Secretary for Transport and Housing Prof Anthony CHEUNG responded to an issue relating to Link REIT, he said that after the HA had divested the properties, Link REIT was given the autonomy in business operation; the Government and the HA thus did not have any role to play. I was disappointed.

More than 30 years ago, I was impressed by the Piazza di Spagna in Rome. It was a very unique place. There were many shops with Italian characteristics. But when I visited Rome again two years ago, I noticed that a large famous brand store took up a few shops inside the Piazza di Spagna, making the place no different from any shopping centres in Paris, London, Frankfurt or New York.

The impact of globalization has affected all parts of the world and we definitely cannot do look on with folded arms. I do not want the shopping centres under the HA to be completely the same as the shopping centres under major developers such as Cheung Kong, Sun Hung Kai or Wharf. The monopolization by Link REIT has brought about the degeneration of the shopping centres in many housing estates. I advise the HA to serve as the last line of defence for small commercial tenants with limited capital. It should only rent its retail facilities to individual operators doing neighbourhood business. It should never rent its facilities to large corporations for the convenience of easy management. It should never blindly follow the bureaucratic practice of "doing less and making fewer mistakes", thereby neglecting its corporate social responsibilities.

It is known to all that I have strong views on the Environment Bureau since 20 years ago. The then Secretary for Planning, Environment and Lands, Bowen LEUNG, blackmailed the catering industry by using the deceptive trick of "polluter pays", requiring us to bear more than 80% of the Trade Effluent Surcharge. His act had motivated me to participate in politics ever since. Yet, the authorities concerned are still stuck in the old ways today without making any changes.

When this Council discussed "three landfills and one incinerator" last year, I pointed out if could we ask the business community to consider undertaking the investment, design and handling of the said facilities while the Government was only required to pay the handling fees. Yet, the Government said that it was not familiar with such a mode of operation. Hence, it sought a funding of $1.5 billion from the Legislative Council for hiring people to build and manage 7340 LEGISLATIVE COUNCIL ─ 13 April 2016 the facilities. But now, the authorities are afraid that they may not be able to collect food waste. The catering industry has recently relayed to me, according to the Secretary, if the catering industry do not divert food waste and transport them to Siu Ho Wan, a high charge will be levied in the future. This is a tactic commonly used by the authorities ― I do not know if what the industry told me is true but I notice that the Under Secretary is present.

I am concerned about the above situation. I also hope that the Government would not frequently intimidate the catering industry, charging us on the basis of the "user pays" principle. Since the rates we paid actually include refuse handling charges, the Government should not often ask us to pay various other charges. As the operating costs of the catering industry, including rents, wages and prices of goods, have continued to soar, even if we increase the charge, it may not be sufficient to offset the cost increases. Moreover, the industry players are also required to pay various environmental fees, how then can small and medium restaurants remain in business?

Let me advise the authorities. It will not be effective to ask the public to reduce waste through deterrent measures such as fee charging. The Government should provide incentives and improve the supporting measures in order to achieve the waste reduction objective. Take glass bottle recycling as an example. The departments concerned such as the Food and Environmental Hygiene Department may co-operate with the districts. In each district, many spots should be set up for collecting refuse for recycling. Can a recycling system be established so that the industry or the public may bring glass bottles to these spots for recycling and get some money in return, just like what happened when we were kids? At present, the Government only pays NGOs to collect glass bottles; what should I do if the NGOs do not collect glass bottles for recycling from my restaurant?

According to the Government, the payment of a few cents have now caused an uproar, in future the amount involved may be a few dollars or dozens of dollars. Actually, money is not the prime concern. So long as I can hand over glass bottles to the Government and collect some money in return, that will do. Nonetheless, it seems that the authorities have chosen the easiest solution of introducing a levy on glass bottles, disregarding how these bottles are recovered.

Deputy President, I so submit.

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MR KENNETH LEUNG (in Cantonese): Deputy President, I will first make a general comment on the Budget, and will then move on to discuss a few major topics, namely regional economic development, cost overrun for infrastructure projects, financial technologies and green finance. This Budget of the Financial Secretary has actually provided a new direction for Hong Kong's economic development, but I do hope Mr John TSANG, as a Secretary of Department, will assume a more proactive role in the long-term planning of public finance and the direction of long-term economic development. For example, we notice from the projected demographic structure in 2030 that one in every three people will be over 65 years old; this will impose immense financial pressure on the Government.

In fact, every time we discuss the Budget, many professionals, including economists and financial experts, will remind the Government year after year to review the tax regime to see if our tax base is too narrow. Of course, whenever we touch on the issue about tax base, many political parties and groupings will ask whether this implies an increase in tax. The truth is, broadening the tax base does not seek to impose a heavier burden on the public, but merely to make people who can afford to pay more tax. The hefty fiscal surplus is indeed an opportunity for us to explore if there are ways to broaden the tax base, so that the annual revenue will not be adversely affected by the global economic cycle.

One part of the Budget has used "New Economic Order" as the heading, which highlights how breakthroughs in innovation and technology development has brought about the paradigm shifts in different economic and social spheres, changing our daily lives and business modalities. Amid such global paradigm shifts, adjustments have to be made in the Government's policies and roles as well as regulatory regimes accordingly. Another key factor contributing to Hong Kong's future economic development is the availability of local talent to tie in with the major trend in this decade or so.

Hong Kong's professional services, such as accounting, legal, engineering, construction and healthcare, are the cornerstone of Hong Kong's success. Their attitude towards work and professional ethics have not only safeguarded the core values of Hong Kong, but also strengthened our competitiveness in the long run. The future planning and training needs of human resources, which emphasize the integration of knowledge and new technology, requires the professionals to possess an international vision. Apart from economic activities, another economic mode of Hong Kong is the export of these kinds of professional services to different parts of the world.

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In the following, I will discuss regional economic development. While the Policy Address has put too much emphasis on the discussion of Belt and Road and how to complement or facilitate the nation, the Budget has provided a reasonable positioning for Hong Kong in the world. Finding new markets and actively entering into free trade agreements with other countries are appropriate initiatives to avoid over-reliance on a single market. As an international city, the Hong Kong SAR should face the world and upgrade our global visions, so as to let people of the rest of the world know the kind of services that Hong Kong can provide for them.

In respect of manpower training, all students must have global visions and exposure to the cultures of different countries, they should avoid limiting their vision to Hong Kong alone. There is no doubt that the local culture is an intangible asset worthy of preserving and promoting, but in order for Hong Kong to keep in line with the international standards and compete with the rest of the world, it is essential for us to have international visions. Hence, the internship scheme funded by the Government should not only cover China or ASEAN countries, but must be extended to different parts of the world. Furthermore, the Government may also consider providing financial subsidies for continuing education, so as to enable the people of Hong Kong to take continuing education courses, with a view to enhancing their knowledge in global financial and political affairs, and enabling them to learn foreign languages and understand foreign cultures.

Next, I would like to talk about the cost overrun of infrastructure projects. Last year, the Financial Secretary set up a task force to examine the causes for the rising costs of public works projects. This year, he went further to ask the Development Bureau to establish a multi-disciplinary office to conduct a comprehensive review of the guidelines on public works, reduce unnecessary design and contractual requirements, as well as closely scrutinize the cost estimates of new projects and the tender assessment system.

Deputy President, as we all know, the problem of cost overrun of public works projects has become increasingly serious in recent years. For example, the Express Rail Link Project has a serious cost overrun of nearly $20 billion; the Hong Kong-Zhuhai-Macao Bridge has a cost overrun of $5.5 billion; the Shatin to Central Link also has a cost overrun of $4.1 billion whereas that of the Liantang Boundary Control Point project is $8.7 billion. There are indeed too numerous to name. It seems that cost overrun has become a standing practice of the Government, which is absolutely unacceptable to me. Even if Hong Kong is LEGISLATIVE COUNCIL ─ 13 April 2016 7343 sitting on a huge surplus, we still need to be prudent from a financial management perspective.

I agree with the fiscal discipline exercised by the Financial Secretary in reviewing the expenditure of public works projects, but it is necessary for the Governments to conduct one or two interim reviews of major works projects during construction, and avoid seeking funding approval from the Finance Committee of the Legislative Council only when the project is near completion or experiences cost overrun. In fact, it is very important to conduct interim reviews because during which we can examine whether the expenditures adhere to the Government's principles and standards of value for money.

In this part, I would like to talk about financial technology (Fintech). Promoting the development of Fintech may bring about significant changes to the traditional industries as well as people's daily life and consumption pattern. For example, the blockchain technology mentioned by the Financial Secretary can be applied to jobs requiring accounting functions, thereby drastically reducing the time and cost required of cash flow. At the preliminary stage, the blockchain technology can be applied to the trading platforms. In the future, however, it may bring about a complete change to the professional service sector, which includes banks and financial companies, by dramatically reducing the human and material resources required of finance work. In fact, the world's largest stock markets, namely NASDAQ, and JPMorgan Chase, have announced the conduct of trials using blockchain technology in their headquarters or branches.

Last week, I asked the chairman of an accountant association, who came from the United Kingdom, if artificial intelligence and automation would have any implication on the future prospect of professional services. While there may be some changes in the requirement of knowledge, two factors have made various professional services indispensible in the long run. First, both artificial intelligence and automation cannot replace human beings in decision-making, nor can they make comprehensive and practical risk assessment. Second, our professional service requires communication, contact or data transfer between persons. I cannot imagine what it would be like 20 years later when all commercial decisions are made without using services of professionals but simply by entering the necessary data into the computer. After all, it is human nature to have contact with another person. Thus, with regard to the training of students and professionals, we must focus on communication skills and international visions while stressing the importance of technology development.

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Given that Fintech has been developing rapidly, it would be difficult for members of the public to get a good grasp of the latest situation. In Hong Kong, there are numerous cases in which members of the pubic have been cheated of their money due to a lack of knowledge about Fintech products. These deception cases have seriously undermined public confidence in Fintech products, thereby hindering the popularization and development of such products and services. In my opinion, the Government is duty-bound to ensure that the relevant laws and regulations do keep abreast of the times, and step up education to enhance Hong Kong people's understanding of Fintech development.

I also wish to talk about green finance. Green finance has developed rapidly in China and the rest of the world in recent years, and new issuances of the green bond market reached as high as US$37 billion in 2014. The Budget also mentioned that Hong Kong needs to highlight our edge in developing green financial products. In fact, last year and even the year before last, I had already urged the Financial Services Development Council to carry out studies on the development of Hong Kong's green finance, so as to firmly grasp the opportunities offered by green bonds around the globe. Hong Kong is not only a place for investors around the world with a mature financial market, the cost of bond issuance also compares favourably with that of Beijing, Shanghai or other overseas countries. Earlier on, there is news that Hong Kong may become a member of the Asian Infrastructure Investment Bank this year, we must therefore be familiar with the unwritten rules of green finance and capitalize on the opportunities as soon as possible.

To ensure that the issuance of green bonds will not be abused, the proceeds must be used to finance green projects that genuinely help protect the environment. Hong Kong must first formulate a set of criteria for determining green bonds, or make reference to the international criteria for green bonds. In this connection, I hope that the Government will undertake this task as soon as possible. Furthermore, knowing that China will launch a nationwide carbon emissions trading market in 2017, Hong Kong should also get hold of the opportunities to develop the said market, with a view to emerging as one of world's major carbon emissions trading markets. Green finance is not only a new trend of Hong Kong's financial development, but also essential to our living environment. Hong Kong should make use of the existing strengths to catch up, so that we can be fast enough to seize the opportunities before London or other financial centres.

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Last but not least, the Financial Secretary has talked about Hong Kong's film development and cultural industry at great length. In fact, I have recently watched a number of very good movies produced by Hong Kong, and I chose to watch all of them in cinemas to learn about the reaction of the audience. Recently, there are several local movies that are very creative, which might attract large audiences, for example, Pot of Call, Ten Years, Mobmothers, Trivisa and the upcoming Robbery, each one of them represents a part of Hong Kong's culture. Apart from the policies mentioned by the Financial Secretary in subsidizing local filmmaking, I hope that the Government will define the position of our cultural industry, which includes the Cantonese file industry, so as to enable it to gain access to the markets in Guangdong Province and Cantonese-speaking areas. Meanwhile, we hope that the Government will inject an additional funds into the Film Development Fund, such that local producers and actors can apply for funding from the Fund more easily.

On the other hand, the HKSAR Government has not done anything to explore overseas market, including the Southeast Asian market. While Hong Kong's television drama series and movies were very popular in Southeast Asia in the 80s, this is no longer the case. Instead, there is now a craze for Korean movies and drama series in Southeast Asia. For example, a recent drama series called The Descendent of the Sun, which I am not sure of the story, has attracted large audiences. Therefore, it is duty-bound for the Government to enable Hong Kong's local culture to face the world and export to the world.

Deputy President, I so submit.

MR CHUNG KWOK-PAN (in Cantonese): Deputy President, when I attended a dinner last night, a business friend operating a small and medium enterprise (SME) told me that the Hong Kong economy is in a very bad shape and he was pretty worried about the adverse business environment. Even the richest man of Hong Kong has pointed out that the current local economic or business environment are at the worst in 20 years.

Many people will naturally ask, "Is it even worse than the SARS period?" If we take a look at the SARS period, we may notice that only the tourism and catering industries, domestic consumption and retailing were affected at that time. 7346 LEGISLATIVE COUNCIL ─ 13 April 2016

For people who engaged in export trading like us, business was actually pretty good at that time. Deputy President, since you also engage in the export business, I trust you should remember that business was quite good back then. Subsequently, with the onset of the financial tsunami in 2008 and 2009, there was a downturn in the world economy and our export business was hard hit. However, thanks to the implementation of the Individual Visit Scheme (IVS), the performance of our economy, including the tourism, retail and catering industries, was not bad at all. In other words, judging from the past experience of Hong Kong, it is possible that while the performance of certain industries was bad, some did great. But if we look at 2015, the performance was bad across the board. Data of different industries, be it export, catering or retail, showed that the situation was not good, even the tourism industry is no exception. What should we do then?

Of course, the Financial Secretary had noticed the problem long ago and therefore provided tax rebates of more than $4 billion last year. Tax rebates of some $38 billion will be provided this year, benefiting the middle class and SMEs. Many grass-roots people complain that they have been neglected, and query why only the middle class and SMEs will be benefited. In fact, the objective of providing tax rebates is to give rise to a wealth redistribution or economic effect. If the middle class and SMEs plough the $30-odd billion of tax rebate back to the economic system, a "multiplier effect" will be produced. Not only can this help stabilize the local retail, economic and catering industries, but may also prevent the GDP from plunging as this initiative accounts for about 1% of the GDP. I think this helps to a certain extent, even if the entire sum of $30-odd billion may not be spent in one go. In view of this, I hope that the few Members engaging in filibustering will stop as soon as possible, so that the Budget can be passed expeditiously, thereby enabling the $30-odd billion to be returned to the community at large. Once the money is returned to people at their disposal, it would remain and continue to operate in the economic system.

Earlier on, I mentioned that yesterday, a friend operating an SME expressed concern about the possible cash flow problem arising from poor business, and I think this is the problem that many small operators will encounter in the future. As such, the re-launching of the SME Financing Guarantee Scheme (SFGS) is good. Nonetheless, as we have said time and again on different occasions, though the SFGS has been introduced, but how effective it is? LEGISLATIVE COUNCIL ─ 13 April 2016 7347

As different Members have just mentioned, many banks are reluctant to provide loans under the SFGS at present. Why is this so? If an enterprise has the capacity and financial viability, banks will offer loan to it even in the absence of the SFGS; but if an enterprise lacks capacity and experiences business downturn and cash flow problems, banks will naturally refrain from offering loan to it, fearing that the guaranteed loan may bring about some consequences, or they will be held responsible if the enterprise closes down.

However, given that under the SFGS, the Government has already offered a loan guarantee of 70% to 80%, so what are the banks afraid of? According to past experiences, the loans are either irrecoverable or compensation will only be granted one year later. I have just obtained some figures from the Government last week, which indicated that of the 200-odd claims made in 2015, only four were approved and some 240 cases were pending approval. When banks find that it is so difficult to recover the loans, they will certainly stop giving out loans to save the trouble of chasing after the Government and the Hong Kong Mortgage Corporation Limited (HKMC) for the arrears. It is learnt that among the 200-odds claims, only four cases in respect of which the processing were completed and payments were made. There is no doubt that the outstanding claims will be dealt with in the future, but the problem is, when the processing will be completed. In that case, it is all too natural for banks to refuse providing loans or show no interest to provide loans. It is therefore necessary for the HKMC to relax the relevant procedures. The Government has expected to pay the default loans when it introduced the $100 billion SFGS, which is precisely the function of the Government, or else the SFGS is useless and cannot help SMEs at all. Although last week Secretary Gregory SO has written to banks to encourage them to provide loans, it is important for the Government or the HKMC to relax certain requirements and remove all the stringent procedures. Only in so doing can it genuinely help SMEs tide over their financial difficulties during the economic downturn.

Deputy President, the Budget has also mentioned different policies. The one-month rental waiver provided for public rental housing (PRH) tenants last year, for example, is no longer found in this year's Budget, which has certainly upset some people from the grassroots. But the truth is that the Financial Secretary has used another way of handing out money, which I think is pretty 7348 LEGISLATIVE COUNCIL ─ 13 April 2016 brilliant, and that is, waiving rates of $4,000 per household for one year. As the average monthly rental of a PRH unit is about $2,000, the amount of rate waiver is actually greater than that of rental exemption, and is therefore more beneficial than the one-month rent waiver. Thus, if Members take a closer look at the Budget, they will find that it has also given some benefits to PRH tenants.

Deputy President, budgets of the recent two years have both mentioned the textiles and garment sector which I represent. For example, a dedicated fund of $500 million was set up last year, and some concrete plans have been launched to promote the development of the industry this year. In this connection, I have to thank the Government on behalf of those young designers and new brands for fully adopting the proposals put forward by the industry, with a view to restructuring the traditional textile and garment industry into a fashion industry.

More importantly, as Mr Kenneth LEUNG has said earlier on, while the success of Korea's soft power as well as film and television industries are attributable to government funding, the success also owes much to the joint efforts of the film and fashion industries to promote and work with each other. Given that costume design is essential for film production, thus if the fashion circle agrees to work with the film industry, which then join hands with the local fashion industry to launch promotion abroad, I think not only Korea can create a "Korean craze", the world will also be hit by a "Hong Kong craze". Korea has not even started when Hong Kong's film and fashion industries took off in the 1980s and 1990s, so how can it overtake Japan, not to mention Hong Kong, within just a decade or so? This is certainly attributable to the industries' efforts and government funding. I therefore hope that Hong Kong's fashion and film industries will, with financial assistance from the Government, work hand in hand and develop at the same time, instead of going it alone. In this connection, I have consulted Mr MA Fung-kwok if there is any chance for the sectors to which we belong to make concerted efforts to launch promotion. In my opinion, our two industries have the greatest potential and opportunities to develop in the short term.

Recently, "local" has become a popular word widely used in political issues. And yet, the word "local" does not necessarily relate to politics, but also to the development of the local economy. Why do young people of Hong Kong LEGISLATIVE COUNCIL ─ 13 April 2016 7349 have so many grievances? I wonder if the Government has tried to find out why so many young people or radical young people have expressed dissatisfaction. Recently, I did have a chance to meet with a very radical person. He is truly radical because he was arrested by the Police the week following the meeting. After we met, I found out why he was dissatisfied, the reason is very simple and is related to a particular case. He was gravely dissatisfied with the Government for not granting a licence to Mr Ricky WONG's Hong Kong Television Network Limited (HKTVN). The HKTVN has already hired a lot of employees, and among them is that young person. He lost his job because the HKTVN was not granted the licence, and for that reason, he was indignant. He said, "How ridiculous, the HKTVN is obviously qualified for the television licence. It is so well prepared for the licence and has recruited the necessary staff. Yet, the Government suddenly refused to grant a licence, and because of that, I lost my job". His anger then drove him to the street. This is nonetheless just one example. Members may not have looked into or studied why some young people are filled with grievances, but I call on the relevant department of the SAR Government, whichever it is, to communicate with the young people, especially the more radical ones. They may ask what will happen in 2047 because they are eager to know their future when they are in their forties or fifties by then. Unfortunately, many of the policies introduced by the Government have ruined their perceived promising future.

Therefore, in respect of economic activities with local characteristics, if the Government had rationalized the policies, I believe many grievances or disputes would not have arisen and we would not have come to such a pass. At present, many foreign investors are taking a wait-and-see attitude towards Hong Kong, considering whether or not they should continue to invest in Hong Kong. The local business sector, on the other hand, is also thinking if the business environment of Hong Kong is still conducive for investment in the future. This is why not only is it necessary for the Budget to touch on giving out money and future development opportunities, it is also important for the SAR Government to consider the above-mentioned issues.

Last of all, though this year's Budget proposes to provide tax rebates of $30 billion, our overall fiscal reserves still amount to $860 billion, and the foreign currency reserve assets now stand at over $3,000 billion. Therefore, I consider it necessary for the SAR Government to explain how it is going to deal with or use 7350 LEGISLATIVE COUNCIL ─ 13 April 2016 the $3,000-odd billion. Will the Government continue to keep the money in the coffers and let it appreciate? However, amidst the various demands from the community for the Government to "give out money" and invest more, why does the Government continue to allow that huge sum of money to sit idle?

Therefore, apart from the above-mentioned fiscal reserves of over $800 billion, I think the SAR Government, either the current-term or the next-term, should give an account of how the $3,000-odd billion foreign currency reserve assets will be used. Will the money be spent on retirement protection and healthcare protection, or used to address the ageing problem? Of course, concerning the ageing population or healthcare protection, the Budget has mentioned the construction of more hospitals, but does that help? Today, there is a news report highlighting the problem of manpower shortage in the obstetrics and gynaecology departments of many hospitals, because many medical students tend not to choose this discipline. What should be done then? The Government should not focus merely on the construction of hospitals, but must take into consideration the issue of talent as well. Although the Hong Kong Children's Hospital at the Kai Tak Development Area has yet to come into operation, it is already known that there will be a shortfall of more than 200 doctors. What can be done then? I therefore hope that the Legislative Council will expeditiously endorse the Medical Registration (Amendment) Bill 2016 so that the issue of talent can be resolved as early as possible.

Thank you, Deputy President.

MR DENNIS KWOK (in Cantonese): Deputy President, I will analyse and comment on the Budget from the perspective of the legal profession first, and then from the perspective of Hong Kong people.

First of all, from the perspective of the legal profession, we commend the Budget. The legal profession highly commends the resource allocation in two respects. First, resources allocated to the Judiciary. Second, resources allocated to the Legal Aid Department (LAD). Let me first talk about the resources allocated to the Judiciary. When compared with last year, an additional $180 million is allocated to the Judiciary in this year's Budget, representing an increase of more than 10%. With the provision, the Judiciary can increase three judicial posts and more than 50 non-judicial posts. As we all LEGISLATIVE COUNCIL ─ 13 April 2016 7351 know, at present, the long waiting time in courts and the heavy workload of judges have sometimes resulted in the failure to uphold justice. As we are aware, if the parties involved in a case have to wait six to nine months or even a longer period of time to get a judgment or to manifest justice, injustice has actually been done to them. Therefore, regarding the foundation of the rule of law in Hong Kong, verbal support is useless, the Government must allocate enough resources to enable the Judiciary to deal with each and every case efficiently, fairly and justly.

In fact, the legal system of Hong Kong is one of the best in the world. According to the latest ranking in terms of the rule of law published by the World Economic Forum, Hong Kong comes fourth, and New Zealand is the only common law jurisdiction which has surpassed us. If Hong Kong wants to maintain an eminent position in China and distinguishes itself, upholding the rule of law is definitely most important. Therefore, we highly commend the allocation of additional resources to the Judiciary and we hope that resources for the Judiciary can be adequately supplemented every year in the future.

(THE PRESIDENT resumed the Chair)

Another aspect I would like to discuss is the resources allocated to the LAD this year. When compared with last year, an additional $150 million is allocated to the LAD in this year's Budget, representing an increase of more than 20%. Under the current political environment, many groups and political parties often criticize the work of the LAD. Some people criticize the LAD for not conducting adequate investigation in vetting and approval of applications for judicial review, or for not acting with professionalism, resulting in people willfully manipulating judicial review and legal aid to challenge the decisions or work projects of the Government. People making such comments do not understand the work of the LAD and they do not respect the professionals working in the LAD. Such comments are actually dealing a blow to our legal system. Thus, we have to right the wrong here. The legal aid system is a very important component as well as one of the cornerstones of the rule of law in Hong Kong.

Regarding the long waiting time in courts and the heavy workload of judges in Hong Kong, one of the reasons why judges often have to spend so much 7352 LEGISLATIVE COUNCIL ─ 13 April 2016 time in handling a case is because many people cannot afford to appoint lawyers and they cannot get legal aid service. Some middle-class people simply cannot get legal aid protection and when they are involved in lawsuits, very often they have to spend every penny they have, thus many people do not want to face this problem. If they are sued, they will need legal aid service. If they cannot get the service, they have to represent themselves. Therefore, legal aid service is indispensible. We are happy to note the substantial increase in the expenditure of the LAD in this year's Budget. I hope that this will enable more people (particularly middle-class people) to get appropriate support and assistance when facing legal problems or getting involved in litigation.

I hope that people who criticize the LAD and judicial reviews can understand how the legal aid system operates. When professionals in the LAD process each application, they will examine if there are reasonable grounds for legal aid to be granted. Even if there are reasonable grounds, an applicant of a judicial review will have to appear before a High Court judge to prove that on the basis of the proposed submissions and arguments of the case, there are realistic prospects of winning the case. This is a very high threshold which is not easy to pass. If the High Court judge considers that there is reasonable arguability and realistic prospects of success in the case, he will grant leave to apply for judicial review. Those who say that the mechanism of judicial review has been abused do not understand or do not want to understand the mechanism. They unreasonably say that the mechanism has been abused, but actually it has not.

In relation to the rule of law, we are pleased to note that this Budget contains more than empty words and the Financial Secretary has made some real efforts. He is not like LEUNG Chun-ying who often talks about upholding the rule of law in Hong Kong, but his remarks are mere empty words. Does he have any supportive policy measures? None. He has done nothing at all. However, in this Budget, we are glad to see improvements in two important areas concerning the rule of law.

To consider the Budget from the perspective of Hong Kong people is the primary responsibility of every Member of the Legislative Council, disregarding whether he is returned by functional constituency or geographical constituency. The Budget should not focus on the concerns of a particular industry or a particular social stratum. Social resources should be allocated in a way that every Hong Kong people can benefit from a major policy or an important area. From this perspective, this Budget is not very controversial, but it is certainly far LEGISLATIVE COUNCIL ─ 13 April 2016 7353 from perfect. I think the Financial Secretary will agree with me. How can we improve the Budget and make it more progressive?

President, I think we should answer the question in two parts. In the concluding remarks of the Budget, the Financial Secretary quoted the words of the former United States President John KENNEDY, "Our problems are man-made, therefore they can be solved by man." However, the crux of the problem is, what challenges are we now facing? What are the problems we have to face? In response to the Budget, I will also quote a saying by John KENNEDY and that is, "If a free society cannot help the many who are poor, it cannot save the few who are rich." The wealth gap will intensify class conflict. This is not a unique and original view of socialism or communism, but a general rule which holds true over thousands of years in history. Hong Kong is an affluent city, but at the same time, its Gini Coefficient is extremely high and the problem of wealth gap is obvious. Our problem lies not in the lack of money, but in the failure to allocate public resources appropriately.

Mr CHUNG Kwok-pan said earlier that Hong Kong at present has a surplus of $800 billion-plus, but have we used the money to resolve the problem or narrow the wealth gap? On this point, does this Budget lack foresight and is it not progressive enough? Certainly, having an unfair system is one of the factors causing the wealth gap. If the Government wants to narrow the wealth gap, it should not just give petty favours or give out "candies" worth hundreds of millions of dollars to the poor or the needy every year because such measures cannot relieve their burden. In the past nine years, the "candies" given out by the Government has amounted to hundreds of millions of dollars, but were there any marked improvement in the lives of the poor? No.

In this connection, I would like to express my views on three prime concerns of the poor, namely education, healthcare and elderly services. First, education, I need not say too much. Education is essential for every young people who want to move up the social ladder, to get out of poverty, to progress with society, and to have the chance to share the economic fruits of society. The problem is: the current-term Government would rather inject $1 billion into a Belt and Road scholarship fund than spend the money on providing education for Hong Kong people and for our children? At present, schools really lack resources. When there is a lack of resources in our education system, why do we have to spend $1 billion on taking forward the Belt and Road scholarship fund for no purpose?

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Healthcare is even more important to the poor. Health is wealth. Poverty and sickness are often interrelated. A good healthcare system will undoubtedly provide an important protection to the poor and prevent them from falling out of the safety net. In this Budget, have problems concerning shortage of hospital beds and lack of medical resources in hospitals been resolved? No.

Providing elderly services is a way of showing respect to the elderly and rewarding them. We are morally obliged to care for people who have once contributed to Hong Kong. Most of the recipients of the Comprehensive Social Security Assistance are elderly people. Since Hong Kong is facing the problem of population ageing, the Government has to formulate a policy on elderly care and put in more resources to get the work done, so as to fulfil our responsibility to care for the elderly. Consequently, most of the poverty problems can be solved, and Hong Kong will not be plunged into a serious poverty crisis. Regrettably, we fail to see, in this Budget, any reform measures to target the above-mentioned core problems; we also fail to see how our existing resources can be utilized to resolve these problems in the long run; and we further fail to see what further steps will be taken to resolve the problems, so that Hong Kong will have a better future.

Regarding promotion of development, I believe Members have also noticed the recent downgrade of China and Hong Kong's ratings by some international rating agencies. There are many reasons why the rating of Hong Kong has been downgraded, but one obvious reason is our excessively close economic and trade relations with China. When the rating of China is downgraded, Hong Kong cannot remain unscathed. President, I do not intend to discuss here whether Hong Kong has relied too much on the economic development of China; and if so, whether this is undesirable. However, people who have some knowledge in investment or economics would know that Hong Kong has actually relied too heavily on the economic development of China. When the economy of China was flourishing, have we stayed vigilant in times of peace? Or do we think that putting all eggs in one basket would be fine, and we do not have to consider the negative impact on Hong Kong should there be a downturn of the Chinese economy? Or have we put too much emphasis on a single economy, to the neglect of the need to seek external economic development?

The negative influence of the Chinese factor on Hong Kong has existed for a long time. In this Budget, though the Financial Secretary has expressed views about the downgrade of Hong Kong's rating, I fail to see any new strategies or LEGISLATIVE COUNCIL ─ 13 April 2016 7355 solutions proposed by him to turn the tide for Hong Kong. I hope that after the Appropriation Bill has been voted on, the Financial Secretary and the Government can focus on formulating strategies in this regard, so that there will be new opportunities, a new model of economic development and a new direction for Hong Kong.

President, all in all, many Hong Kong people do not find this Budget objectionable, but they are not particularly keen on it either. President, it does not mean this Budget is excellent; it only means that many people have noticed from the speech of the Financial Secretary that he understands and is clearly facing the current problems of Hong Kong; he has also reviewed the current political turmoil in Hong Kong. In this regard, I think the Financial Secretary has done his job, but the Chief Executive has failed flatly because he has not done what should be done in the Policy Address. On the other hand, this Budget shows that the Financial Secretary has at least understood and reviewed the current political environment. This is the most basic expectation of the SAR Government and government officials by Hong Kong people. Hence, I think this Budget has at least fulfilled our expectation in this regard.

President, I so submit.

MR MA FUNG-KWOK (in Cantonese): President, I must first declare that I am the incumbent Chairman of the Hong Kong Film Development Council (FDC).

President, the Budget this year has won some applause, which rarely happens. What the public concern most is naturally the introduction of various taxation and relief measures by the Financial Secretary, amounting to a total of $38.8 billion. On the whole, I support this Budget. Regarding the industries which I am concerned about, the Budget has introduced a number of proposals, including making an injection into the Film Development Fund (FDF) and boosting the tourism industry of Hong Kong by holding cultural and sports events, and so on. However, I think the Government should further strengthen its efforts in supporting the industries.

Recently, the Financial Secretary has expressed his support for Hong Kong films in his blog entitled "支持港產片"(Support Hong Kong Films). In fact, the budgets for these two years contain measures to support the film industry. Last year, $200 million was injected again into the FDF and this year, an 7356 LEGISLATIVE COUNCIL ─ 13 April 2016 additional $20 million is injected to specifically support locally-produced Cantonese films for distribution and publicity conducted in the Mainland. The funding will increase from the current $250,000 to $500,000 per film. This will assist the industry in expanding its market share in the Mainland. I certainly support these measures, but it seems that the degree of support has not adequately reflected the Financial Secretary's love for local films.

In 2007, Financial Secretary John TSANG injected $300 million into the FDF which was depleted last year. Even if we take the additional injection of $20 million this year into consideration, the total commitment of the Government in the FDF in these two years only amounts to $220 million, which is less than the amount of $300 million in 2007. On the basis that the injection of $300 million back then was used up in about eight years, about $37.5 million was spent each year on average, it is estimated that the injection of $200 million last year would suffice to pay for five years at an expenditure of $40 million per year. If we take inflation into account, the Government's commitment in the FDF may actually be less than that in the past.

At present, the biggest problem faced by the film industry in Hong Kong is an inadequate number of film productions. When the industry was at its peak in the 90s, as many as 200-plus films were produced every year. In recent years, even if we take co-productions produced in the Mainland into account, only about 50 films were produced every year.

The new entrants to the film industry are most affected. The reason is that they lack opportunities for enhancing themselves and showcasing their talents, and some of them do not even have the chance to get involved in a film. The Financial Secretary said in his blog that a number of local film producers have already entered the Mainland or overseas markets. However, most of these producers are the elites or experienced industry players in Hong Kong and they have participated in many co-productions in the Mainland. As the Mainland market becomes more mature, the supply of talent has increased greatly in a short time. Hence, it is increasingly difficult for a new entrant to find opportunities. If there is a shortage of new blood in the local film industry, it will pose a big challenge to the sustainability of the local film industry.

Tony LEUNG, a famous actor, once pointed out the problems of Hong Kong films. "In the 10 golden years of the film industry of Hong Kong, we focused on shooting films without training the second tier members of the LEGISLATIVE COUNCIL ─ 13 April 2016 7357 industry. As a result, the numbers of actors, actresses and even directors are very limited. After these directors have gone north to shoot movies, Hong Kong has to face a talent vacuum. Can we find any new actor or actress? No. Can we find good director? No."

At present, members of the film industry are aware of the problems of training new entrants and succession. How can we continue to produce an adequate number of Hong Kong films? How can we offer more opportunities to new entrants? These are the major concerns which we need to address if the local film industry is to develop.

The FDC, in which I am involved, is working in this direction. It is doing the work which will not be done in the market. It provides support to some small-to-medium film productions which have good potential. This will increase the number of local film productions and provide opportunities to train new entrants. Over the past few years, we have introduced a number of new schemes and enhance the existing schemes. For example, we introduced the Film Production Grant Scheme last year to subsidize film productions with a budget not exceeding $10 million and the maximum amount of subsidy is capped at $2 million. In addition, the upper limit of the production budget of a film project under the Film Production Financing Scheme has been raised from $10 million to $25 million since last year.

It is worth mentioning that in 2013, the FDC introduced the First Feature Film Initiative (FFFI) on a pilot basis to provide full subsidy to young innovative film producers of the new generation to showcase their talent. We finally saw the results this year. Three films produced under the first FFFI, namely, Mad World, Opus 1 and Weeds on Fire, will be shown to the public this year. The industry is very supportive of the three films. Some film producers, actors and actresses have taken part in these films with token remuneration. The films have received positive comments from the industry. I sincerely recommend these films to Members and I hope they will buy tickets to watch the films, so as to show their support.

President, after many years of hard work by the FDC and the film industry, we have recently seen a ray of hope for the local film industry. The decline in local film production has stopped. There are new faces on screen and behind the screen, as well as some creative productions. Yet, I think it is still a long way from revival. Therefore, in order to promote the development of the film 7358 LEGISLATIVE COUNCIL ─ 13 April 2016 industry on a continuous basis, an additional injection of resources into the FDF is a must. In fact, over the past eight to nine years, there have been significant changes in the film production environment and the international film market. If the Government only maintains the same level of provision as in the past in supporting the industry, it is in fact reducing its provision and that will be inadequate. In the future, the Government should pay careful attention to the utilization of the FDF and give stronger support to the industry.

Next I would like to talk about the creative industries. Apart from the film industry, the creative industries in Hong Kong, including the music industry, the comics and animation industry, the publication industry, and so on, have been on the decline in the past 10 years. Take the comics and animation industry as an example. The total income has dropped from the peak of $700 million in 2007 to a mere $100 million in 2014. Regarding the publication industry, the number of books published has reduced from 3 500 to 1 000. As for the local phonographic industry, the total revenue in 1997 was $1.149 billion, but only $300 million was recorded in 2012. Recently, I attended the Hong Kong Top Sales Music Award Presentation Ceremony. Last year, only 10 000-plus records were sold for the best-selling album. This number pales in comparison with the number of "gold albums" or "platinum albums" sold about 10 years ago. Thus, I welcome another injection of $400 million into the CreateSmart Initiative proposed in this year's Budget. In fact, in the past, the projects subsidized under the CreateSmart Initiative were those related to design and digital entertainment. I hope that in the future, the Initiative will pay more attention to other industries such as publication, television and music, so as to promote further development of these industries.

President, it is almost certain that the Copyright (Amendment) Bill 2014 cannot be passed in this Legislative Session. If the Copyright Ordinance cannot be updated by passing the Amendment Bill, the communication right cannot be established, and rampant streaming on the Internet will continue to eat into the success of the local creative industries. Therefore, the Government has to assess comprehensively how the failure to pass the Amendment Bill will impact on the local creative industries. In addition, it has to put in resources to adopt appropriate measures to help the industries remedy the effects concerned, for example, stepping up enforcement actions by the Customs and Excise Department to combat copyright infringement.

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President, the emergence of the Internet has in fact created risks of copyright infringement and struck a blow to the traditional mode of business operation. For example, online television has changed the way people watch television. In the past, people used to watch their favourite television drama series at the scheduled time, but now, they watch drama series online using over-the-top content platforms. Besides, lawful music streaming platforms have emerged one after another. Although the revenues derived from online music streaming and record selling are shared on a 50:50 basis, the fact that the total revenue has plunged indicates that the mode of selling has not been totally transformed.

Therefore, in order to promote the development of creative industries in Hong Kong, apart from ensuring that the legal protection can keep abreast of international development, the Government should also adopt measures to assist the industries in repositioning, adapting to the new Internet environment and developing new modes of business operation so as to expand the market.

President, on sports, though the Government has been increasing the provision for expenses on sports over the past few years, the Budget has not put forward any new proposal to promote sports, apart from expanding the scale of major events to be held in Hong Kong. Strengthening publicity on international sports events to be held in Hong Kong will certainly be conducive to our tourism industry, but the Government should, at the same time, consider formulating a comprehensive policy on sports, so as to provide more career pathways for athletes and young people of Hong Kong.

At present, the planning of the Multi-purpose Sports Complex at Kai Tak (MPSC) is in full swing. Works related to consultancy on operations, quantity surveying and technical services have commenced and the project is expected to be completed at the end of 2017. The sports sector and I look forward to the commissioning of the MPSC in 2020-2021.

In fact, the lack of sports venues has all along been a big obstacle to sports development in Hong Kong. The construction of the MPSC can address the problems of insufficient sports venue and inadequate sports facilities. I also hope that a sports development centre can be established at Kai Tak. Therefore, I hope that in constructing the MPSC, the Government will not restrict its efforts to promote sports development within the boundaries of the MPSC, but consider 7360 LEGISLATIVE COUNCIL ─ 13 April 2016 how the planning of the entire Kai Tak project can tie in with the MPSC so as to maximize the efficacy of promoting sports development.

Let me give an example. Recently, I attended the Kwun Tong Water Sports Festival organized by the Hong Kong Water Sports Council. I can confirm that water sports activities can well be held in the waters of the area. The Government should carefully consider how to make good use of the waters inside the runway of the former airport. By further improving the water quality, a water sports centre can be established there. In addition, if the road system around the MPSC can be planned in such a way that the road can be used as a multi-purpose track for holding different events, such as motor racing, cycling, walking and marathons when the need arises, I believe it will complement the MPSC and enable Kai Tak to develop into a real local sports hub.

In constructing the MPSC, the Government should grasp this opportunity and adopt complementary measures to further promote sports in the community, support elite sports and develop Hong Kong into a prime destination for hosting major international sports events as well as create opportunities for industrialization of local sports. The saying that the sports sector does not make any economic contribution is inaccurate. Take the United States as an example. The sports industry contributed as much as about 3% of the GDP, and in 2014, the output value of the industry almost reached US$450 billion. Realizing the potential in developing the sports industry, the Central Government put forward a policy on sports industrialization in 2014. The target was that the scale of the industry should exceed RMB 5,000 billion yuan by 2025. According to the estimates, the output value of the sports industry in the Mainland already exceeded RMB 400 billion yuan in 2015.

According to the consultancy study conducted by the Hong Kong Tourism Board in 2011, more than 20 000 visitors came to Hong Kong in 2011 to watch the Hong Kong Sevens and the direct economic benefits brought by these visitors amounted to almost $280 million. Hong Kong should adopt appropriate measures to promote sports industrialization in various areas, such as sports products, sports venue operation, event planning, fitness training, and so on. This will bring economic benefits to Hong Kong and provide more development resources for the local sports sector, so as to support the development of various sports events and athletes in Hong Kong.

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President, let me turn to the problem of cross-boundary students now. I think this is a great challenge. Every time this problem is raised, the Education Bureau responds very passively. I, together with some Members who are concerned about this problem, have been asking the Government to consider establishing Government-aided Hong Kong-style schools in Shenzhen to provide free education for Hong Kong-citizen children, so as to encourage them to attend schools in the Mainland. However, the Government has reacted very passively to this proposal, saying that the problem of cross-boundary students is temporary in nature, and the problem will naturally disappear without having to take any action.

Recently, a report in the Southern Metropolis Daily estimated that in the three academic years of 2016 to 2018, the number of cross-boundary students will increase from about 30 000 this academic year to between 65 000 and 85 000. While these are estimates and nobody knows the exact number of students coming to study in Hong Kong, one thing is certain. If the authorities continue to plan only one step ahead, greater pressure will be created in respect of the demand for school places and transportation arrangement. The problem may even become a disaster for both cross-boundary students and local students.

I understand that in order to establish schools for Hong Kong children on the Mainland, a number of difficulties have to be overcome. In fact, there are a few schools in Shenzhen which have similar arrangements. They offer special classes to Hong Kong children, but the number of places is limited. Moreover, as these schools charge a high school fee and the Mainland teachers are unfamiliar with the school curriculum of Hong Kong, they are not attractive to parents. Nonetheless, if Hong Kong can strengthen co-operation with Shenzhen, the problems are not unsolvable. Therefore, I urge Secretary Eddie NG once again to expeditiously and seriously study and implement the proposal to establish schools for Hong Kong children on the Mainland, as well as assist Hong Kong teachers to resolve the legal and financial problems concerning their teaching on the Mainland, so that these teachers can teach in schools for Hong Kong children and Hong Kong-citizen classes. I also urge the Secretary to provide training for Mainland teachers to boost the confidence of parents in their qualifications and encourage Hong Kong children living in Shenzhen to go to the schools there. I hope that the Secretary will show more concern about these problems.

With these remarks, President, I support the Appropriation Bill.

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MR ALVIN YEUNG (in Cantonese): President, today, we are debating the Appropriation Bill 2016, and the focus is, of course, the Budget. The Budget is formulated by the Financial Secretary. But I think Hong Kong people may sometimes ask themselves whether John TSANG is our Financial Secretary or the best online commentator in Hong Kong? Interestingly, it seems that he is now the only public official in the entire Government who can correctly gauge the pulse of Hong Kong people through his blog posts. I have no idea whether the funding provision he allocated to his own office is sufficient or not, but I hope he will use the limited resources to write more posts that can truly reflect the sentiment of Hong Kong people. Even more so, I hope the Financial Secretary can step out of the cyber world and implement the relevant policies in the real world to benefit Hong Kong people, which is what he should do actually.

Next, I would like to spend a few minutes to respond to the speeches made by other Honourable Members in the Council a moment ago. The first one is Mr MA Fung-kwok who spoke before me. In his speech, he talked extensively about culture and sports and shared with us some of his heartfelt feelings. But regarding the sports sector which Mr MA Fung-kwok mentioned specifically, I would like to remind him that LEUNG Chun-ying (whom I think he supported) has once said that the sports sector has no economic contribution. I implore him not to forget that remark. Hence, I think he should use the well-presented information in his remarkable speech to remind the Chief Executive accordingly.

Earlier today, Mr WONG Kwok-hing said that the opposition camp's filibustering was a waste of time, and counting the 1 164 quorum calls alone, 347 hours and $96.9 million of public funds have been wasted. I have no idea how Mr WONG worked out those figures, but I would like to remind him that the Government actually has the power to reshuffle the agenda item, which is exactly what the Government is doing now. Assuming Mr WONG's calculation is correct, which I think should be quite close to the actual figures, the Government is really the culprit of wasting this staggering sum of $96.9 million public funds. Why? Because by its own actions, the Government is showing to the people of Hong Kong that it has both the power and intention to reshuffle the agenda items. In other words, even though we were really filibustering back then, and had prevented the effective discussion of some agenda items, the Government could actually resolve the matter effectively.

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Secondly, I would like to respond to the remarks made by Ms Starry LEE, Chairman of the Democratic Alliance for the Betterment and Progress of Hong Kong (DAB) today. Personally, I think some of her remarks are quite thought-provoking. Allow me to quote her words directly, and she said, "[W]ith successive social incidents from Occupy Central to throwing bricks, the public are taking actions to push for expeditious reforms by politicians (especially the Government) in order to resolve conflicts. Otherwise, with conflicts snowballing and grievances building up, society will become more and more restless."

President, if the identity of the speaker is withheld, and we only consider the words per se, those words seem to be uttered by a Member on this side of the Chamber. As a Member of the pro-democracy camp, I am touched to hear those remarks made by any Member of the pro-establishment camp, let alone the Chairman of the DAB. After such a long wait, a Member of the pro-establishment camp, especially a heavyweight like Ms Starry LEE, has finally come forward and tell the truth, which is thought-provoking indeed. What does it mean? I hope it means the pro-establishment camp has finally decided to face the music, that is, conflicts in society has been escalating, and these social conflicts can only be resolved by targeting the root of the problem, rather than merely putting the blame on the protesters who took part in the demonstrations.

President, a moment ago, Mr CHAN Kam-lam made the following remarks, and I quote, "A handful of people in the boat who … only hyping up issues and demanding the captain to step down. How then can the boat go forward?" I find these remarks quite interesting. Both Ms LEE and Mr CHAN are from the same political party. How come the words spoken by the party's Chairman sound convincing even to a Member of the pro-democracy camp, while her fellow party member would make remarks to that effect? President, allow me to respond to Mr CHAN Kam-lam directly. If the captain is steering the boat on a course to crash an iceberg, we will not only make him step down, but also throw him into the sea. As we can see, the Chief Executive is not steering Hong Kong towards the right direction. Hoping to bring the boat back on course, we thus demand him to step down as soon as possible. I believe there are no reasons that Mr CHAN Kam-lam is not aware of the situation.

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President, what are the functions of a budget? Of course, the Financial Secretary is charged with Hong Kong's fiscal management, but after all, he is not the head of Hong Kong. As the public official in charge of resource allocation, he definitely has the power to resolve conflicts in our society. As far as this Budget is concerned, I concur with the view expressed by Mr Dennis KWOK, my fellow party member, a moment ago that it is an improved and positive budget. Nonetheless, allow me to point out directly, if the Financial Secretary is only good at saying positive things, but cannot use his powers to address various conflicts, large and small, in our society, he is nothing but a spin doctor because he cannot genuinely help society move forward.

A moment ago, Mr Dennis KWOK mentioned the expression of "staying vigilant in times of peace". I cannot help but recall that former Chief Executive TUNG Chee-hwa always reminded Hong Kong people to stay vigilant in times of peace during his term of office. I believe the Government or Members of the pro-establishment camp who are now present in the Chamber definitely will not forget the importance of staying vigilant in times of peace as advocated by former Chief Executive TUNG Chee-hwa, and supported or endorsed by them. Why then have they failed to stay vigilant in times of peace in the past few years?

Next, I will express my views on certain policy areas featured in the Budget. First of all, in respect of welfare and healthcare services, Financial Secretary John TSANG has always stressed the importance of healthcare expenditure. But the truth is that the Government has been reducing its commitment on healthcare services. Statistics tell no lie, President. In the 2014-2015 financial year, healthcare expenditure accounted for 17% of the Government's recurrent expenditure. The ratio then fell for two consecutive years, to 16.8% in 2015-2016, and then to 16.5% this year. Meanwhile, the total operating expenditure on healthcare last year had increased by 3.8% as compared with two years ago, but the figure this year has only increased by 0.2% as compared with last year. The rate of increase has reduced substantially. Pitched against the 11.1% increase in the Government's total operating expenditure as compared with last year, isn't such a major difference a clear indication that notwithstanding the Financial Secretary's oft-repeated rhetoric about attaching importance to healthcare, he is just paying lip service when it comes to making funding provisions?

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President, we must not forget that under the ongoing "0-1-1" envelop savings programme to reduce the operating expenditure of government departments, the initiatives in the area of health have yet to be completed. On the one hand, the Government is tightening the purse strings of healthcare, but on the other hand, it has been increasing the funding in other areas. Does Financial Secretary John TSANG really care for society as he has claimed? Surely, the public healthcare system is an area of conflicts in society, but the Financial Secretary John TSANG has been reducing its provisions. Seemingly, he has failed to suit the remedy to the case.

Separately, I would like to talk about care services for the elderly. President, at present, there is a serious shortfall in the provision of subsidized residential care places for the elderly. As far as I understand, the waiting time for a place in subvented/contract residential care homes is as long as three years on average. For the elders on the waiting list, how many "three years" do they have? Elderly persons must have a place where they can live in peace and contentment, only then can they enjoy their twilight years. Why does the Government still turn a blind eye to the fact that over 30 000 elders are already on the waiting list?

Of course, it does not mean the Financial Secretary is being indifferent because he has indeed made available some resources. How much resources have been put in? Against the background of 30 000 elders on the waiting list, an additional 176 subsidized residential care places will be provided. I think any Hong Kong people who note these figures would be amazed by such a sharp contrast. With so many elders on the waiting list, only 176 additional residential care places will be provided. Can such an increase effectively help those elders in their twilight years? I think the answer is quite obvious. At present, while the Government spends lavishly on infrastructure construction, it pulls the purse strings tight for the grassroots. I believe I am not the only one to notice this point; Financial Secretary John TSANG must also be aware of this situation. But why is he still so mean? I think only he himself knows the answer.

Animal protection is another area that I would like to discuss. President, while resources should be used for people of Hong Kong, I think nobody would dispute the importance of respecting life. We are now in the year 2016. I think Hong Kong people would also like to see the Government setting aside some 7366 LEGISLATIVE COUNCIL ─ 13 April 2016 public resources to cherish life, especially with regard to the implementation of a "Trap-Neuter-Vaccinate-Release" (TNVR) programme for stray animals. I believe my fellow party member Ms Claudia MO will touch on this issue when she speaks later because it is a matter of great concern for the Civic Party.

President, why do we attach so much importance to TNVR? It is because for us, the meaning of life is not about catching the animals and have them euthanized. That is not the basic respect of life. In particular, as Hong Kong is a developed place with a generally high standard of education, we expect the Government to allocate more resources to implement the TNVR programme. Why do I say so? Because we can educate Hong Kong people through this programme. Destroying life is not a solution to the relevant social problem. What should be done is to return life to the community for integration and co-existence. Under the existing policy, unclaimed animals will be euthanized after four days. President, this policy is appalling. When compared with the time needed to nurture life, four days is really nothing. The Government only gives these animals four days. I think nobody with a conscience and a kind heart would consider such a deadline acceptable.

President, let us not forget that after all, there is a limit as to how many animals the Government can kill. Even if the Government has euthanized all the captured animals, it cannot stop the breeding of stray animals. Therefore, we hold that TNVR is a more effective way to resolve the problem of stray animals and in line with the moral obligation to be undertaken by Hong Kong as a member of the international society. Owing to this reason, we consider it justified for the Government to set aside a substantial amount of resources to establish a dedicated Animal Protection Department to take charge of the relevant matters. The department should be given higher authority than the Food and Environmental Hygiene Department or the Agriculture, Fisheries and Conservation Department because these two government departments have never dealt with life from the perspective of loving animals. As the Government has a huge surplus, we hope it can set aside some resources for the purpose of respecting and loving life.

The next subject I would like to talk about is related to home affairs, that is the Building Management Ordinance (Cap. 344) or commonly known as "344". I hope the Government can make optimal use of resources. At present, a large LEGISLATIVE COUNCIL ─ 13 April 2016 7367 number of residential buildings in Hong Kong aged 30 years or above are required to undergo inspection and repairs under the Mandatory Building Inspection Scheme (MBIS). As widely reported in the media, many bid-rigging cases have occurred.

The problem all started when the Government implemented the MBIS in 2012 to mandatorily require all private buildings in Hong Kong aged 30 years or above to undergo inspection and even repairs. But has the Government made available the necessary resources to members of the public? We certainly fail to see any efforts made. Hence, we hope the Government can provide further assistance in this matter by setting up a building repair works authority to be responsible for central co-ordination, monitoring and handling of matters relating to the repair and maintenance of buildings. This is how the Government can genuinely help the people of Hong Kong.

Should problems arise in the course of works, leading to lawsuits, the dispute between members of the public, as well as between members of the public and owners' corporations (OCs) should be handled through a central platform. At present, the Lands Tribunal can hardly cope with such a large number of cases, not to mention that members of the public must pay the legal costs out of their own pocket when instituting legal proceedings against the OC of their building, which is quite ridiculous. Hence, we hope the Government can take one step further and establish a building affairs tribunal. Modeled after the Small Claims Tribunal, the building affairs tribunal will not allow legal representation, so that members of the public can deal with the disputes themselves.

President, last but not least, I hope the Government can understand that in order to resolve social conflicts, it is very important to give young people hope. But has the Government made any recommendation to increase the number of subsidized undergraduate places? The answer is in the negative. Has the Government ever given any consideration to alleviating the burden of student loan of fresh university graduates? The answer is again in the negative. President, if the Government wants Hong Kong people to be more creative and Hong Kong to take off again, it should strive to reduce the burden of young people, so that they can see a bright future. I think the Financial Secretary is both capable and responsible in doing so.

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President, although this Budget has made some humane remarks, it is clear from the above analysis that there are also many inadequacies. The foregoing is my speech. Thank you, President.

MS CLAUDIA MO: President, first of all, allow me to echo my colleague Alvin YEUNG's call for more concern and more money spent on animal rights in Hong Kong. Correct me if I am wrong, but I remember this Government spends about $1.5 million a year to put down animals in Hong Kong, stray and abandoned ones. Please, can we use that money on TNVR instead? Animals do not speak. We speak for them.

To come back to my speech, I would say our Financial Secretary, Mr John TSANG, has a more human face, relatively of course, and he is a successful blogger. However, we do not pay Mr TSANG a colossal salary to become a very communicative blogger. We need him to face the press, that is, face Hong Kong people, to answer questions and not just rely on this kind of unilateral communication.

But then, of course Mr TSANG is good in the sense that he does understand that economics and politics have to go parallel in a civilized society. And so, in his Budget speech, he started by talking about what I called the civil unrest in Mong Kok over the Chinese New Year holiday period. But what is really sad is the way he put it. First of all, he called it a large-scale riot, toeing the official line of course.

And then, allow me to quote him in his speech in paragraph 6. He said, I quote, "I was shocked that our city could have turned overnight into such a strange and alien place that I hardly recognised. I was troubled, why the core values that we long cherished had been devoured by violence and hatred." He pointed out the question. Politics was reeling in his head but he would not go any deeper than that. And so, despite the fact that he seemed to understand that politics had to be taken into consideration in any economic talk, he decided to just shy away from the discussion. This sort of ignorance, displayed intentionally or unintentionally, is not only known to him. It is quite blatant. He fails completely to address all the anger, frustration and resentment as displayed that LEGISLATIVE COUNCIL ─ 13 April 2016 7369 very night, particularly on the part of young people in Hong Kong. He does not want to know that Hong Kong people are holding on tight to our Hong Kong identity. Is he aware that many of us have the feeling that intruders are overrunning this city, fast corroding the actual character of this city? Would he address that? Of course he would not. He would not dare comment on what we call the "Mainlandization" trend. He would not talk anything about that at all. All we need are some fair economic comments, if not political ones, from our Financial Secretary.

President, let us take tourism as an example. Tourism barely makes up about 5% of our GDP. Of course, it is not exactly negligible, but then, how does it gets all the time over-exaggerated by officials of this C Y LEUNG regime? It is mind-boggling. And at the same time, they would not talk about how our image as an international finance hub, or our reputation as a cosmopolitan business centre has now been tarnished by all those official government scandals? No, no such thing, no such talk.

John TSANG would not talk about how this Mainland oriented tourism has affected our economy at the street level, how it has twisted our urban face altogether. How come only three categories of shops, namely jewellery, cosmetics and drug stores, can stay in business in Hong Kong? And now they are saying, because Mainland tourist arrival numbers have come down, our retail businesses have been hardly hit. I beg your pardon? You sound like Hong Kong businessmen cannot make a profit except selling gold ornaments, medicinal products or cosmetics. Is that all we are doing in Hong Kong?

I have to give you some statistics. In the year 2010, barely five years ago, we had a total of 23 million tourist arrivals. By 2015 last year, in five years' time, instead of 23 million tourists a year, we were getting exactly 59 million, a whopping 59 million! It is more than double in five years. How more twisting can you get? And day in and day out, officials keeps telling us, "Oh, our tourism is getting down. The whole of Hong Kong is going down, as though that is the only thing we would rely on in Hong Kong." It is absolutely ridiculous. Let me tell you, Japan, a favourite tourist destination of Hongkongers, including our education chief who loves going to Japan apparently for travelling, the whole of Japan, received a total of less than 20 million tourists 7370 LEGISLATIVE COUNCIL ─ 13 April 2016 last year, the exact number is 19.7 million. How does this compare to our 59 million tourist arrivals. Just how can you explain the figures which do not lie, President?

And the whole of Britain, the whole of England received 35.8 million tourist arrivals last year. Compared to our 59 million, it is completely, utterly ludicrous. We are just returning to some sort of normality in Hong Kong and government officials could not wait to make a big deal out of it, "Oh, Hong Kong's economy is dying because somebody started to pull some baggage trolleys."

I have got some old figures too. Back in 1976, it was a long long time ago, of course. Back in 1976, we barely received 1.6 million visitors, a tiny number. But back in those days, nearly 30% of our tourists came from Asia and about 20% from the United States. They were genuine tourists. Of course, that was all before DENG Xiaoping, the strongman's announcement of the Four Modernizations drive and the Open Door Policy. But then things had taken a more dramatic turn. The tables are turned, of course, but should it be in such a dramatic way? And here I would really accuse Mr John TSANG of being dishonest when it comes to the core of Hong Kong's economy. Could he please be a little more far-sighted? Our Mainland tourist arrivals are down because of the Mainland's anti-corruption drive that hurts. The weaker Renminbi also hurts. Please remember all that.

In the meantime, our business ratings, our credit ratings keep going south, going west. What happened? Every time there is an official government scandal, our ratings would go down and Mr TSANG again would not talk about it. Of course, he likes any vision. Not too long ago, very recently, there was a report in a Wall Street Journal with the headline to the effect that China was losing control of its economic plot. Ouch! If China is losing control over its own economic planning, what is going to happen to Hong Kong? It is going to take Hong Kong down with it. That is for sure, talking about integration of China and Hong Kong all the time. How can we be so dependent, at least apparently, on whatever China bestows on us, offers to us? Why can we not be more Hong Kong? That is the argument. And indeed our Gini Coefficient is at the very top of the world. Our Gini Coefficient, that is, the wealth divide in LEGISLATIVE COUNCIL ─ 13 April 2016 7371

Hong Kong is so well known in the world, that the rich and the poor gap is just so wide. It is unspeakable. It is even worse than the situation in Mainland China. How could you not address problems of that sort? And of course how the Link REIT monopoly affects our livelihoods; how ATV affected our international business image that a whole television station could just wind up like that, and in the meantime, it could do whatever it wanted before it shut down; and the LEE Po scandal, how it has really taken down to our credit ratings. It is unthinkable and the Financial Secretary has full responsibility to address all those issues. He has taken the easy way out, of course. He would not mention the fact that in 10 years, up to $4.5 billion worth of water from China had overflowed from our reservoirs into the sea, literally, money down not the loo, not the river but the sea. How about that?

So Mr TSANG is now widely tipped to be a Chief Executive hopeful next round. I wish him luck. Thank you.

MR GARY FAN (in Cantonese): President, in this year's Budget, Financial Secretary John TSANG has tried to use a milder, more humanized tone in response to the various conflicts in society arising from political and economic issues. However, the Budget has yet to genuinely address the demands of Hong Kong people, particularly young people and the elderly; nor has it introduced long-term measures to support and help the grassroots. I think it will be difficult to alleviate the deep-seated conflicts currently faced by Hong Kong.

Financial Secretary John TSANG has stressed time and again that a structural deficit would surface in Hong Kong within a decade. While the budget deficit has yet to surface, Hong Kong people instead find that structurally, surplus has been underestimated in the budget year after year. In the previous eight budgets during his term of office, Financial Secretary John TSANG has made the wrong estimates every year. The underestimated surpluses in the previous eight budgets had amounted to nearly $500 billion. President, $500 billion is exactly five times the size of the $100 billion universal retirement protection start-up fund proposed by the community. Even when computed on the basis of the average additional annual expenditure of $47.9 billion incurred by the "regardless of rich or poor" option proposed by the Government, the 7372 LEGISLATIVE COUNCIL ─ 13 April 2016 accumulated government surpluses structurally underestimated by the Financial Secretary are adequate to cover the expenditure for universal retirement protection proposed by the Government for 10 years. The amount is alarming.

Owing to a structurally underestimated surplus, even if we have a budget surplus every year, the Government can only hand out "candies" year after year, but it is unable to put forward any long-term poverty alleviation measures. This year, despite a surplus of $30 billion in the Treasury, the Government has unexpectedly removed the rent waiver to public rental housing tenants, and the amount saved has not been translated into long-term poverty alleviation measures. On the contrary, an astronomical sum of public money has been spent on the "white elephant" infrastructure projects.

President, in its blind pursuit of the policy of integration between the Mainland and Hong Kong, the Government has not followed the financial management philosophy of "living within our means". It has been nine years since Financial Secretary John TSANG took office. The expenditure of the SAR Government on highways and railways has substantially increased from nearly $3.2 billion in his first budget in 2008 to $43.8 billion this year, representing an 11-fold increase. The expenditure is spent on the Hong Kong-Zhuhai-Macao Bridge, and the Hong Kong section of the Guangzhou-Shenzhen-Hong Kong Express Rail Link (XRL), which are among the "white elephant" infrastructure projects aimed at the Mainland-Hong Kong integration. On the other hand, the SAR Government is not only reluctant to commit sufficient resources on policies on people's livelihood, it even reduced the recurrent expenditure of the Hospital Authority, neglecting the plight of front-line medical personnel and patients. Hence, President, on behalf of the , I propose nine amendments which aim at reducing the estimated expenditure of the Government in different policy areas in the following year. Next, I will, on behalf of the Neo Democrats, explain in detail the justification for various amendments.

The first amendment seeks to reduce the estimated annual remuneration of the Chief Executive. Since LEUNG Chun-ying assumed office as the Chief Executive, he has not taken into consideration the overall situation of Hong Kong; instead he only gives priority to the interests of the Mainland. Acting LEGISLATIVE COUNCIL ─ 13 April 2016 7373 against public aspiration, he has indiscriminately implemented the Mainland-Hong Kong integration in disregard of the interests of the Hong Kong people, causing widespread discontent among members of the public. This has been reflected by the persistently low popularity rating of the Chief Executive. Besides, LEUNG Chun-ying himself has been plagued with scandals. He has yet to give a clear explanation about the unauthorized building works found in his residence and the scandal over his receipt of secret remuneration from UGL Limited. Recently, he was alleged of exerting pressure on the Airport Authority Hong Kong (AAHK). The Security Bureau, AAHK, and the Civil Aviation Department even shielded him at the expense of their professionalism. The credibility of the SAR Government in the minds of members of the public has thus been completely lost. Hence, the Neo Democrats thinks that LEUNG Chun-ying is not qualified to be the Chief Executive, and his estimated annual remuneration should be reduced.

President, my second amendment seeks to reduce six months' remuneration of Secretary for Education Eddie NG. Since Eddie NG assumed office as the Secretary for Education, his incompetence is evidence to all. Secretary Eddie NG has all along been the problem makers ever since the introduction of national education in 2012, all the way through the disputes over "using Putonghua to teach the Chinese Language subject," lead-in-water crisis in schools, and the disputes regarding learning simplified Chinese. During his term of office, Eddie NG has not properly resolved the outstanding problems with Hong Kong's education system, including the drilling culture arising from the Territory-wide System Assessment, insufficient university places, students committing suicide, among other issues. Therefore, the Neo Democrats thinks that there is dereliction of duty on the part of Eddie NG as the Secretary for Education.

President, my other amendments also include reducing six months' remuneration of Secretary for Commerce and Economic Development Gregory SO and reducing the estimated annual expenditure of the Hong Kong Tourism Board (HKTB) under the Commerce and Economic Development Bureau for doing publicity work on the Mainland. The biggest blemish of Secretary SO during his term of office is his dereliction of duty in handling free television programme service licences. While the Government has promoted the opening 7374 LEGISLATIVE COUNCIL ─ 13 April 2016 up of the free television market for years, it was not until early April that a new free television broadcaster was launched. Nevertheless, the broadcaster only took over 0.5 digital multiplex from the defunct Asia Television Limited. The Government would rather have one digital multiplex which can carry four television stations left idle than follow the recommendation of the Communications Authority to issue a license to the Hong Kong Television Network Limited, overriding professional judgment with political considerations.

Besides, in the course of promoting the Copyright (Amendment) Bill 2014 (the Bill), Secretary SO has tried to force it through. While he led the consultation exercise for the Bill, he only heeded the views of those with vested interests all the way, but turned a deaf ear to the amendments proposed by the pan-democratic Members and the suggestions made by community groups, resulting in three whole months of political deadlock in the Legislative Council before the Bill was withdrawn in the end. Gregory SO is guilty of dereliction of duty.

President, the Commerce and Economic Development Bureau continues to allocate a funding of as much as $40 million this year for the HKTB to promote Hong Kong on the Mainland. In the past few years, the Neo Democrats has repeatedly made an outcry in the Council, pointing out that the development of our tourism industry should attach importance to quality instead of quantity. We find that the Government is moving forward in a good direction by incorporating some of our previous proposals in this year's Budget. However, the HKTB has not reduced its investments on promotion in the Mainland market. Hence, Hong Kong still has to spend public money and bear huge social cost to receive a large number of visitors under the Individual Visit Scheme (IVS), which is far beyond its receiving capacity. Although we observe a downward trend in the number of visitor arrivals from the Mainland in recent months, the total number or ratio of Mainland visitors is still relatively high. Instead of attracting more Mainland visitors under the IVS, the Neo Democrats is of the view that the HKTB should put more capital in the international market and focus its resources on the development of the local tourism industry, so that the tourism industry will fully get back on the right track of healthy development.

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President, in the amendments this year, the Neo Democrats also suggests reducing six months' remuneration of the Secretary for Security LAI Tung-kwok and the Secretary for Development Paul CHAN. LAI Tung-kwok has repeatedly connived at the overuse of force on the part of the Police to suppress peaceful protesters during processions and demonstrations in recent years. Besides, he acted in an extremely cowardly manner in handling the LEE Po incident, which shows his lack of determination to safeguard "one country, two systems" in Hong Kong. Recently, in order to defend LEUNG Chun-ying, he even made irresponsible remarks that the abuse of privileges by the first family of the Chief Executive at the airport has not been handled on a "special arrangement for a special case" basis. He has lost the conduct expected of an accountability official. As for Secretary for Development Paul CHAN, he has failed to properly handle the problem of land supply and neglected the great development potential of brownfields. He insisted on developing North East New Territories by "destroying families and villages" in order to transfer benefits to real estate developers (including Paul CHAN himself) who have hoarded land in North East New Territories for years.

The Neo Democrats is of the view that the above four Directors of Bureaux are not entitled to receive the high remuneration in full.

President, apart from reducing the emoluments of the Chief Executive and Directors of Bureaux, I also suggest reducing the estimated annual operating expenditure of the South East New Territories (SENT) Landfill in Tseung Kwan O (TKO). This is the fourth consecutive year that I propose the same amendment. The amendment mainly targets at the planning blunder made by the obstinate SAR Government in extending the SENT Landfill which is close to the residential area. As we know, though the funding for extending the TKO landfill has been approved for more than a year, the Government has yet to implement the quantity-based waste charging scheme or put more resources on waste recycling and reduction. The burden on landfills has not been mitigated at all. Hence, I have to propose reducing the operating expenditure of the SENT Landfill once again. I urge the Government to attach importance to the aspiration of the TKO residents and close the SENT Landfill.

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President, my last two amendments seek to reduce the estimated annual expenditure for the item "Monitoring and Verification Services Consultancy for the detailed design and construction stages of the Three-Runway System (3RS) Project" for the airport, and to reduce the estimated annual expenditure for the dedicated division under the Railway Development Office of the Highways Department responsible for planning and implementing the Hong Kong section of the XRL Project. While the issue of airspace management between Hong Kong and Shenzhen remains unresolved, the Government insisted on circumventing this Council to take forward the extension project of the 3RS Project, which costs over $140 billion. Members of the public have therefore queried whether the 3RS Project would make the same mistake as the co-location arrangement of the XRL, which will not only involve serious cost overruns and delays, but may also ruin the "one country, two systems" by handing the management right of Hong Kong's airspace over to the Mainland. Hence, the Neo Democrats calls for reducing the planned expenditure of the 3RS Project in the Budget.

With regard to the Hong Kong section of the XRL Project, the performance of the Highways Department in the past few years has clearly indicated its incompetence to keep on monitoring the XRL Project. In addition, the economic benefits of the XRL have been called into question, and it is highly probable that the project will suffer substantial losses in the future. The Neo Democrats opposes the Government's insistence on continuing with the XRL Project. We call on the Government to consider the suspension and conversion option put forward by the community. Hence, we propose to reduce the estimated annual expenditure of the division of the Highways Department dedicated to carrying out the project of Hong Kong section of the XRL.

President, the expenditure of the SAR Government on infrastructure grew at a much faster rate than that in other policy areas in the past decade or so. The XRL Project, the Hong Kong-Zhuhai-Macao Bridge, and the boundary control point at Liantang/Heung Yuen Wai are all products of the integration of Shenzhen and Hong Kong. While all these infrastructure projects are aimed to realize regional integration, they are not tailored to the real needs of Hong Kong people. The invisible hand of the Beijing Government which intervenes in the administration of the Hong Kong Special Administrative Region is admittedly the greatest driving force behind these "white elephant" infrastructure projects.

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President, international credit rating agency Moody's downgraded Hong Kong's credit rating outlook from "stable" to "negative" last month, which means that while Hong Kong can retain its current credit rating for the time being, its rating can be formally downgraded at any time if the political and economic situation in Hong Kong worsens. According to Moody's, Hong Kong's reliance on trade with China makes it susceptible to a slowdown of China's economic growth. In addition, as Beijing reinforces its influence on "one country, two systems", Hong Kong may lose part of its independence in the long run. As a result, Hong Kong's decision-making standard and goodwill will be affected, and its own strength will also be undermined. Moody's clearly noted that the white paper on "one country, two systems" issued by Beijing exactly proves that Hong Kong is gradually losing its independence.

The SAR Government certainly disagrees with the rating by Moody's, but it is a hard fact that the international community thinks that the impression of foreign-funded enterprises on Hong Kong would be affected as Hong Kong is moving closer to the Mainland regime. The SAR Government should face up to the situation. In fact, the adverse effects of over-reliance on the Mainland on the part of the SAR Government are beginning to emerge. As we can see, the number of Mainland visitors under the IVS has slightly dropped by 7% or 8% in the recent six months or so. In view of this, stakeholders of the travel industry, retail industry, the business sector, and consortia came forward one after another saying that they have entered the "chilling winter". However, the Neo Democrats has reminded the Government and the Secretaries of Departments about these hidden worries and the impact of the economic cycle of the Mainland market in the budget speeches and even at the meetings of various Panels in the past few years. Nevertheless, the Government has been slow to react and has not made any direct response.

President, Financial Secretary John TSANG praised the contributions Hong Kong-produced films have made in his Budget speech, and he has publicly praised the potential of localism to be turned into a constructive force. In the minds of many Hong Kong people, Financial Secretary John TSANG is more far-sighted than LEUNG Chun-ying; he follows public opinions more closely and can better address the concerns over the various conflicts in society nowadays. However, I think that it is not enough for the Government just to recognize our localist sentiment. Concrete policy support is also needed. For example, the development of desalination plants, the launch of the First Feature Film Initiative, 7378 LEGISLATIVE COUNCIL ─ 13 April 2016 and efforts to promote diversified and quality tourism are a good start. Besides, the Government should formulate longer-term policies to allow Hong Kong to maintain the comparative advantages of its own system, develop its own self-sufficient and sustainable industries, and ensure the interests of the Hong Kong people are not harmed in a practical manner.

President, on behalf of the Neo Democrats, I have made various criticisms on the Budget. This is my speech made during the Second Reading debate. I will explain in detail later. Thank you President.

SUSPENSION OF MEETING

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

Suspended accordingly at 7.55 pm.