LEGISLATIVE COUNCIL ― 21 April 2021 4933

OFFICIAL RECORD OF PROCEEDINGS

Wednesday, 21 April 2021

The Council met at Eleven o'clock

MEMBERS PRESENT:

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

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

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

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

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

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

THE HONOURABLE CHAN HAK-KAN, B.B.S., J.P.

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

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

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

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

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

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

4934 LEGISLATIVE COUNCIL ― 21 April 2021

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

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

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

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

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

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

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

THE HONOURABLE KWOK WAI-KEUNG, J.P.

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

THE HONOURABLE ELIZABETH QUAT, B.B.S., J.P.

THE HONOURABLE MARTIN LIAO CHEUNG-KONG, G.B.S., J.P.

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

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

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

THE HONOURABLE CHUNG KWOK-PAN

THE HONOURABLE JIMMY NG WING-KA, B.B.S., J.P.

DR THE HONOURABLE JUNIUS HO KWAN-YIU, J.P.

THE HONOURABLE HOLDEN CHOW HO-DING

THE HONOURABLE SHIU KA-FAI, J.P.

THE HONOURABLE WILSON OR CHONG-SHING, M.H.

LEGISLATIVE COUNCIL ― 21 April 2021 4935

THE HONOURABLE YUNG HOI-YAN, J.P.

DR THE HONOURABLE PIERRE CHAN

THE HONOURABLE CHAN CHUN-YING, J.P.

THE HONOURABLE CHEUNG KWOK-KWAN, J.P.

THE HONOURABLE LUK CHUNG-HUNG, J.P.

THE HONOURABLE LAU KWOK-FAN, M.H.

THE HONOURABLE KENNETH LAU IP-KEUNG, B.B.S., M.H., J.P.

DR THE HONOURABLE CHENG CHUNG-TAI

THE HONOURABLE VINCENT CHENG WING-SHUN, M.H., J.P.

THE HONOURABLE TONY TSE WAI-CHUEN, B.B.S., J.P.

PUBLIC OFFICERS ATTENDING:

THE HONOURABLE PAUL CHAN MO-PO, G.B.M., G.B.S., M.H., J.P. FINANCIAL SECRETARY

THE HONOURABLE WONG KAM-SING, G.B.S., J.P. SECRETARY FOR THE ENVIRONMENT

DR THE HONOURABLE LAW CHI-KWONG, G.B.S., J.P. SECRETARY FOR LABOUR AND WELFARE

THE HONOURABLE FRANK CHAN FAN, J.P. SECRETARY FOR TRANSPORT AND HOUSING

PROF THE HONOURABLE SOPHIA CHAN SIU-CHEE, J.P. SECRETARY FOR FOOD AND HEALTH

THE HONOURABLE EDWARD YAU TANG-WAH, G.B.S., J.P. SECRETARY FOR COMMERCE AND ECONOMIC DEVELOPMENT

4936 LEGISLATIVE COUNCIL ― 21 April 2021

THE HONOURABLE KEVIN YEUNG YUN-HUNG, J.P. SECRETARY FOR EDUCATION

THE HONOURABLE PATRICK NIP TAK-KUEN, J.P. SECRETARY FOR THE CIVIL SERVICE

DR DAVID CHUNG WAI-KEUNG, J.P. UNDER SECRETARY FOR INNOVATION AND TECHNOLOGY, AND SECRETARY FOR INNOVATION AND TECHNOLOGY

THE HONOURABLE ERICK TSANG KWOK-WAI, I.D.S.M., J.P. SECRETARY FOR CONSTITUTIONAL AND MAINLAND AFFAIRS

THE HONOURABLE CASPAR TSUI YING-WAI, J.P. SECRETARY FOR HOME AFFAIRS

MR JOSEPH CHAN HO-LIM, J.P. UNDER SECRETARY FOR FINANCIAL SERVICES AND THE TREASURY, AND SECRETARY FOR FINANCIAL SERVICES AND THE TREASURY

MR SONNY AU CHI-KWONG, P.D.S.M., J.P. UNDER SECRETARY FOR SECURITY

MR LIU CHUN-SAN, J.P. UNDER SECRETARY FOR DEVELOPMENT

CLERKS IN ATTENDANCE:

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

MS DORA WAI, DEPUTY SECRETARY GENERAL

MISS FLORA TAI YIN-PING, DEPUTY SECRETARY GENERAL

MS MIRANDA HON, ASSISTANT SECRETARY GENERAL

LEGISLATIVE COUNCIL ― 21 April 2021 4937

PRESIDENT (in Cantonese): 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)

LAYING OF PAPERS ON THE TABLE OF THE COUNCIL

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

Subsidiary Legislation Legal Notice No.

Arbitration (Amendment) Ordinance 2021 (Commencement) Notice ...... 46 of 2021

Prevention and Control of Disease (Prohibition on Group Gathering) (Amendment) (No. 2) Regulation 2021 ...... 48 of 2021

Tax Reserve Certificates (Rate of Interest) (Consolidation) (Amendment) Notice 2021 ...... 49 of 2021

Control of Obscene and Indecent Articles (Amendment) Regulation 2021 ...... 50 of 2021

Allowances to Jurors (Amendment) Order 2021 ...... 51 of 2021

Other Papers

Employees' Compensation Insurance Levies Management Board Annual Report 2019/2020 (including Financial Statements and Independent Auditor's Report)

Employees Compensation Assistance Fund Board Annual Report 2019-2020 (including Financial Statements and Independent Auditor's Report)

4938 LEGISLATIVE COUNCIL ― 21 April 2021

Occupational Deafness Compensation Board Annual Report 2019/2020 (including Financial Statements and Independent Auditor's Report)

Pneumoconiosis Compensation Fund Board Annual Report 2019 (including Financial Statements and Independent Auditor's Report)

Pneumoconiosis Ex Gratia Fund Annual Report for the Year from 1 April 2019 to 31 March 2020 (including Financial Statements and Report of the Director of Audit)

Insurance Authority Estimates of Income and Expenditure for 2021-22

Qualifications Framework Fund Financial Statements for the year ended 31 August 2020 (including Report of the Director of Audit)

Quality Education Fund Financial Statements for the year ended 31 August 2020 (including Report of the Director of Audit)

Education Development Fund Financial Statements for the year ended 31 August 2020 (including Report of the Director of Audit)

AIDS Trust Fund Annual Report 2019-20, Financial Statements and Report of the Director of Audit for the year ended 31 March 2020

Report No. 15/20-21 of the House Committee on Consideration of Subsidiary Legislation and Other Instruments

LEGISLATIVE COUNCIL ― 21 April 2021 4939

WRITTEN ANSWERS TO QUESTIONS

Impacts of investment losses incurred by investment funds

1. MR CHRISTOPHER CHEUNG (in Chinese): President, it has been reported that Archegos Capital Management ("ACM"), a family office fund based in the United States, failed to meet the margin calls after plunges in the prices of a number of United States-listed stocks in which it had invested in a highly leveraged way. As a result, ACM was forced to close out the securities contracts (commonly known as "forced liquidation") and dump the stocks concerned of value amounting to almost US$30 billion. Besides, a number of international investment banks which provided brokerage services for ACM suffered significant losses. In this connection, will the Government inform this Council:

(1) whether it has assessed the impacts of ACM's forced liquidation on the capital market of Hong Kong, and how the incident affects the development of family offices' wealth management business in Hong Kong;

(2) given that the incident has revealed the enormous risk involved in investment banks' provision of highly leveraged loans for hedge funds, of the Government's measures in place to prevent local investment banks from providing such funds with excessive amounts of loans;

(3) of the mechanism in place to guard the financial system of Hong Kong against the impacts arising from the investment losses suffered by sizable international financial institutions; and

(4) whether it will take measures to raise investors' vigilance about the possible risk of failure of sizable funds in times of high market volatility; if so, of the details; if not, the reasons for that?

SECRETARY FOR FINANCIAL SERVICES AND THE TREASURY (in Chinese): President, my response to the various parts of the question, in consultation with the Securities and Futures Commission ("SFC"), is as follows:

4940 LEGISLATIVE COUNCIL ― 21 April 2021

(1) SFC has noted that Archegos Capital Management ("ACM"), a family office in the United States and prime brokerage client of many global banks, defaulted on margin calls. SFC has been closely monitoring the situation and made enquiries with prime brokers in Hong Kong, with a view to procuring an orderly wind-down of ACM's positions to avoid any adverse impact on the Hong Kong securities market.

Meanwhile, the unwinding of ACM's positions globally has prompted regulators to raise scrutiny on family office funds and prime brokers' risk management. In Hong Kong, all players in the market carrying on financial businesses which are subject to the regulation of Hong Kong laws, regardless of the form of business, have to comply with the law and regulations and come under financial regulators' supervision. For the above mentioned activities, SFC is enhancing its monitoring of prime brokers' exposures to highly leveraged funds to mitigate the risks posed to the market and to the brokers in the event of defaults.

At the macro-policy level, the Government and financial regulators will strive to perfect our risk management system and propel the orderly development of our financial market under a proper legal framework. Noting that family office business is gathering speed in recent years and forms an important growth component of the wealth and asset management sector, the Government will continue its efforts to attract more family offices to set up and operate in Hong Kong. Additional resources have been provided by the Financial Services and the Treasury Bureau to InvestHK for setting up a dedicated team to step up promotional efforts in local and other major markets, and provide one-stop-shop service to family offices interested in setting up presence in Hong Kong. The dedicated team is expected to commence operation in the second quarter of 2021.

(2) Some prime brokers would lend securities or cash to investment funds for trading, the risk management of which is subject to SFC's regulation. SFC issued a circular in June 2019 to intermediaries, setting out the standards of conduct and internal controls SFC expects of prime brokers. In particular, prime brokers are expected LEGISLATIVE COUNCIL ― 21 April 2021 4941

to: (a) maintain effective policies and procedures for proper risk management and ensure adequate information is provided to allow the management to take appropriate and timely action to contain or manage risks; and (b) establish appropriate risk limits for ongoing monitoring and periodical assessment of their appropriateness. SFC has been monitoring regularly prime brokers' compliance with the circular requirements.

(3) and (4)

Economic security forms an important part of the national security system; and financial security serves as the cornerstone of our economic security. The Government strives to safeguard the financial security of Hong Kong through putting in place a stringent and effective regulatory regime (which includes alert and emergency response mechanisms) with a view to controlling cross-sectoral market risks. For this purpose, the Government has raised with financial regulators the need to closely monitor the market situation and to employ measures to control the systemic risks of the market when appropriate. Financial regulators ascertain through stress tests from time to time that the regulated bodies can withstand market risks amidst market volatilities.

Moreover, the Government and financial regulators have set up various platforms to deliberate on the latest developments of financial markets and regulations, as well as to monitor regularly the operation of Hong Kong's financial system with a view to upholding our financial stability. These platforms include the Council of Financial Regulators chaired by the Financial Secretary and Financial Stability Committee chaired by the Secretary for Financial Services and the Treasury.

Concerning the securities market, Hong Kong has developed a comprehensive monitoring framework and a set of indicators to identify potential systemic risks or other specific risks in the stock and derivatives markets (including over-the-counter derivatives transaction), such as reporting requirements of building up of large positions, restricting covered short selling to designated securities and requiring the reporting of such.

4942 LEGISLATIVE COUNCIL ― 21 April 2021

We will continue to closely monitor the dynamics of global and local financial markets and adopt effective and timely measures as appropriate with a view to ensuring financial stability.

In respect of investor education, the Investor and Financial Education Council has been organizing various educational and promotional activities to enhance investors' understanding of the financial market and products and assist them in acquiring the knowledge and know-how required of financial investments. Meanwhile, SFC will continue to monitor the situation in relation to hedge funds and their prime brokers, and will alert investors of the relevant risks if deemed necessary.

Strengthening the regulation of the capital markets

2. MR LAU KWOK-FAN (in Chinese): President, in February this year, the Securities and Futures Commission ("SFC") and the Financial Reporting Council ("FRC") concluded a new Memorandum of Understanding ("MoU") to promote the collaboration between the two parties, thereby strengthening the regulation of the capital markets. According to the MoU, both parties will enhance the areas of collaboration, including case referrals, joint investigations, mutual assistance and capacity building. In this connection, will the Government inform this Council:

(1) of the circumstances under which FRC will, upon initiating a formal investigation into a listed company, refer the relevant case to SFC;

(2) of the details of SFC's procedure for handling cases referred to it and the law enforcement actions that it may commence;

(3) of the scope of actions that SFC and FRC may commence, and whether it includes investigating the conduct of the boards of directors of listed companies and their members, and imposing punishments on those persons involved in non-compliance incidents; if not, of the reasons for that;

LEGISLATIVE COUNCIL ― 21 April 2021 4943

(4) given that SFC and FRC have agreed to notify each other before preparing and issuing policies or guidelines which may bring a significant impact to the regulatory functions of the other party, of the specific examples of such policies or guidelines; and

(5) whether, apart from concluding the MoU, SFC and FRC have other specific plans to enhance the quality of financial reporting by listed companies and the quality of audit work conducted by auditors of listed companies, and to regularly conduct performance reviews on the relevant work; if so, of the details?

SECRETARY FOR FINANCIAL SERVICES AND THE TREASURY (in Chinese): President, my response to the various parts of the question, in consultation with the Securities and Futures Commission ("SFC") and the Financial Reporting Council ("FRC"), is as follows:

(1) Upon FRC's initiation of a formal investigation into a listed company, during the performance of its duties, if FRC notices any matter which may fall within the regulatory remit of SFC, FRC will refer the matter to SFC for consideration of appropriate follow-up actions.

(2) Upon FRC's referral of cases, SFC may initiate an investigation if it has reasonable cause to believe that an offence or misconduct under any of the relevant provisions of the Securities and Futures Ordinance ("SFO") may have been committed. SFC will assess the information provided by FRC and any other relevant information. If an investigation is initiated and there is sufficient evidence to substantiate the suspected offence or misconduct, SFC may, after taking into account legal advice and any other relevant factors, decide to take appropriate enforcement actions. SFC will consider all factors relevant to the pursuit of its regulatory objectives set out in section 4 of SFO and the performance of its functions set out in section 5 of the Ordinance.

(3) The scope of an investigation and the resulting enforcement actions of SFC and FRC, if any, will depend on the circumstances of each case. If it appears to SFC that market misconduct, such as 4944 LEGISLATIVE COUNCIL ― 21 April 2021

disclosure of false or misleading information, may have taken place, it may institute proceedings in the Market Misconduct Tribunal ("Tribunal") concerning the matter. Tribunal may make an order to disqualify a person who has been identified as having engaged in market misconduct from being a director of any company in Hong Kong. The Court of First Instance may also, upon an application made by SFC, disqualify a person from being a director of any company in Hong Kong, if the Court is of the opinion that the business of the affairs of a listed company have been conducted in certain manners, such as involving fraud or other misconduct. If a current director of a listed company is disqualified by Tribunal or the Court, that person will cease to be a member of the Board of Directors of the company. Whether Tribunal or the Court will impose such an order will depend on the circumstances of the case, such as the strength of the evidence and the gravity of the misconduct concerned.

The subjects of FRC's investigation include Public Interest Entities auditors and their registered responsible persons. In addition, FRC may refer the relevant matter to relevant regulatory bodies for consideration of investigation or disciplinary actions against directors of listed companies as appropriate.

(4) The Memorandum of Understanding ("MOU") between SFC and FRC provides that each party, as and when it considers appropriate and to the extent practicable and subject to applicable laws, will notify the other party of any issue that the notifying party believes may have a significant implication for the other party. This may include the development and publication of policies and guidelines. Since MOU came into force in February this year, the two parties have not come across any situation warranting relevant notifications.

(5) SFC and FRC hold regular meetings to discuss issues of common interests and explore cooperation initiatives. Both regulators are keen on collaborating more closely with a view to enhancing the audit quality and financial reporting quality of listed companies and improving corporate governance of these companies.

LEGISLATIVE COUNCIL ― 21 April 2021 4945

Self-regulation of the legal profession

3. MR CHEUNG KWOK-KWAN (in Chinese): President, at the end of last year, the Council of the Law Society of Hong Kong ("Law Society") intervened in the operation of a law firm ("the firm") pursuant to the relevant legislation. The firm's practice forthwith ceased, and all the money of the firm has been held by the Law Society on trust. Given that the firm, prior to its cessation of practice, was one of the major law firms in Hong Kong engaging in cases of sale and purchase of second-hand property units, more than 150 clients of the firm were affected by the incident ("affected clients"), and at least $375 million of clients' money was frozen. Some affected clients have pointed out that they have suffered huge losses as the money they deposited in the firm has been frozen, and that the incident has also illustrated that the self-regulatory regime of the legal profession cannot adequately protect the interests of clients of law firms. In this connection, will the Government inform this Council:

(1) whether it knows the number of law firms the operation of which was intervened by the Law Society in the past 10 years, and set out in a table for each case (i) the date of intervention, (ii) the name of the law firm, (iii) the number of clients affected, (iv) the total amount of clients' money frozen, and (v) the duration of the intervention;

(2) of the number of enquiries or requests for assistance, received by the Department of Justice ("DoJ") in the past 10 years, from the clients of the law firms which had been intervened, and the follow-up actions taken by DoJ;

(3) whether DoJ regularly reviewed in the past 10 years if the legislation relating to the self-regulation of the legal profession could dovetail with the current situation, thereby being able to effectively protect the interests of members of the public and clients of law firms; if DoJ did, of the dates and outcome of such reviews; if not, the reasons for that, and whether DoJ will conduct a review immediately; and

(4) given that in a judgment handed down on 19 February this year on an application for leave to apply for judicial review in relation to the aforesaid incident, the Court of First Instance of the High Court pointed out that the parties concerned could consider and implement 4946 LEGISLATIVE COUNCIL ― 21 April 2021

tailor-made, perhaps innovative, solutions seeking to alleviate the harshness of the impact felt by clients of the firm (such as making an early and significant interim payout), and that the Court would remain ready to provide such assistance and directions as might be sought, whether DoJ will follow up on this advice, and discuss with the Law Society solutions for helping the large number of affected clients; if so, of the details; if not, the reasons for that?

SECRETARY FOR JUSTICE (in Chinese): President, the Legal Practitioners Ordinance (Cap. 159) ("the Ordinance") and its subsidiary legislation provide for the powers and functions of the Law Society of Hong Kong ("the Law Society") as the regulatory body for solicitors in Hong Kong. Under the self-regulatory regime for Hong Kong's legal profession, the Law Society must, in compliance with the relevant laws, exercise its powers and perform its functions independently.

The mechanism which provides for the Law Society to intervene into the practice of a law firm is an important regulatory tool under the legislative scheme of the Ordinance. Part IIA of the Ordinance confers the relevant powers on the Law Society with due regard to protection of clients and the public interests. The circumstances under which the Council of the Law Society ("the Council") may intervene into a law firm's practice include cases of suspected dishonesty,(1) bankruptcy,(2) or breaches of other rules made under the Ordinance.(3) The progress of an intervention would depend on a number of factors, including the number of clients of the intervened firm, the amount of records of the intervened firm, and whether the files and accounting records are complete.

In the course of intervention, the Council shall, as required by the law, hold all sums of money of an intervened firm on trust for the persons beneficially entitled to them. This is to avoid any misappropriation of such funds in order to protect the interests of the clients and the public. As the trustee of the funds, the Council may apply to the court for directions or determination of any question arising in the execution of a trust.(4) The intervention agent, appointed by the

(1) Section 26A(1)(a) of the Ordinance.

(2) Section 26A(1)(d) of the Ordinance.

(3) Section 26A(1)(c) of the Ordinance.

(4) Order 85, Rule 2(2)(a) of the Rules of the High Court (Cap. 4A). LEGISLATIVE COUNCIL ― 21 April 2021 4947

Council to assist the intervention, would first verify any claims for return of money paid to an intervened firm and the manner of release of such client money will be subject to authorization by a court order obtained upon the Council's application to the court.

With regard to various parts of the question, having made enquiries with the Law Society, the Department of Justice ("DoJ") replies as follows:

(1) DoJ does not have the information requested in the question. The Law Society, on our enquiries, agreed to disclose the following information.

Between 2011 and 2020, there are in total 23 interventions by the Law Society. The names of such intervened firms and the respective dates of intervention are listed in Annex.

In respect of the 21 interventions from 2011 to 2019, the Law Society received a total of 979 claims (excluding subsequently withdrawn applications). Regarding the two interventions in 2020 which are still in receipt of claims, the Law Society is unable to provide the respective number of claims at this stage.

In relation to the total amount of frozen client funds, the total relevant amount in respect of the interventions over the past 10 years is approximately HK$538 million.

The Law Society indicated that according to its record, with regard to the interventions in the past 10 years, it took on average two years and seven months from the date of the intervention to the grant of court orders in relation to disposal and distribution of the relevant funds.

(2) DoJ does not maintain statistics on public enquiries and requests for assistance to DoJ on interventions. Whenever on receipt of enquiries about and comments on the intervention of law firms, DoJ would follow up as appropriate. If necessary, DoJ, having acquired the consent of the relevant persons, would refer the relevant enquiries or comments to the Law Society for follow-up as appropriate.

4948 LEGISLATIVE COUNCIL ― 21 April 2021

(3) and (4)

In relation to the intervention since 24 December 2020 undertaken by the Law Society mentioned in the question, the Law Society indicated that in deciding whether to exercise its statutory power to intervene into the practice of that intervened firm, the Council had already taken into account all relevant circumstances and the risks to clients' money being misappropriated, and accordingly decided to exercise its statutory power to so intervene.

DoJ understands the impact of such intervention on the clients of the intervened firm, and has since then been in touch with the Law Society. Further, DoJ understands that the Hong Kong Monetary Authority ("HKMA") has, since it became aware of the incident, also been closely monitoring the impact of the incident on bank customers and has requested banks to proactively approach affected customers and provide appropriate assistance in a reasonable and accommodating manner. HKMA is currently studying with the banking industry an alternative payment arrangement for property transactions and the related operational flows and details. The arrangement aims at enabling settlement of the payments of the property mortgage loan proceeds (and other sizable funds) in property transactions without involving funds going through law firms, while preserving the primary roles and legal responsibilities of the various parties in a property transaction (including the buyer, the seller, their respective lawyers, and their respective mortgage banks (if applicable)). This would help minimize any impact on banks and customers in case the operation of a law firm is materially at issue, as well as enhance protection to the parties concerned. HKMA and the banking industry are actively discussing and following up with the relevant stakeholders (including the Law Society) on the alternative payment arrangement proposal. DoJ is willing to assist when needed.

Besides, in a set of litigation in relation to the aforementioned intervened firm, the court indicated that it would be ready to provide such assistance and directions as may be sought.(5)

(5) Ng Wing Hung v The Council of the Law Society of Hong Kong (HCAL 70/2021) [2021] HKCFI 379. LEGISLATIVE COUNCIL ― 21 April 2021 4949

As the regulatory body of solicitors in Hong Kong, the Law Society has already set up a working group to review the intervention process, and also indicated that it would keep their operation under constant review and is always open to suggestions with a view to improving it. DoJ will continue to maintain communication with the legal industry and other stakeholders in this regard.

Annex

Information about the names of firms intervened by the Law Society between 2011 and 2020 and the respective dates of intervention (by chronological order)

Date of Intervention Name of the Intervened Firm (DD/MM/YYYY) 1. Jonathan Rostron Solicitors 27/04/2011 2. Finley & Co. 09/01/2012 3. Hagon Wai & Partners 25/04/2012 4. Erving Brettell 25/04/2012 5. Joseph Tang & Co. 15/08/2012 6. S.K. Wong & Lee 28/05/2013 7. Chung Fong & Co. 04/10/2013 8. Lai & Associates 30/09/2014 9. Eddie P.L. Law & Co. 04/01/2016 10. Alan Ho & Co. 14/04/2016 11. S. Cheng & Yeung 02/09/2016 12. Tang & Associates 28/09/2016 13. Phillips 25/01/2017 14. George Chan & Co. 17/08/2017 15. Ching & Solicitors 27/03/2018 16. K.M. Cheung & Co., Solicitors 13/06/2018 17. Net Craman Abogados Asociados, SLP 12/12/2018 18. Wong & Wong 14/12/2018 19. Tong Chan & Co. 14/03/2019 20. Jim & Co., Solicitors 20/06/2019 21. A.M. Mui & Kwan, Solicitors & Notaries 25/09/2019 22. S.W. Tai & Co. 13/05/2020 23. Wong, Fung & Co. 24/12/2020

4950 LEGISLATIVE COUNCIL ― 21 April 2021

Planning and development of New Development Areas

4. MR ABRAHAM SHEK: President, a planning study commissioned in the late 1990s identified Kwu Tung North ("KTN") and Fanling North ("FLN") as suitable New Development Areas ("NDAs"). In July 2013, the Government adopted an Enhanced Conventional New Town Approach for these two NDAs, under which private land owners may apply for lease modification (including in-situ land exchange) for private developments. Site formation and engineering infrastructure works for the First Phase development of the two NDAs did not commence until September 2019. As the first resident intake for the two NDAs will not take place until the 2025-2026 financial year, i.e. about three decades after the inception of the development intention, some members of the public have criticized the unduly long planning and development process of NDAs. In this connection, will the Government inform this Council:

(1) of the latest progress of the Remaining Phase of site formation and engineering infrastructure works at KTN and FLN NDAs;

(2) of the respective numbers of applications for lease modification (including land exchange) in respect of private lots falling within the sites under the Remaining Phase of the two NDAs development (i) received by the Lands Department ("LandsD"), (ii) being processed by LandsD, and (iii) concluded with the applicant's acceptance of a binding basic terms offer (including premium);

(3) whether it will consider taking measures to shorten the whole planning and development process of an NDA, so as to expedite the increase in housing supply;

(4) whether, in order to expedite implementation of residential developments in NDAs, the Government will consider, by way of lease modifications for private lots in NDAs, entrusting the developers of such lots to build and then hand over to the Government those infrastructure works (e.g. building linking roads) in areas adjacent to the lots; and

(5) whether it will review and relax the General Criteria for Consideration of Lease Modification (including in-situ Land Exchange) Applications in the two NDAs, as set out in LandsD's LEGISLATIVE COUNCIL ― 21 April 2021 4951

Practice Note Issue No. 1/2014, with a view to attracting more lease modification applications and shortening the processing time for such applications, thereby expediting the increase in housing supply?

SECRETARY FOR DEVELOPMENT: President, Kwu Tung North/Fanling North New Development Area ("KTN/FLN NDA") is the first New Development Area ("NDA") project in the New Territories proceeding to implementation stage. Being one of the major sources of housing supply for the territory in the medium to long term, upon full development, it will provide a total of about 71 800 housing units (including about 48 500 public housing units and 23 300 private housing units), accommodating additional population of about 188 100.

Regarding the various parts of the question, after consulting the relevant departments, I reply as follows:

(1) KTN/FLN NDA is being implemented in two phases: first phase and remaining phase. With the funding approval given in May 2019, land resumption and clearance and the site formation and infrastructure works for the first phase development and the detailed design for the remaining phase commenced in September 2019 and December 2019 respectively, and have been progressing as scheduled. Subject to funding approval, site formation and infrastructure works for the remaining phase development is scheduled for commencement in 2024 for completion in 2031.

(2) An Enhanced Conventional New Town Approach ("ECNTA") is adopted for implementing KTN/FLN NDA. Under this approach, the Government will resume and clear all the private land planned for public works projects, public housing and private developments, etc., carry out site formation works and provide infrastructure etc., before allocating the land for various purposes including disposal of land for private developments. Prior to the resumption and clearance of land, the Government may allow in situ land exchange applications from private land owners of sites earmarked for private developments, subject to their meeting of the criteria and conditions as specified in the LAO Practice Note No. 1/2014 ("PN") promulgated by the Lands Department in February 2014.

4952 LEGISLATIVE COUNCIL ― 21 April 2021

The processing of in situ land exchange applications for the first phase development had been completed in 2017 and two applications were approved. We have also received 13 land exchange applications for land within the remaining phase development. The infrastructure works of the remaining phase development is in its detailed design stage with implementation planned for commencement in 2024, and we are processing the applications received having regard to such time frame. Information on the applications received will be published as and when they have been accepted for further processing under the existing mechanism.

(3) To develop an NDA or a new town, it usually takes more than 10 years from planning and building to commencement of population intake owing to the relative large scale. The actual progress may be subject to a variety of factors such as the complexity of individual projects, time required for statutory and administrative procedures, resource allocation, as well as progress of compensation and rehousing arrangement, etc. We have adopted appropriate measures to expedite the NDA project delivery, including merging the original six development phases into two and making use of private initiative through ECNTA to speed up the implementation. In this regard, the first population intake in KTN/FLN NDA will come from a private housing development scheduled for completion in 2023, which is only four years after the funding approval in 2019, whereas the large-scale public housing development under the first phase is expected to complete in 2026. For the implementation of the remaining phase development, we will continue to explore various practicable measures to expedite project delivery, e.g. compressing the time for technical studies as far as possible, speeding up the statutory procedures and conducting various procedures concurrently as circumstances permit.

(4) and (5)

The PN specifies the general criteria for consideration of lease modification (including in situ land exchange) application for the KTN/FLN NDA under ECNTA and we have no intention to amend such criteria at this stage. We would speed up the processing of the land exchange applications as far as practicable with a view to LEGISLATIVE COUNCIL ― 21 April 2021 4953

expediting the housing supply. The newly established Development Projects Facilitation Office under the Development Bureau will also facilitate the processing of development approval applications for private residential developments with 500 flats or more.

The design and construction of the infrastructures for NDA, including roads, are currently coordinated by the Civil Engineering and Development Department. Entrusting the infrastructure works to individual developers might not be more efficient or cost-effective. If such works cost is to be deducted from the land premium, which constitutes Government revenue, whether such arrangement is cost-effective or not would also involve considerations on proper use of public funds. Notwithstanding, we will fully explore any feasible proposals when processing the applications for lease modification (including in situ land exchange).

Cross-boundary cultural exchange activities

5. MR MA FUNG-KWOK (in Chinese): President, the Leisure and Cultural Services Department ("LCSD") has been provided with a funding of $140 million in the five years starting from the 2018-2019 financial year to support local arts groups and artists to conduct cultural exchanges in the Guangdong-Hong Kong-Macao Greater Bay Area ("Greater Bay Area"). Moreover, the Ministry of Culture and Tourism and the Office of the Leading Group for the Development of the Guangdong-Hong Kong-Macao Greater Bay Area under the State Council, together with the People's Government of Guangdong Province, jointly published on 24 December 2020 the Culture and Tourism Development Plan for the Guangdong-Hong Kong-Macao Greater Bay Area, setting out guiding directions for the overall cultural and tourism development of the Greater Bay Area. In this connection, will the Government inform this Council:

(1) of the expenditure incurred by LCSD in the past three financial years for supporting local arts groups and artists for conducting cultural exchange activities in the Mainland cities of the Greater Bay Area, as well as the current balance of the funding;

4954 LEGISLATIVE COUNCIL ― 21 April 2021

(2) of the respective numbers of local arts groups and artists funded by public money in the past three financial years for conducting cultural exchange activities in the Mainland cities of the Greater Bay Area; the details of such cultural exchange activities; whether it has assessed the effectiveness of the Government's efforts in promoting such type of cultural exchange activities; if so, of the details;

(3) whether it will discuss with the Hong Kong Arts Development Council ("HKADC") the relaxation of the criteria for grants under HKADC's Arts Development Fund (Cultural Exchange Project) (e.g. expanding the scope of the expenditure items which are eligible for grants, increasing the ratio of the amount of the grant to the budgeted total expenditure of an activity) to encourage local arts groups and artists to conduct outbound cultural exchange activities (particularly to the Mainland cities of the Greater Bay Area); if so, of the details; if not, the reasons for that;

(4) of the measures in place to tackle the impediments posed by the Coronavirus Disease 2019 epidemic so as to assist local arts groups and artists in promoting the fruits of their efforts in culture and arts in the Mainland cities of the Greater Bay Area; the preparation made by the Government to facilitate a swift commencement of cultural exchange activities in the Greater Bay Area upon the resumption of normal traveller clearance between the Mainland and Hong Kong;

(5) of the measures in place to complement the Culture and Tourism Development Plan for the Guangdong-Hong Kong-Macao Greater Bay Area, with a view to providing further support for local arts groups and artists to take part in the promotion of cultural development in the Greater Bay Area; and

(6) whether the approach of setting up a Cultural Exchange Division in the Hong Kong Office in Beijing will be extended to the Hong Kong Economic and Trade Office in Guangdong, with a view to strengthening the liaison work between the SAR Government and the relevant departments and bodies in the Mainland cities of the Greater Bay Area, thereby facilitating cultural exchange activities; if so, of the details, if not, the reasons for that?

LEGISLATIVE COUNCIL ― 21 April 2021 4955

SECRETARY FOR HOME AFFAIRS (in Chinese): President,

(1) The Leisure and Cultural Services Department ("LCSD") was allocated a five-year funding of $140 million from 2018-19 onwards to support Hong Kong arts groups and artists for cultural exchanges in the Guangdong-Hong Kong-Macao Greater Bay Area ("GBA"). The direct production cost in staging cultural exchange activities in GBA and related activities in Hong Kong amounts to $20 million, $22.09 million and $3.73 million in 2018-2019, 2019-2020 and 2020-2021 respectively, covering commissioning fee, artist fee, production, transportation, publicity as well as other related expenses. The estimated expenditure for the remaining two years would be around $24.6 million per annum.

(2) In the past three financial years, LCSD has made use of the additional funding to embark on cultural exchange activities in GBA actively to showcase the arts and culture of Hong Kong. It has also successfully cooperated with venue operators in GBA to build up a collaboration network and regular liaison mechanism. A total of 36 productions of various arts forms were staged in seven GBA cities. Due to the COVID-19 pandemic, the touring programmes scheduled for 2020-2021 were either postponed to 2021-2022 or conducted online.

The Arts Development Fund (Cultural Exchange Project) was set up by the Home Affairs Bureau ("HAB") to promote cultural exchanges between Hong Kong and other places. In 2018-2019 and 2019-2020, four arts groups were funded to stage 24 performances in the Mainland cities in GBA. To fulfil the conditions of grants and reimburse expenses, the grantees were required to, on completion of their activities, submit detailed evaluation reports on the effectiveness of their activities.

In addition, HAB has provided subsidy to Hong Kong arts groups/artists through the Hong Kong Economic and Trade Office in Guangdong ("GDETO") for cultural exchange activities in the Mainland cities in GBA. In the past three financial years, five arts groups were supported to stage 11 performances. GDETO would review the effectiveness of the performances after their completion. 4956 LEGISLATIVE COUNCIL ― 21 April 2021

According to the review reports, the performances were well received by the audience in the Mainland cities in GBA and facilitated the audience's understanding of the characteristics of the arts and culture in Hong Kong; and the professional standards of Hong Kong arts groups were appreciated.

HAB is also responsible for providing recurrent subvention to the Hong Kong Arts Development Council ("HKADC"). HKADC uses the subvention to operate different grant schemes, of which the Cultural Exchange Project Grant is dedicated to providing support to arts groups/artists for cultural exchange. HKADC also provides designated funding to support Hong Kong arts groups/artists to participate in Mainland arts festivals. In the past three financial years, HKADC provided grants to 12 artists/arts groups which conducted 14 cultural exchange programmes in various art forms in the Mainland cities in GBA. The grants are provided on reimbursement basis. The arts groups/artists receiving grants are required to submit project reports and financial reports to HKADC for disbursement of grants.

(3) Since 1 April 2020, HKADC has taken over the administration of the Arts Development Fund and merged it with HKADC's Cultural Exchange Project Grant to streamline administrative work with a view to providing one-stop services to arts groups and artists. After consolidating the resources, applications under the Cultural Exchange Project Grant have been processed under two categories, including Cultural Exchange Trial Version and Cultural Exchange General Version. The maximum amount of grant is $150,000 for Trial Version, $500,000 for General Version and $800,000 for individual meritorious projects. HKADC has also removed the relevant limit on maximum grant which is based on the number of cities involved, thereby increasing the overall amount of grants for projects. As applicants come from different art forms and their artistic levels vary, the amount of grant is determined based on the merits of each application (such as content, budget, artistic level, expectations in the development and promotion of arts). It is not desirable to set a uniform grant level that is based on a certain percentage of the estimated total expenditure.

LEGISLATIVE COUNCIL ― 21 April 2021 4957

(4) Due to the COVID-19 pandemic, all cultural exchange programmes scheduled for 2020-2021 in GBA were postponed to 2021-2022 or conducted online. To enable audience in GBA and the Mainland to continue enjoying local productions during the pandemic, LCSD collaborated with its venue partners to broadcast four free online programmes on Mainland online platforms and attracted over 3.1 million views. To prepare for the swift resumption of GBA cultural exchange activities upon relaxation of travel restrictions, LCSD has secured dates for touring 14 productions in GBA. In parallel with live in-venue performances, LCSD also actively works with venue operators in promoting online programmes via their WeChat accounts and other Mainland online platforms to facilitate the understanding of Mainland audience on Hong Kong artists and art groups. This also helps broaden the audience base.

(5) LCSD will continue to strengthen the collaboration with venue operators in GBA and further support local artists and arts groups to conduct various activities in GBA. The relevant activities include curation of productions, participation in arts festivals and thematic events in GBA, building new branding with venue operators, organization of various fringe and educational activities, and exploration of more new small- and medium-sized venues. These support measures seek to provide more space and opportunities for Hong Kong arts groups to allow wider penetration of their work in the region. Besides, LCSD will organize cultural exchange workshops on technical and arts administration with its counterparts in GBA so as to provide better support for touring arts groups.

To further promote cultural exchanges in GBA, LCSD organizes the "Hong Kong Week2021@Guangzhou" from April to May 2021. In response to the COVID-19 pandemic, the "Hong Kong Week 2021" will feature both in-venue and online programmes. There will be a total of 15 programmes, including 11 performing arts programmes, one film programme and three exhibitions.

(6) HAB has provided funding to ETOs in the Mainland to recruit additional local staff since 2018-2019; and GDETO has therefore deployed dedicated staff to assist in the organization of cultural exchange activities between Hong Kong and the Mainland cities in 4958 LEGISLATIVE COUNCIL ― 21 April 2021

GBA and to strengthen connectivity among them. Moreover, LCSD has been actively promoting cultural exchange in GBA. Its Cultural Exchange Liaison Office ("CXLO") is responsible for commissioning and staging productions of local arts groups/artists in GBA cities and has formulated cooperation plans and liaison mechanism with cultural venue partners in the Mainland to present productions suitable for GBA cities. CXLO maintains close communication with GDETO to provide publicity and other support to the programmes.

Non-locally trained medical graduates and medical practitioners

6. MR TOMMY CHEUNG (in Chinese): President, a non-locally trained medical practitioner is required to pass the Licensing Examination administered by the Medical Council of Hong Kong ("MCHK") and work as an intern and undergo a period of assessment of normally 12 months in an approved hospital before he/she may apply to be a registered medical practitioner. The Licentiate Committee of MCHK is responsible for conducting the Licensing Examination, while the Internship Sub-committee under the Licentiate Committee makes internship arrangements in collaboration with the Central Internship Committee of the Hospital Authority ("HA") as well as supervises and assesses the performance of interns. In this connection, will the Government inform this Council:

(1) given that some Hong Kong people who studied medicine in overseas places and graduated with flying colours are not eligible for taking the Licensing Examination as they have not completed medical training in such places, whether the Government will amend the Medical Registration Ordinance (Cap. 161) to permit non-locally trained medical graduates who have not completed medical training to take the Licensing Examination; if so, of the details and timetable; if not, the reasons for that;

(2) as the Singapore authorities have stipulated that fresh graduates of overseas medical schools recognized by them may apply for provisional registration in Singapore after one year of internship in the public hospitals in Singapore, whether the Government will follow such practice and require that such graduates must serve in LEGISLATIVE COUNCIL ― 21 April 2021 4959

the public hospitals for a specified period of time, so as to increase the manpower of medical practitioners in the public hospitals; if so, of the details; if not, the reasons for that;

(3) whether the channels for locally trained and non-locally trained medical graduates to apply for internships are the same; if not, of the reasons for that;

(4) of the terms of reference and membership list of HA's Central Internship Committee;

(5) of the mechanism and criteria for selecting medical graduates to work as interns, and whether locally and non-locally trained medical graduates are treated equally; if not, of the reasons for that;

(6) of the respective numbers of internship places offered to locally and non-locally trained medical graduates by (i) HA, (ii) the Department of Health and (iii) the faculties of medicine of the two universities in each of the past five years; the criteria for setting the quotas of such places;

(7) of the mechanism for assessing the performance of interns; and

(8) of the medium and long term measures in place to further facilitate non-locally trained medical graduates and medical practitioners to come to Hong Kong to practise?

SECRETARY FOR FOOD AND HEALTH (in Chinese): President, my reply to the question raised by Mr Tommy CHEUNG is as follows:

(1), (2) and (8)

The Government has adopted a multi-pronged strategy to tackle the severe shortage of doctors in the public healthcare system by, inter alia, increasing the number of medical training places, providing funding for universities to upgrade and increase their healthcare training facilities, as well as supporting the manpower initiatives of the Hospital Authority ("HA").

4960 LEGISLATIVE COUNCIL ― 21 April 2021

To attract non-locally trained doctors to practise in Hong Kong, the Medical Council of Hong Kong ("MCHK") has, since August 2019, shortened the period of assessment from six months to two days for non-locally trained specialists who have passed the Licensing Examination and have already worked full-time in the public healthcare sector for three years. Besides, several Colleges of the Hong Kong Academy of Medicine ("HKAM") have agreed to admit non-locally trained doctors with qualifications at the pre-intermediate level for continuation of their specialist training in Hong Kong on the premise that the specialist training opportunities for locally trained doctors will not be compromised.

Upon relaxation of the threshold for non-locally trained doctors to practise in Hong Kong, their number and percentage among all newly registered doctors during the same period have slightly increased. However, they are far from sufficient to fill the shortfall. The Government hence considers it necessary to create a new pathway (i.e. special registration) under the existing Medical Registration Ordinance (Cap. 161) ("MRO") to allow more qualified non-locally trained Hong Kong doctors to practise in our public healthcare sector so as to increase the supply of doctors in Hong Kong.

We propose that a non-locally trained doctor may apply for special registration subject to the following criteria being met:

(i) he/she is a Hong Kong Permanent Resident;

(ii) he/she is a graduate of a recognized medical school outside Hong Kong, and has been registered as a medical practitioner or has obtained a specialist qualification in any country or region where the recognized medical schools are located; and

(iii) he/she has been engaged in full-time employment in any of the local public healthcare institutions (i.e. HA, the Department of Health, the University of Hong Kong ("HKU") and The Chinese University of Hong Kong ("CUHK")).

LEGISLATIVE COUNCIL ― 21 April 2021 4961

The proposed requirement for an applicant to have been registered as a medical practitioner or obtained a specialist qualification in the country or region where the recognized medical schools are located is meant to ensure that his/her standard of practice has been recognized.

A non-locally trained doctor who has been registered as a specialist in the country or region of practising medicine and whose qualifications are recognized by HKAM may apply for full registration after working in the public healthcare institutions for a specified period and passing the on-the-job assessment. For those who have yet to receive specialist training in the country or region of practising medicine, they will have to complete the entire specialist training in Hong Kong, which normally lasts for at least six years. As for those who have attained a qualification comparable to the pre-intermediate/intermediate examinations of constituent Colleges of HKAM, they will have to continue the remaining specialist training (for a period of at least three to five years) in Hong Kong. After obtaining a recognized specialist qualification from HKAM, they are required to work in the public healthcare institutions for a specified period and pass the on-the-job assessment before they can apply for full registration.

The Government will introduce the relevant bill into the Legislative Council in the second quarter of this year to take forward the above mentioned proposal.

(3), (5) and (6)

HA has been collaborating with MCHK and the faculties of medicine of the two local universities in promoting internship training opportunities for local medical graduates and non-locally trained doctors who have passed the Licensing Examination and upgrading their standards.

Under section 12 of MRO, a person who has passed the Licensing Examination or a qualifying examination administered by HKU or CUHK leading to the award of a degree of medicine and surgery may apply to MCHK for provisional registration for internship purpose. At present, HA is the sole provider of internship training 4962 LEGISLATIVE COUNCIL ― 21 April 2021

places while MCHK and the two local universities are responsible for ensuring the training standards and levels. Those who meet the internship training requirements under MRO are treated equally and will be offered internship training places by HA.

The numbers of medical interns working in HA in the financial years from 2015-2016 to 2019-2020 are as follows:

Financial Year Number of Interns 2015-2016 368 2016-2017 373 2017-2018 470 2018-2019 469 2019-2020 475

Note:

The statistics for 2020-2021 are still under compilation.

HA does not maintain information on the respective internship places for local medical graduates and non-locally trained doctors who have passed the Licensing Examination.

(4) The Central Internship Committee ("CIC") set up by HA is responsible for overseeing matters relating to internship training, which include monitoring and improving the quality of internship training. Members of CIC include the Chairman of the Internship Sub-committee under the Licentiate Committee of MCHK, representatives of the medical schools of the two local universities, HA executives and senior doctors in public hospitals. The current membership of CIC is at Annex.

To ensure that internship training meets the standards of medical training, CIC monitors the working and training arrangements of interns on a regular basis, and advises HA and the two local medical schools on changes that need to be made to those arrangements. In addition, CIC is responsible for drawing up the eligibility criteria for intern training sites. These criteria form the basis on which all hospitals and hospital departments are assessed for the purpose of training post accreditation. CIC also maintains close LEGISLATIVE COUNCIL ― 21 April 2021 4963

communication with training hospitals and collects feedback from interns regularly, so as to ensure compliance with the standards and requirements of internship training.

(7) Medical interns will be deployed to various specialties of different hospitals during the training period. They will be assessed by each specialty according to relevant standards and levels. They are required to pass the assessment in order to complete the internship training and obtain a certificate of experience from MCHK or the two local universities before they can apply to MCHK for full registration.

Annex

Membership of CIC of HA

Chairman: Dr Deacons T K YEUNG Members: Prof Francis K L CHAN Prof Gabriel M LEUNG Prof Grace Lai Hung WONG Prof Gilberto K K LEUNG Prof Shekhar Madhukar KUMTA Dr Gordon T C WONG Dr Michael T H CO Dr Siu Ka MAK Dr Miranda C M CHAN Dr Tsz Leung LEE Dr Kam Kwong WONG Dr Sharon M Y WONG

Small House Policy

7. MR KENNETH LAU (in Chinese): President, according to the Small House Policy ("the Policy"), a New Territories male indigenous villager over 18 years old is entitled to one concessionary grant during his lifetime to build one small house. However, following a judgment handed down by the Court of First 4964 LEGISLATIVE COUNCIL ― 21 April 2021

Instance of the High Court on 8 April 2019 on a judicial review case of the Policy, the Government suspended the receipt and processing of applications for building small houses on government land by way of Private Treaty Grant ("PTG") and Land Exchange. In a judgment handed down on 13 January 2021 on the appeals against the ruling of the said case, the Court of Appeal ruled that the arrangements of Free Building Licence, PTG and Land Exchange under the Policy are lawful traditional rights and interests of the indigenous villagers of the New Territories within the meaning of Article 40 of the Basic Law, and are lawful and constitutional. The Government subsequently resumed on 22 February 2021 the receipt and processing of the aforesaid applications. In this connection, will the Government inform this Council:

(1) of the respective numbers of applications for building small houses which were (i) received, (ii) approved, (iii) rejected and (iv) being processed by the Government in each of the past 10 years, and set out in the table below a breakdown by the aforesaid three ways of small house grant;

Free Building PTG Land Exchange Year Licence (i) (ii) (iii) (iv) (i) (ii) (iii) (iv) (i) (ii) (iii) (iv)

(2) of a breakdown of the number of rejected applications mentioned in (1) by reason; if such figures are unavailable, whether it will compile such statistics;

(3) of the respective numbers of applications for building small houses awaiting to be processed which were submitted to the Government (i) within the period from 8 April 2019 to 21 February 2021 and (ii) on or after 22 February 2021, with a breakdown by the aforesaid three ways of small house grant; and

(4) of the measures in place to expedite the vetting and approval of applications for building small houses?

LEGISLATIVE COUNCIL ― 21 April 2021 4965

SECRETARY FOR DEVELOPMENT (in Chinese): President,

(1) The statistics of various small house applications in the past 10 years is set out in the table below:

Private Treaty Grant Free Building Licence(1) to (4) Land Exchange(1) to (4) Year ("PTG")(1) to (4) (i) (ii) (iii) (iv) (i) (ii) (iii) (iv) (i) (ii) (iii) (iv) 2011 1 736 935 667 4 330 629 89 368 2 482 9 17 7 83 2012 2 074 935 681 4 834 553 159 496 2 230 63 27 13 111 2013 2 012 836 664 4 828 520 147 290 2 240 34 28 26 108 2014 2 031 980 818 6 228 457 109 358 2 256 34 25 17 85 2015 1 944 848 817 6 528 583 125 432 2 180 20 16 14 92 2016 878 728 707 6 911 396 104 362 2 148 23 26 11 86 2017 785 720 782 6 301 309 74 268 2 171 35 24 11 76 2018 973 724 751 5 981 372 86 326 2 173 5 20 3 69 2019(5) 1 637 547 674 6 396 517 13 133 0 21 5 8 23 2020(5) 814 277 553 7 091 0 0 11 0 0 1 3 22

Notes:

(1) (i) the number of small house applications received, (ii) the number of small house applications approved, (iii) the number of small house applications rejected, and (iv) the number of small house applications being processed as at 31 December in that year.

(2) As the processing of applications received in a year may not be completed in the same year, the applications approved, rejected and being processed in a year may not correspond with the applications received during the same year.

(3) The figures in item (iii) include the number of small house applications withdrawn by the applicants.

(4) The figures in item (iv) exclude the number of applications received but pending processing.

(5) In light of the judgment handed down by the Court of First Instance ("CFI") on 8 April 2019 on the judicial review of the Small House Policy, the Lands Department ("LandsD") suspended the receipt and processing of applications for Government land to build small houses by way of PTG and Land Exchange between 8 April 2019 and 21 February 2021.

(2) In general, the main reasons for rejecting small house applications include the applicant not being the sole legal registered owner of the lot under application, the lot involving land title/boundary problems or the land registration process pending completion, or the application failing to fulfil the technical requirements under the regulatory regimes of other government departments, etc. LandsD at present does not compile statistics on the reasons for rejecting 4966 LEGISLATIVE COUNCIL ― 21 April 2021

small house applications, but will actively consider compiling such statistics on applications rejected in future.

(3) The breakdown of the number of small house applications received by LandsD within the two periods specified below are listed as follows:

Free Land Building PTG Exchange Licence From 1 April 2019 to 1 670 0(1) 1(1) 21 February 2021 From 22 February 2021 to 70 30 0 31 March 2021

Note:

(1) In light of the judgment handed down by CFI on the judicial review of the Small House Policy, LandsD suspended the receipt and processing of applications for Government land to build small houses by way of PTG and Land Exchange between 8 April 2019 and 21 February 2021. Therefore, the small house applications received in the period does not include these two types of applications.

(4) The time taken by LandsD to process each small house application will vary depending on the complexity of issues involved in each application, such as whether there are local objection, land title or boundary problems, or whether there are requirements to be fulfilled in advance under other regulatory regimes. LandsD, through the standing communication channel with the Heung Yee Kuk, will continue to keep in view its work in processing small house applications and streamline the process where necessary with a view to shortening the time required.

Development of an Islamic financial market

8. MRS REGINA IP (in Chinese): President, in 2007, the then Chief Executive mentioned for the first time in his Policy Address the introduction of Islamic finance and the development of an Islamic bond ("sukuk") market in Hong Kong. To this end, the Government amended the Inland Revenue Ordinance (Cap. 112) and Stamp Duty Ordinance (Cap. 117) to provide, for the LEGISLATIVE COUNCIL ― 21 April 2021 4967 issuance of sukuks, a tax structure comparable to that for conventional bonds. Subsequently, the Government issued three tranches of USD-denominated sukuks in September 2014, June 2015 and February 2017 respectively. In this connection, will the Government inform this Council:

(1) of the development of the Islamic financial market in Hong Kong since the issuance of the third tranche of USD-denominated sukuks; Hong Kong's market share in global Islamic financial activities and the annual changes in such market share, in each of the past three years;

(2) of the challenges, according to the Government's latest evaluation, that it needs to face in developing an Islamic financial market in Hong Kong; Hong Kong's competitive edges, as compared with the neighbouring regions (e.g. Singapore), in developing an Islamic financial market;

(3) of the details of the Government's latest plans to strengthen market infrastructure, nurture talents, encourage product development and foster cooperation with other Islamic financial markets, for the purpose of developing an Islamic financial market in Hong Kong; and

(4) whether the Government has formulated quantitative performance indicators for the coming 5, 10 and 15 years with regard to its efforts to develop an Islamic financial market in Hong Kong; if so, of the details; if not, the reasons for that?

SECRETARY FOR FINANCIAL SERVICES AND THE TREASURY (in Chinese): President, in consultation with the Hong Kong Monetary Authority, our consolidated reply to Mrs Regina IP is as follows:

Over the past few years, to promote the development of Islamic finance including the sukuk market in Hong Kong, we have taken concrete steps to build a conducive platform for sukuk issuance, including amending our laws in 2013 and 2014 respectively to provide a tax structure for sukuk which is comparable with that for conventional bonds, and to allow for the issuance of sukuk under the Government Bond Programme.

4968 LEGISLATIVE COUNCIL ― 21 April 2021

In 2014, 2015 and 2017, three sukuk of different structures and tenors totalling US$3 billion were issued under the Government Bond Programme to demonstrate to the global market the strengths of our Islamic finance platform, with a view to attracting more issuers and investors to participate in the capital market of Hong Kong. The three issuances have helped to demonstrate the viability of Hong Kong's platform and that our legal, regulatory and taxation framework can readily support sukuk issuances, including sukuk of different structures. We believe that these market development efforts have helped enhance the attractiveness of Hong Kong's sukuk platform vis-a-vis other financial centres in the region. In fact, an array of Islamic financial products and services have been introduced in Hong Kong, including the listing of global sukuk on the Hong Kong Stock Exchange, Islamic funds and Islamic banking windows.

The future development of the sukuk market is market-driven and depends on a number of factors, including issuer and investor appetite. Its development in Hong Kong is currently somewhat constrained by the overall market sentiments and demand. However, the global financial market is fast changing. We will continue to monitor the development of the domestic and global Islamic finance market as well as other emerging trends and opportunities in the global financial market, and keep such factors in view in considering the way forward.

We will also continue to strengthen the promotion of the merits of Hong Kong's financial system and market overseas, so as to attract foreign investment or financing activities in Hong Kong. For instance, our Bureau has held a number of online seminars and exchanges through the Hong Kong Economic and Trade Offices (including Toronto, Sydney, New York, San Francisco, Singapore, Indonesia) since the middle of last year. The target participants included market institutions and stakeholders who were interested in taking part in our Muslim financial activities.

The Protection of Wages on Insolvency Fund

9. MR WONG KWOK-KIN (in Chinese): President, with the Coronavirus Disease 2019 epidemic having dealt a heavy blow to Hong Kong's economy, and the Government no longer providing employers with wage subsidies through the Employment Support Scheme since December last year, the unemployment rate has continued to rise in recent months. Some representatives of trade unions have anticipated that there will be a sharp increase in the number of applications LEGISLATIVE COUNCIL ― 21 April 2021 4969 for ex gratia payments made to the Protection of Wages on Insolvency Fund ("the Fund") by those employees who have been owed (i) wages, (ii) pay for untaken annual leave and statutory holidays, (iii) wages in lieu of notice and (iv) severance payments. In this connection, will the Government inform this Council:

(1) of the respective monthly numbers of applications for ex gratia payments (i) received, (ii) being processed and (iii) approved, as well as the balance of the Fund at the end of each month, in the past three years;

(2) of (i) the average and (ii) the longest durations between the time when employees submitted applications for ex gratia payments to the Labour Department ("LD") and the time when payments were disbursed to them, in each of the past three years; whether the special work arrangements implemented by the Government last year due to the epidemic lengthened the time needed for processing such applications;

(3) in respect of the applications for each of the aforesaid four types of ex gratia payments, of the average amount of payment applied for in such applications, and the number of such applications in which the amount of payment applied for was the relevant ceiling, in each of the past three years;

(4) whether it will consider publishing on LD's website, on a monthly or quarterly basis, the updated monthly information on the Fund (including the aforesaid statistics);

(5) given that the Protection of Wages on Insolvency Fund Board is conducting a review on the scope of protection of the Fund, of the progress and outcome of the review; as the ceilings for the aforesaid four types of ex gratia payments have not been adjusted for years, whether the Government will propose to the Board that the ceilings be raised, e.g. raising the ceiling for ex gratia payment for wages in arrears from the existing $36,000 to $76,000, which is equivalent to four months' wages for an employee with the median monthly employment earning (i.e. $19,000) in the second quarter of last year; and

4970 LEGISLATIVE COUNCIL ― 21 April 2021

(6) whether LD will adopt measures to expedite the processing of applications for ex gratia payments, or extend the time limit for making such applications?

SECRETARY FOR LABOUR AND WELFARE (in Chinese): President, my reply to the Member's question is as follows:

(1) From 2018 to 2020, the number of applications received by the Protection of Wages on Insolvency Fund ("the Fund") in each month is set out at Annex 1. During the same period, the number of applications processed, the number of applications with ex gratia payment approved, and the accumulated surplus of the Fund are set out at Annex 2.

(2) Upon receipt of applications to the Fund from employees, the Labour Department ("LD") will kick off the procedures of handling such applications immediately, which include liaising with employers, provisional liquidators/liquidators, trustees of Mandatory Provident Fund ("MPF") schemes, the Legal Aid Department, and, where necessary, requesting the applicants to provide further information, etc., for the purpose of collecting the necessary information and documents for verifying the applications and making ex gratia payment. Ex gratia payment could only be granted to qualified applicants after LD has received all the relevant information and documents required for processing the applications. Yet whether the information and documents are adequate is often beyond the control of LD (for example, it takes a longer time for individual employers or liquidators to compile the employment records of employees, individual employees are unable to promptly furnish information to support their applications, etc.). As such, LD does not keep information on the durations between the time when LD receives an application from an employee and the time when the Fund effects ex gratia payment to the employee concerned. Instead, LD keeps information on the time required to effect payment upon receipt of all information and documents required for processing the applications. From 2018 to 2020, the average time and the longest time required to effect payment upon receipt of all information and documents required for processing the applications LEGISLATIVE COUNCIL ― 21 April 2021 4971

by LD are set out at Annex 3. The average time and the longest time required to effect payment in 2020 were similar to those of the previous two years.

(3) From 2018 to 2020, the average claim amounts per application and the number of applications reaching the upper limits of the ex gratia payment with a breakdown by payment items of the Fund are set out at Annex 4.

(4) The Protection of Wages on Insolvency Fund Board ("the Board") compiles its annual report in each financial year showing the details of the operation of the Fund and its key statistics, including the number of applications received and approved as well as the financial position of the Fund, etc. In addition, the number of applications received and processed by the Fund and the amount of ex gratia payment granted each year are set out in LD's annual report. The annual reports of the Board and LD are uploaded to LD's website to facilitate public access. These annual statistics and information can reflect the Fund's operation in a complete and holistic manner.

(5) Based on the information and data gathered, the Board conducts a review of the scope of coverage of all the payment items under the Fund. The Board has to conduct careful deliberation for holistic consideration, including the legislative proposal to be made by the Government to abolish the arrangement for "offsetting" severance payment/long service payment with the MPF contributions which may bring substantial impact on the operation and financial position of the Fund. When the Board completes the review, the Government will consult the Labour Advisory Board and report to the Panel on Manpower of the Legislative Council on the outcome of the review.

(6) Upon receipt of the applications to the Fund, LD will examine the information and documents of every application carefully and conduct verification prudently. It is targeted to issue ex gratia payment to qualified applicants within 10 weeks upon receipt of all relevant information and documents required for processing the 4972 LEGISLATIVE COUNCIL ― 21 April 2021

applications. LD reviews the procedures of verification of applications from time to time with a view to issuing ex gratia payment as soon as practicable.

Employees who are owed wages or other statutory entitlements by their employers should file their claims as soon as possible. At present, an employee should apply to the Fund within six months upon the termination of employment contract. Extending the time limit for submission of application may render it difficult to verify the application when employment records and other information are incomplete.

Annex 1

Number of applications received by the Fund from 2018 to 2020

Month No. of applications received January 2018 168 February 2018 162 March 2018 220 April 2018 112 May 2018 127 June 2018 164 July 2018 203 August 2018 215 September 2018 237 October 2018 279 November 2018 247 December 2018 142 January 2019 303 February 2019 196 March 2019 539 April 2019 231 LEGISLATIVE COUNCIL ― 21 April 2021 4973

Month No. of applications received May 2019 171 June 2019 178 July 2019 151 August 2019 256 September 2019 146 October 2019 304 November 2019 375 December 2019 321 January 2020 324 February 2020 148 March 2020 166 April 2020 196 May 2020 338 June 2020 275 July 2020 283 August 2020 108 September 2020 431 October 2020 256 November 2020 247 December 2020 248

Note:

Applications are reckoned on a per-employee basis.

Annex 2

Number of applications for ex gratia payment processed and approved and the accumulated surplus of the Fund from 2018 to 2020

No. of No. of Accumulated surplus Month applications applications ($ million) processed* approved* (as at end of the month) January 2018 193 166 4,901.0 February 2018 124 116 4,926.8 4974 LEGISLATIVE COUNCIL ― 21 April 2021

No. of No. of Accumulated surplus Month applications applications ($ million) processed* approved* (as at end of the month) March 2018 149 135 5,024.7 April 2018 165 153 5,064.5 May 2018 156 132 5,103.1 June 2018 140 130 5,135.0 July 2018 162 144 5,172.3 August 2018 91 78 5,210.4 September 2018 101 66 5,243.5 October 2018 164 151 5,279.3 November 2018 278 258 5,313.5 December 2018 178 160 5,344.7 January 2019 202 183 5,380.7 February 2019 100 73 5,407.5 March 2019 141 100 5,437.9 April 2019 357 326 5,476.2 May 2019 247 202 5,519.5 June 2019 152 131 5,555.6 July 2019 284 268 5,593.9 August 2019 321 298 5,626.1 September 2019 448 406 5,652.6 October 2019 303 293 5,686.6 November 2019 135 91 5,724.5 December 2019 175 153 5,762.2 January 2020 180 158 5,798.2 February 2020 120 108 5,830.0 March 2020 245 232 5,852.5 April 2020 205 194 5,891.3 May 2020 206 188 5,929.7 June 2020 330 297 5,965.0 July 2020 230 179 6,001.8 August 2020 199 124 6,034.5 September 2020 302 274 6,066.1 October 2020 285 264 6,093.1 LEGISLATIVE COUNCIL ― 21 April 2021 4975

No. of No. of Accumulated surplus Month applications applications ($ million) processed* approved* (as at end of the month) November 2020 239 213 6,122.7 December 2020 212 197 6,153.1

Notes:

* Including applications received in the same period or before.

Applications are reckoned on a per-employee basis.

Annex 3

Time required to effect ex gratia payment from the Fund from 2018 to 2020

Time required to effect payment upon receipt of all information and documents required 2018 2019 2020 for processing the applications by LD Average time 2.1 weeks 2.2 weeks 2.1 weeks Longest time 7.7 weeks 6.1 weeks 6.4 weeks

Annex 4

Average claim amounts per application and the number of applications reaching the upper limits of the ex gratia payment by payment items of the Fund from 2018 to 2020

No. of applications Average reaching the upper limit Year Payment Items# Claim of the ex gratia payment Amounts ($) of the Fund 2018 Wages 38,475 598 Wages in lieu of notice 27,316 356 Severance payment 116,718 98 Pay for untaken annual leave 10,864 330 and/or statutory holidays 4976 LEGISLATIVE COUNCIL ― 21 April 2021

No. of applications Average reaching the upper limit Year Payment Items# Claim of the ex gratia payment Amounts ($) of the Fund 2019 Wages 50,713 975 Wages in lieu of notice 29,953 561 Severance payment 91,892 104 Pay for untaken annual leave 11,098 516 and/or statutory holidays 2020 Wages 41,482 742 Wages in lieu of notice 23,499 532 Severance payment 67,188 50 Pay for untaken annual leave 10,998 465 and/or statutory holidays

Notes:

# Employees who are owed wages, wages in lieu of notice, severance payment, pay for untaken annual leave and/or pay for untaken statutory holidays by their insolvent employers may apply for ex gratia payment from the Fund.

Applications are reckoned on a per-employee basis.

Pilot scheme for fixed-rate mortgages

10. MR JIMMY NG (in Chinese): President, in delivering the 2020-2021 Budget, the Financial Secretary announced that the Hong Kong Mortgage Corporation Limited ("HKMC") would launch a pilot scheme for fixed-rate mortgages ("pilot scheme") to provide potential homebuyers with fixed-rate mortgage options for periods of 10, 15 and 20 years, with the loan amount being capped at $10 million. At the end of last year, HKMC extended the application period of the pilot scheme to 30 October this year, and lowered the interest rates per annum for mortgages for the aforesaid loan periods to 1.99%, 2.09% and 2.19% respectively. In this connection, will the Government inform this Council:

(1) of the respective numbers of applications received and approved by HKMC since the pilot scheme was launched, with a breakdown by loan period; the average loan amount of each approved application in respect of each loan period;

LEGISLATIVE COUNCIL ― 21 April 2021 4977

(2) whether it will request HKMC to (i) offer fixed-rate mortgage schemes with loan periods of 25 and 30 years respectively, (ii) raise the ceiling of the loan amount, and (iii) lower the interest rates per annum further; if so, of the details; if not, the reasons for that;

(3) as the website of HKMC shows that only nine banks are participating in the pilot scheme at present, whether the Government will persuade more banks to participate in the pilot scheme; if so, of the details;

(4) as there are comments that the pilot scheme has only received a lukewarm response from homebuyers, of the Government's measures to increase the attractiveness of the pilot scheme; and

(5) whether it will request HKMC to further extend the application period of the pilot scheme or regularize the scheme; if so, of the details; if not, the reasons for that?

SECRETARY FOR FINANCIAL SERVICES AND THE TREASURY (in Chinese): President, the Fixed-rate Mortgage Pilot Scheme with options for 10, 15 and 20 years aims to provide an alternative financing option to homebuyers for mitigating their risks arising from interest rate volatility, thereby enhancing banking stability in the long run. Having consulted the Hong Kong Mortgage Corporation Limited ("HKMC"), my reply to the various parts of the question is as follows:

(1) As of end-March 2021, the Fixed-rate Mortgage Pilot Scheme has received 50 applications, of which 36 have been approved, with an average loan amount of HK$5.25 million among the approved applications. Details are as follows:

Average loan Number of Number of amount of Period applications applications approved received approved applications (in HK$ million) 10-year 30 19 5.25 15-year 4 4 3.72 4978 LEGISLATIVE COUNCIL ― 21 April 2021

Average loan Number of Number of amount of Period applications applications approved received approved applications (in HK$ million) 20-year 16 13 5.72 Overall 50 36 5.25

(2) The Fixed-rate Mortgage Pilot Scheme remains open for applications. HKMC will review the effectiveness of the scheme (including the loan tenors) at an appropriate juncture before deciding the way forward.

The maximum loan amount of each private residential mortgage has been set according to business and risk management considerations. Considering the average loan amount of the approved applications so far (HK$5.25 million), HKMC does not see a need to change the maximum loan amount at this juncture.

In response to the change in market interest rates, HKMC adjusted the interest rates under the Fixed-rate Mortgage Pilot Scheme in November 2020.

(3) There are currently nine participating banks of different scales. This is appropriate for a pilot scheme.

(4) and (5)

Since the launch of the Fixed-rate Mortgage Pilot Scheme in May 2020, applications with loan amount totalling over HK$200 million have been received. Market demand for fixed-rate mortgages is affected by various factors such as product features, conditions of the economy and the property market, as well as interest rate trends. The pilot scheme will remain open for applications in the coming half year. HKMC will review the effectiveness of the scheme at an appropriate juncture, before deciding the way forward.

LEGISLATIVE COUNCIL ― 21 April 2021 4979

Services of the accident and emergency departments of public hospitals

11. DR CHIANG LAI-WAN (in Chinese): President, it has been reported that in October last year, a male patient who had been suffering from anti-phospholipid syndrome and taking anticoagulant Warfarin for a long period attended the accident and emergency ("A&E") department of a public hospital for treatment and was triaged as a patient of the "semi-urgent" category. After waiting for about two and a half hours for diagnosis and treatment at the A&E department, he was found by his family members to have stopped breathing. He was immediately given emergency treatment by healthcare personnel, but he eventually died from severe intracranial haemorrhage. In this connection, will the Government inform this Council if it knows:

(1) the overall average time for which patients waited for diagnoses and treatments at the A&E departments of public hospitals, and set out the relevant average waiting time by hospital and triage category, in each of the past two financial years;

(2) whether the Hospital Authority ("HA") will step up the training for those nurses responsible for triaging patients at A&E departments, so as to assist them in making triage decisions that are more accurate; if HA will, of the details; if not, the reasons for that;

(3) whether HA will stipulate specifically in the guidelines for the triage system those clinical presentations requiring attention when triaging patients who are taking Warfarin, so as to avoid underestimation of their conditions; if HA will, of the details; if not, the reasons for that;

(4) whether HA will, through (i) deploying nurses to conduct regular reviews and (ii) connecting patients to monitoring devices, monitor if the conditions of those "urgent" and "semi-urgent" patients waiting for diagnoses and treatments have worsened; if HA will, of the details; if not, the reasons for that; and

(5) the current establishment of healthcare personnel at each A&E department of public hospitals; whether HA has assessed if such manpower is sufficient to ensure that all patients at A&E departments can receive timely diagnoses and treatments?

4980 LEGISLATIVE COUNCIL ― 21 April 2021

SECRETARY FOR FOOD AND HEALTH (in Chinese): President, my reply to the various parts of the question raised by Dr CHIANG Lai-wan is as follows:

(1) The tables below set out the average waiting time for Accident and Emergency ("A&E") services by triage category in each hospital under the Hospital Authority ("HA") in 2018-2019 and 2019-2020.

2018-2019 Average waiting time (minutes) for A&E services Cluster Hospital Triage I Triage II Triage III Triage IV Triage V (Critical) (Emergency) (Urgent) (Semi-urgent) (Non-urgent) PYNEH 0 5 16 110 138 HKEC RH 0 7 16 81 136 SJH 0 7 13 25 34 HKWC QMH 0 9 25 90 149 KWH 0 7 35 133 131 KCC QEH 0 8 33 165 193 TKOH 0 8 23 135 151 KEC UCH 0 10 30 183 246 CMC 0 7 19 61 57 NLTH 0 8 15 36 53 KWC PMH 0 8 19 119 149 YCH 0 5 17 109 140 AHNH 0 7 26 71 72 NTEC NDH 0 8 25 123 165 PWH 0 11 45 178 163 POH 0 5 17 100 107 NTWC TMH 0 5 24 142 156 TSWH(1) 0 4 13 70 79 HA Overall 0 8 26 111 125

2019-2020 Average waiting time (minutes) for A&E services Cluster Hospital Triage I Triage II Triage III Triage IV Triage V (Critical) (Emergency) (Urgent) (Semi-urgent) (Non-urgent) PYNEH 0 5 18 139 168 HKEC RH 0 8 21 106 165 SJH 0 8 15 26 29 HKWC QMH 0 9 24 82 137 KWH 0 8 42 168 166 KCC QEH 0 8 29 140 155 LEGISLATIVE COUNCIL ― 21 April 2021 4981

Average waiting time (minutes) for A&E services Cluster Hospital Triage I Triage II Triage III Triage IV Triage V (Critical) (Emergency) (Urgent) (Semi-urgent) (Non-urgent) TKOH 0 7 23 124 139 KEC UCH 0 10 33 230 277 CMC 0 5 20 70 71 NLTH 0 8 16 48 68 KWC PMH 0 8 18 107 132 YCH 0 5 18 100 132 AHNH 0 8 25 73 73 NTEC NDH 0 7 25 138 185 PWH 0 11 43 156 145 POH 0 6 19 123 141 NTWC TMH 0 5 21 129 137 TSWH(1) 0 4 12 66 72 HA Overall 0 7 25 113 125

Note:

(1) TSWH has commenced A&E services since March 2017 in phases, initially with eight-hour A&E services daily (from 8:00 am to 4:00 pm), then extended to 12-hour daily (from 8:00 am to 8:00 pm) since March 2018. The operating hours have been further extended to 24-hour since November 2018.

(2) and (3)

To ensure that patients can be diagnosed and assessed as early as possible, HA has established triage guidelines, under which an experienced and specially trained nurse will first assess patients' conditions and set priorities for treatment according to the severity. Patients are classified into five categories based on their clinical conditions, namely Triage I (critical), Triage II (emergency), Triage III (urgent), Triage IV (semi-urgent) and Triage V (non-urgent). HA has set performance pledge to ensure that patients who need urgent medical attention are treated within a reasonable time. Patients triaged as critical will be treated immediately by healthcare staff without having to wait, while those with non-urgent conditions may have to wait longer.

According to the HA's triage guidelines, a triage nurse will classify patients into the five categories based on objective (e.g. vital signs of patients) and subjective (e.g. major symptoms reported by patients) 4982 LEGISLATIVE COUNCIL ― 21 April 2021

information as well as findings of targeted assessments (e.g. electrocardiogram, blood glucose or urine test, etc). Triage nurses at A&E departments must be specially trained and experienced in A&E work. The A&E Nursing Development Sub-committee under the HA's Central Coordinating Committee (A&E) will also conduct triage audit at A&E departments of all public hospitals on a regular basis to ensure the quality of triage services.

(4) Healthcare staff of A&E departments will put patients under appropriate monitoring and care in different designated areas of A&E departments according to their triage categories, clinical conditions as well as the stage of medical examination and treatment. In general, the healthcare staff would also arrange patients to rest on stretchers subject to their conditions. They will regularly attend to patients waiting in A&E departments and provide appropriate care based on patients' needs. Family members are encouraged to accompany the patients where possible, and maintain communication with the healthcare staff while waiting in A&E departments to ensure that appropriate assistance could be given to the patients.

(5) A&E departments under HA will deploy manpower having regard to their operational needs, while the deployment arrangements may vary between hospitals depending on various factors such as the sizes, service needs and provision of individual A&E departments. HA is committed to improving the overall quality of A&E services by implementing various measures, including increasing manpower of doctors, nurses, allied health professionals and supporting staff in A&E departments, as well as further augmenting A&E manpower through the provision of special honorarium and leave encashment. HA has also launched the A&E Support Session Programme to recruit additional healthcare staff to assist in handling urgent, semi-urgent and non-urgent cases, with a view to relieving the pressure and workload of the A&E healthcare staff, thus allowing them to focus on the more urgent cases.

The numbers of A&E doctors and nurses in each hospital under HA in 2020-2021 (as at February 2021) are set out below:

LEGISLATIVE COUNCIL ― 21 April 2021 4983

Doctors Number of A&E doctors Hospital on a full-time equivalent basis in 2020-2021 (as at February 2021) PYNEH 38 RH 19 SJH 6 QMH 32 KWH 30 QEH 48 TKOH 27 UCH 47 CMC 29 NLTH 31 PMH 35 YCH 33 AHNH 23 NDH 21 PWH 33 POH 24 TMH 43 TSWH 26 HA Overall 545

Notes:

(1) The manpower figures are calculated on a full-time equivalent basis including permanent, contract and temporary staff in HA. Individual figures may not add up to the total due to rounding.

(2) Doctors exclude Interns and Dental Officers.

(3) The A&E department of TSWH has commenced services in phases since March 2017.

Nurses Number of A&E nurses Hospital on a full-time equivalent basis in 2020-2021 (as at February 2021) PYNEH 102 RH 43 QMH 54 4984 LEGISLATIVE COUNCIL ― 21 April 2021

Number of A&E nurses Hospital on a full-time equivalent basis in 2020-2021 (as at February 2021) KWH 56 QEH 131 TKOH 65 UCH 103 CMC 68 NLTH 85 PMH 64 YCH 55 AHNH 59 NDH 76 PWH 101 POH 74 TMH 106 TSWH 73 HA Overall 1 315#

Notes:

(1) The manpower figures are calculated on a full-time equivalent basis including permanent, contract and temporary staff in the HA. Individual figures may not add up to the total due to rounding.

(2) The A&E department of TSWH has commenced services in phases since March 2017.

(3) Nursing manpower in SJH is calculated on hospital basis.

# Including a Nurse Consultant employed by the HKEC Office.

Abbreviations:

Cluster HKEC―Hong Kong East Cluster HKWC―Hong Kong West Cluster KCC―Kowloon Central Cluster KEC―Kowloon East Cluster KWC―Kowloon West Cluster NTEC―New Territories East Cluster NTWC―New Territories West Cluster

LEGISLATIVE COUNCIL ― 21 April 2021 4985

Hospital AHNH―Alice Ho Miu Ling Nethersole Hospital CMC―Caritas Medical Centre KWH―Kwong Wah Hospital NDH―North District Hospital NLTH― North Lantau Hospital PMH―Princess Margaret Hospital POH―Pok Oi Hospital PWH―Prince of Wales Hospital PYNEH―Pamela Youde Nethersole Eastern Hospital QEH―Queen Elizabeth Hospital QMH―Queen Mary Hospital RH―Ruttonjee Hospital SJH―St. John Hospital TKOH―Tseung Kwan O Hospital TMH―Tuen Mun Hospital TSWH―Tin Shui Wai Hospital UCH―United Christian Hospital YCH―Yan Chai Hospital

Projects receiving the funding support of the Innovation and Technology Fund

12. MR CHUNG KWOK-PAN (in Chinese): President, the Hong Kong Research Institute of Textile and Apparel announced in December last year that it had launched with a non-profit-making organization, H&M Foundation, a five-year collaboration plan, which involved a study on superabsorbent polymer, and the relevant testing would be conducted by a garment manufacturer in India. The collaboration plan has received the funding support of the Innovation and Technology Fund ("ITF"). In this connection, will the Government inform this Council:

(1) whether it knows the details of the aforesaid study, and the amount of public funding involved;

(2) whether it has assessed the benefits of the study in terms of promoting the sustainable development of Hong Kong industries (especially the textile and fashion industries);

4986 LEGISLATIVE COUNCIL ― 21 April 2021

(3) whether the Government, when vetting and approving the funding application concerned, required that the testing relating to the study be conducted by local enterprises or enterprises in the Mainland cities of the Guangdong-Hong Kong-Macao Greater Bay Area ("Greater Bay Area"), so as to promote re-industrialization in Hong Kong and seize the opportunities brought by the development of the Greater Bay Area; and

(4) whether it will stipulate that all research and development work for projects receiving the funding support of ITF must be conducted locally or in the Mainland cities of the Greater Bay Area?

SECRETARY FOR INNOVATION AND TECHNOLOGY (in Chinese): President, the Innovation and Technology Fund ("ITF") administered by the Innovation and Technology Commission ("ITC") has been financing projects that contribute to the innovation and technology upgrading in the manufacturing industry and the services industry. Currently, there are 17 funding schemes under ITF, among which the platform projects under the Innovation and Technology Support Programme ("ITSP") supports applied research and development ("R&D") projects undertaken by the local public research institutes and universities, with a view to transferring the R&D results to local industries. At least 10% of the total project cost is required to be sponsored by the industry. The intellectual property ("IP") rights of the R&D results are owned by the applicants.

In recent years, the Hong Kong Research Institute of Textiles and Apparel ("HKRITA") has been actively developing textile recycling and high-performance textile technologies as well as exploring the ways to mitigate the impacts of textile production and apparel manufacturing on the environment. HKRITA has been conducting platform R&D projects with industry sponsorship in recent years, including research on the ways to recycle textile waste; and in 2018, development of the technologies to turn textile waste into Cellulosic Superabsorbent Polymer ("SAP"). SAP is an ideal agricultural water retention agent for maintaining a high soil humidity even in arid condition. It has great potential for increasing the yield of natural textile materials, thereby helping promote sustainable development.

LEGISLATIVE COUNCIL ― 21 April 2021 4987

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

(1) to (3)

The "Development of a Pilot Scale System for the Production of (Fertilizer containing) Cellulosic SAP" is a platform R&D project. Approved in 2020, the two-year project aims to develop a system for the mass production of SAP. The applicant is HKRITA. Two local companies and one non-local company provide industry sponsorship, and H&M Foundation, a non-profit making organization, provides technical advice. The project cost amounts to about $5.18 million, comprising of about $4.12 million funding from ITF and about $1.06 million from industry sponsorship. The industry sponsorship represents over 20% of the project cost, which is above the required level of 10%. As mentioned above, the IP rights of the technologies developed under this project is vested with HKRITA.

Majority of the R&D work of the project would be conducted in Hong Kong, mainly in HKRITA's laboratories in the Hong Kong Science Park. The project also includes a small scale plantation experiment in Hong Kong. While part of the experiment needs to be conducted in south-western India to facilitate the conduct of irrigation experiment in places with relatively extreme climatic conditions (such as arid regions) to grow fine natural textile materials. The experiment concerned was conducted with the assistance of the non-local sponsor at no cost.

HKRITA will, through licensing of patents, let the Hong Kong industries adopt the new technology. If the relevant material is successfully developed under the project, it could recycle textile products and mitigate the harmful effect of textile waste on the environment, as well as help maintain humidity in the soil and reduce water consumption during irrigation on the other, which will bring positive impact to the sustainable development of the whole textile industry.

4988 LEGISLATIVE COUNCIL ― 21 April 2021

In fact, HKRITA has established strong collaborations with local and Mainland (especially the Greater Bay Area) enterprises. The sponsors and supporting parties of many projects are local or Mainland enterprises.

(4) In general, the majority of R&D work under an approved ITSP project should be conducted within the territory of Hong Kong. However, given the close ties between Hong Kong and the Mainland, up to 50% of R&D work of projects under ITF can be conducted (and relevant expenditure incurred) in the Mainland. Where certain R&D tasks need to be conducted outside Hong Kong (other than the Mainland), prior approval from ITC must be sought.

Proper carriage of loads on vehicles

13. MR WILSON OR (in Chinese): President, under regulation 57 of the Road Traffic (Traffic Control) Regulations (Cap. 374G), the driver of a motor vehicle on a road shall ensure that any load is properly secured to and contained on or inside the vehicle. However, it has been reported that from time to time, there have been instances in which loose loads (e.g. sand, ballast and miscellaneous objects) not properly covered with a cover fell from dump trucks and grab-mounted trucks onto roads, thus endangering the safety of other road users. In addition, some persons-in-charge of works, in order to save cost, have used dump trucks instead of tanker trucks of an enclosed design for carrying mud, resulting in mud spilling onto roads. There are also instances of foul water seeping from refuse collection vehicles while travelling, causing pollution to the environment. In this connection, will the Government inform this Council:

(1) of the number of complaints or reports about the presence of miscellaneous objects on roads received by the Government in each of the past three years, with a breakdown by District Council district;

(2) of the Government's current procedure for clearing miscellaneous objects on roads, and the average expense of each operation;

(3) of the number of prosecutions instituted by the Government in each of the past three years against drivers by invoking the aforesaid provision;

LEGISLATIVE COUNCIL ― 21 April 2021 4989

(4) of the publicity efforts made by the Government in the past three years on promoting the practice of proper carriage of loads to members of the transport sector and other stakeholders, so as to reduce instances of miscellaneous objects and contaminants falling from vehicles onto roads; and

(5) whether it will step up law enforcement actions against the aforesaid unlawful acts and raise the relevant penalties, so as to enhance road safety?

SECRETARY FOR TRANSPORT AND HOUSING (in Chinese): President, the Government all along attaches great importance to road safety, as well as the road safety and environmental pollution problems caused by moving vehicles with loads that are not properly contained or secured.

Having consulted the Hong Kong Police Force ("the Police"), the Highways Department ("HyD"), the Food and Environmental Hygiene Department ("FEHD"), the Environmental Protection Department ("EPD") and the Transport Department ("TD"), my reply to the various parts of Mr Wilson OR's question is as follows:

(1) and (2)

According to the established mechanism, apart from arranging its contractor to clear debris and rubbish from road surfaces of high speed roads on a daily basis, HyD also carries out regular road maintenance inspections for high speed roads and general roads. If HyD discovers or receives reports about any obstacles on these roads affecting the safety of road users, staff will be deployed to carry out the clearance work as soon as possible.

Separately, FEHD is responsible for providing general street cleansing services, including street sweeping, refuse collection and street washing. If discarded waste is found, FEHD will arrange to remove the waste, with assistance from the Police or other departments depending on the circumstances so as to ensure that its staff (including those of its contractors) carry out the work under a safe environment.

4990 LEGISLATIVE COUNCIL ― 21 April 2021

The above mentioned scavenging services are undertaken as part of various departments' normal duties and the expenditure involved has been included in the associated recurrent expenses. Furthermore, the departments do not maintain records on the number of public reports or complaints related to the presence of miscellaneous objects on carriageways.

(3) Under the Road Traffic (Traffic Control) Regulations (Cap. 374G), the driver shall ensure that any load is properly secured to or contained inside the vehicle and that its weight and manner in which it is placed in the vehicle shall not cause danger to any person. Any driver who contravenes the relevant regulation is liable to a fine of $5,000 and imprisonment for three months on first conviction; and to a fine of $10,000 and imprisonment for six months on second or subsequent convictions. The Police is responsible for law enforcement on related contraventions. In 2018, 2019 and 2020, the number of enforcement actions taken by the Police against insecure loading under section 57 of Cap. 374G were 1 321, 962 and 962 respectively. The Police does not maintain relevant prosecution figures.

(4) and (5)

Apart from the above mentioned Cap. 374G, in accordance with the Public Cleansing and Prevention of Nuisances Regulation (Cap. 132BK), FEHD may take enforcement actions against vehicles that cause littering (including dripping of waste water from vehicles) on any street or public place.

In addition, under the Waste Disposal (Designated Waste Disposal Facility) Regulation (Cap. 354L), a refuse collection vehicle with rear compactor entering/leaving landfills or refuse transfer stations must be equipped with a metal tailgate cover and a waste water sump tank of suitable construction and in good working condition so as to prevent the spilling of refuse and waste water during transportation. Also, under the Air Pollution Control (Construction Dust) Regulation (Cap. 311R), when a vehicle leaves a construction site, the load of dusty materials shall be covered entirely by clean impervious sheeting to ensure that the dusty materials would not leak and pollute the environment while moving.

LEGISLATIVE COUNCIL ― 21 April 2021 4991

Apart from governing the use of vehicles for carriage of loads under the law and stepping up enforcement actions, the Government attaches great importance to raising awareness of safe driving and environmental protection among the transport and waste collection trades, and drivers of refuse collection vehicles and dump trucks. In particular, when transporting construction waste, sand, soil and refuse, all loads shall be properly secured and covered, and appropriate measures shall be taken to prevent dripping of wastewater, posing safety hazards to other road users and contaminating the roads. In this respect, TD has been launching publicity and educational activities through various channels. To enhance the goods vehicle trade's awareness of safe loading, TD has compiled a "Code of Practice for the Loading of Vehicles" in accordance with section 109 of the Road Traffic Ordinance (Cap. 374) after consulting the goods vehicle trade. The Code provides guidelines covering various areas of safe loading, including the use of suitable vehicles for carrying loads, proper methods of placing loads inside vehicles, etc. TD also issues the "Goods Vehicle Trade Newsletter" on a quarterly basis and holds regular meetings with the goods vehicle trade to disseminate the message of road safety and remind them to adopt good practice for transportation of loads. In addition, through conducting regular Landfill Users Liaison Meetings, EPD has also appealed the transport trade to keep adopting good practices and complying with the relevant statutory requirements so as to prevent potential environmental hygiene and road safety problems caused by vehicles transporting waste.

The Government will continue to promote safe loading on various fronts, including law enforcement, publicity and education. The Government will also timely review the relevant legislations to ensure that their penalty levels have adequate deterrent effect, with a view to reducing road safety and environmental pollution problems caused by moving vehicles with loads that are not properly contained or secured.

4992 LEGISLATIVE COUNCIL ― 21 April 2021

Development of data centres

14. MR FRANKIE YICK (in Chinese): President, in 2012, the Hong Kong Science and Technology Parks Corporation ("the Corporation"), which is wholly owned by the Government, introduced concessionary measures to facilitate the development of data centres. Such measures include the granting of dedicated sites in the Industrial Estates ("IEs") under the Corporation at premiums below the market value for setting up data centres. Some members of the industry have pointed out that as the development of data centre services has become increasingly matured in recent years, this concessionary measure should be cancelled. In this connection, will the Government inform this Council:

(1) whether it knows the number of data centres in Hong Kong and the annual growth rate of such number, in each of the past five years; of (i) the number of sites granted by the Lands Department ("LandsD") for constructing data centres and the average land premiums per square foot, as well as (ii) the number of temporary waivers granted by LandsD for converting industrial buildings into data centres and the total amount of waiver fees exempted, in the past five years;

(2) whether it has assessed if the concessionary measure of granting dedicated sites in IEs has resulted in an unfair competition in the data centre industry; if it has assessed, of the details and whether it can provide this Council with the assessment report; how the Government ensures the healthy and sustainable development of the industry;

(3) of the considerations and criteria based on which the Corporation vets and approves applications for dedicated sites for data centres, and whether details of each approved application will be made public in order to enhance transparency; if so, of the details; if not, the reasons for that;

(4) as the current IE policy has stipulated that most enterprises set up in IEs are only allowed to lease the specialized multi-storey industrial buildings built by the Corporation and only under exceptional circumstances will sites be granted to single users to build their own factories, what the relevant "exceptional circumstances" are;

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(5) as it has been reported that some grantees, instead of using the dedicated sites for operating their own data centres, have leased the premises concerned to various data centre operators to earn rents at the market value, whether the Corporation has devised new measures to eradicate such an act of profiteering by misusing public resources; and

(6) given that early last year, the Government commenced a review on data centre development in Hong Kong and the relevant concessionary measures, of the progress and preliminary conclusion of the review; when the review outcome will be published?

SECRETARY FOR INNOVATION AND TECHNOLOGY (in Chinese): President, in consultation with the Lands Department ("LandsD"), our reply to the various parts of the question is as follows:

(1) The setting up or operation of data centre in Hong Kong does not require application to or registration with the Government. We do not have the actual number of data centres in Hong Kong. According to relevant market research, the gross floor area of data centres in Hong Kong has increased from about 465 000 sq m in 2015 to about 743 000 sq m in 2019, representing an average annual growth rate of around 10%.

Over the past five years, the Government has approved a site in Tseung Kwan O designated for high-tier data centre use for $5.456 billion through open tender. The tender result has been published on LandsD's website.

With regard to the conversion of existing industrial buildings for data centre use, according to prevailing concessionary measures, the Government will waive the standard waiver fees currently chargeable to applications for conversion of existing industrial buildings to information technology and telecommunications industries use (which include data centres). Over the past five years, LandsD has issued a total of 22 waivers under this category.

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Under general circumstances, the amount of waiver fee payable for the approved applications will depend on the floor area, location, and the proposed use of the premises in question. As the waiver fees for the above uses were already exempted by the Government in accordance with the said initiatives, the Government has not assessed the waiver fees for the above applications.

(2) to (5)

The Hong Kong Science and Technology Parks Corporation ("HKSTPC") manages and operates the three Industrial Estates ("IEs") in Tai Po, Yuen Long and Tseung Kwan O. The pre-2015 arrangement was to grant IE sites to those interested and eligible enterprises to build their industrial production facilities. The relevant arrangement was applicable to all industries, including the site granted by HKSTPC in 2012 for the development of a data centre. HKSTPC does not have preferential measures specifically for data centres.

In 2015, HKSTPC revised its IE policy under which HKSTPC would, in general, provide specialized multi-storey and highly-efficient industrial buildings for leasing to multiple users, with a view to encouraging manufacturers to set up their production bases in Hong Kong and attracting high value-added technology industries and manufacturing processes suitable for Hong Kong. However, HKSTPC will still consider granting sites to single users under exceptional circumstances such as the industry's need for purpose-built factory, the industry's significant contribution to Hong Kong's economic development, etc. However, open tendering would be adopted for invitation of tenders in general.

All along, grantees for admission to IEs have been selected by HKSTPC under a rigorous and objective assessment mechanism. Enterprises (including data centres) admitted to IEs are required to go through HKSTPC's assessment. The prevailing assessment criteria cover the societal and economic benefits brought to Hong Kong by the proposed projects, investment in factory, whether it can create quality jobs, level of product technology, whether or not advanced processes have been introduced, research and development LEGISLATIVE COUNCIL ― 21 April 2021 4995

element, sustainability, etc. All applicants are required to submit the relevant investment details, business models and estimated schedule of development to facilitate the assessment of their applications. The above assessment criteria are applicable to different industries including data centres. As the assessment involves commercially sensitive information, HKSTPC would not announce details of each of the approved applications.

Upon the grant of sites, all grantees in IEs are required to sign with HKSTPC a lease agreement that stipulates the rights and responsibilities of both parties including, for instance, only operations approved by HKSTPC can be carried out at the premises, the required investment in the facilities or machinery of the factories, alienation restriction, prohibition against subletting, terms of surrender and HKSTPC's rights of factory inspection.

In view of the unique operation model of data centres, HKSTPC has requested those grantees to provide a proforma service agreement specifying the service level and scope that they provide for their clients, access arrangements to the data centres for security and clients, etc. The proforma service agreement is subject to the approval of HKSTPC to ensure that no subletting of the premises to data centre clients is involved. HKSTPC has all along undertaken vigorous lease enforcement actions and conducts regular site inspections of the premises. If a grantee is found to be in breach of the terms and conditions of the lease agreement, HKSTPC will take appropriate actions.

In sum, HKSTPC will review its IE development strategy from time to time in the light of technological advancement and market conditions.

(6) Data centre is an essential information and communications technology ("ICT") infrastructure that supports the continuous growth of Hong Kong's digital economy. The Government has been committed to promoting data centre development in Hong Kong by implementing various facilitation measures, including the provision of land, encouraging conversion of industrial buildings and use of industry lots, as well as providing one-stop support services. 4996 LEGISLATIVE COUNCIL ― 21 April 2021

In early 2020, the Government engaged a consultant to conduct a review on data centre development in Hong Kong, including the concessionary measures implemented by the Government and feedback from the industry. The initial findings of the review were submitted to the Legislative Council Panel on Information Technology and Broadcasting in May 2020, and the review was completed in early 2021. The findings of the review show that the demand for data centre facilities and services in Hong Kong will continue to be driven by global and local technology advancement. The market demand for data centres in Hong Kong is very positive. A considerable number of local and non-local ICT enterprises, including international technology giants, Internet, cloud service and data centre providers will continue to expand their presence in Hong Kong. Industry players generally consider that the concessionary measures are effective in facilitating data centre development, particularly high-tier data centres. They also support the continuous implementation of the concessionary measures by the Government to facilitate data centre development.

The summary of the review report will be uploaded onto the thematic portal after consolidation for reference by the industry and the public.

Installation of village lights in the rural areas

15. MR LEUNG CHE-CHEUNG (in Chinese): President, some residents in the rural areas of Yuen Long have relayed that a road section near their residences, which is about 1 kilometre long and used by both pedestrians and vehicles, was opened five years ago, but has not yet been installed with village lights so far. As the road section is extremely dark at night, accidents of vehicles bumping into objects on the roadsides have occurred from time to time, the rescue work of ambulances has been affected, and residents walking on the road section have their hearts in their mouths as they are worried about stepping on snakes. They have applied for the installation of village lights, but the District Office in the district has advised that their application needs to wait for at least six years before it will be processed. Regarding the installation of village lights, will the Government inform this Council:

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(1) of (i) the number of applications for the installation of village lights received, (ii) the number of applications in respect of which the installation works of village lights had yet to be completed, (iii) the quota on village lights to be installed, and (iv) the number of village lights installed and the number of applications involved, in each of the past four years, with a breakdown by District Council district;

(2) of the total number of unlit road sections of 500 metres or above in length which were involved in the applications for the installation of village lights currently on the waiting list;

(3) whether it will, when planning new rural roads, ensure that the installation of village lights will be completed in tandem with the construction of roads; if not, of the reasons for that; and

(4) whether it will expedite the installation of village lights, so as to clear the backlog of applications expeditiously; if not, of the reasons for that?

SECRETARY FOR TRANSPORT AND HOUSING (in Chinese): President, under the current practice, the Highways Department ("HyD") will determine an overall quota on a territory wide basis for the Village Lighting Programme ("VLP") based on its resources every year, and carry out works to install new village lights for rural roads in need or to relocate existing village lights to cater for the needs of land development. Applications for installation of village lights from various districts are received, coordinated and prioritized mainly based on the date of application by the Home Affairs Department ("HAD") and various District Offices ("DOs"). They will then be incorporated into VLP for implementation by HyD. HAD will allocate quota to districts in proportion to the total number of applications received from each district.

Before the commencement of the village light installation works, HyD and HAD will carry out a series of preparation and follow-up work, including arranging site meetings with village representatives, applicants and relevant departments. If the application involves private land, consent from the land owner would need to be obtained.

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Having consulted HAD and HyD, my reply to the various parts of Mr LEUNG Che-cheung's question is as follows:

(1) Based on the information provided by HAD, the number of applications for the installation of village lights received and the quota on village lights to be installed in various districts in the New Territories from financial year 2017-2018 to 2020-2021 are set out at Annex 1.

Based on the information provided by HyD, the number of village lights installed and the number of village lights being installed/under planning in various districts in the New Territories from financial year 2017-2018 to 2020-2021 are set out at Annex 2.

(2) In the course of processing applications for the installation of village lights, the relevant departments will invite the applicant and village representatives concerned to meet at the site under application for installation of village lights so as to jointly draw up the number and the specific location of village lights to be installed. The Government does not maintain the relevant information requested.

(3) Generally speaking, in implementing any new road works, the works departments will design and install road lights in accordance with the Public Lighting Design Manual published by HyD. The aim is to ensure sufficient public lighting facilities upon the commissioning of the road section concerned.

(4) In the course of processing applications for the installation of village lights, HyD needs to discuss the location of installation or the routing of cables with the applicants. It may take a longer time to handle cases where the proposed village light or associated cables is located within private land, there is a need to handle objections, or stakeholders such as the applicant and village representatives cannot reach a consensus on the location of the village light or associated cables.

In recent years, HyD, HAD and DOs have allocated additional resources and adopted measures to expedite the handling of applications for installation of village lights. For the village LEGISLATIVE COUNCIL ― 21 April 2021 4999

lighting applications already incorporated into VLP, HAD and HyD will regularly review the applications and consider whether to remove the cases that remain unresolved for a long time due to various reasons, such as lighting location subject to objections or site constraints, to spare resources for processing the remaining applications. Under the current practice, DOs will inform the applicants of the removal of their applications. HAD and HyD also hold regular meetings to review the progress of follow-up actions and examine individual special cases.

Moreover, subject to availability of resources, HyD and DOs will initiate preliminary work such as site inspection and identification of location for applications yet to be incorporated into VLP , so as to commence the installation works as soon as possible once these applications are formally incorporated into VLP.

Annex 1

Number of village lighting applications received by DOs and quota assigned in various districts in the last four years (financial year 2017-2018 to 2020-2021)*

Number of applications received Assigned village light quota District (Number of village lights) (Number of village lights) Islands 161 127 Kwai Tsing 26 20 North 388 377 Sai Kung 108 152 Sha Tin 117 47 Tai Po 241 267 Tsuen Wan 53 34 Tuen Mun 182 115 Yuen Long 666 640 Total 1 942 1 779

Note:

* As at end March 2021

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Annex 2

Number of village lighting applications processed by HyD in the last four years (financial year 2017-2018 to 2020-2021)*

Number of village Number of village lights being processed District lights installed Being installed Under planning Islands 91 7 80 Kwai Tsing 13 0 10 North 356 12 229 Sai Kung 127 8 85 Sha Tin 58 12 16 Tai Po 148 21 196 Tsuen Wan 25 2 8 Tuen Mun 83 2 54 Yuen Long 605 36 316 Total 1 506 100 994

Note:

* As at end March 2021. As the processing of village lighting application may not be completed within that year, the number of applications processed by HyD every year does not correspond to the quota assigned for the same year.

Vaccination for children

16. DR PIERRE CHAN (in Chinese): President, under the Hong Kong Childhood Immunization Programme ("HKCIP"), children receive various vaccines in the following three stages: (i) newly born (administered by hospitals), (ii) one to 18 months from birth (administered by the Maternal and Child Health Centres ("MCHCs") under the Department of Health ("DH")), and (iii) Primary One to Primary Six (administered by the School Immunization Teams under the Centre for Health Protection of DH). Moreover, children aged between six months and below 12 years are eligible for free and subsidized seasonal influenza vaccination ("SIV") under the Government Vaccination Programme ("GVP") and Vaccination Subsidy Scheme ("VSS") respectively. In this connection, will the Government inform this Council:

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(1) of the following details of HKCIP last year: the respective numbers of doses of vaccines administered to (i) newborn babies by public/private hospitals, (ii) pre-school children by MCHCs, and (iii) primary school students by DH's School Immunization Teams at schools, with a tabulated breakdown by the infectious disease involved; how such figures compare with the relevant figures of the preceding two years;

(2) of the respective vaccination coverage rates among (i) pre-school children and (ii) primary school students last year; how such figures compare with the relevant figures of the preceding two years;

(3) of the numbers of doses of vaccines (i) procured for HKCIP, (ii) discarded due to expiry or damage, and (iii) kept in stock, last year by DH and the Hospital Authority respectively; how such figures compare with the relevant figures of the preceding two years;

(4) of the amount of expenditure incurred by the Government for procuring vaccines under HKCIP in each of the past three years;

(5) of the respective numbers of primary schools and primary school students participating in the outreach SIV activities at schools in each of the past two years; how such figures compare with the relevant figures of the preceding year; the respective numbers of children for whom free SIV was administered under GVP, VSS and the Residential Care Home Vaccination Programme in each of the past three years; and

(6) whether it knows the up-to-date number of children who have not turned up for their scheduled appointments to receive various vaccines since the outbreak of the Coronavirus Disease 2019 in Hong Kong early last year; whether DH has taken follow-up actions; if so, of the details; if not, the reasons for that?

SECRETARY FOR FOOD AND HEALTH (in Chinese): President, the Centre for Health Protection ("CHP") of the Department of Health ("DH") has been keeping abreast of the latest position of the World Health Organization on immunization and vaccination, the scientific evidence of new vaccines, the latest global and local epidemiology of vaccine preventable diseases, and the advice and practical experience of health authorities across the world. The Scientific 5002 LEGISLATIVE COUNCIL ― 21 April 2021

Committee on Vaccine Preventable Diseases under CHP holds regular meetings and gives science-based advice and recommendations to CHP regarding the types of vaccines to be incorporated into the Hong Kong Childhood Immunisation Programme ("HKCIP") from the public health perspective in a timely manner. Under HKCIP, Bacillus Calmette-Guerin ("BCG") vaccine and the first dose of hepatitis B ("Hep B") vaccine are first given to newborn babies in hospitals. Pre-school children from birth to five years old receive different types of vaccines and boosters at recommended ages of vaccination at DH's Maternal and Child Health Centres ("MCHCs"). As for primary school children, vaccination is provided at schools by the DH's outreach School Immunisation Teams ("SIT"). Apart from DH's free vaccination, parents may also arrange their children to receive vaccination in private healthcare facilities or clinics at their own expense. In consultation with DH and the Hospital Authority ("HA"), consolidated reply to the various parts of the question is as follows:

(1) The numbers of doses of various vaccines administered at public and private hospitals, MCHCs and by SIT in the past three years are at Annexes 1, 2 and 3 respectively.

(2) Starting from 2001, DH has conducted territory-wide immunization coverage surveys on a regular basis to monitor the immunization coverage rates of pre-school children in Hong Kong (i.e. the percentage of children having received vaccination at recommended ages under HKCIP) through checking the immunization records (or vaccination cards) of a sample of children. According to the survey results, the overall immunization coverage rates of various vaccines under HKCIP has been maintained at a very high level of over 95% (details at Annex 4).

In addition, primary school students' immunization records are also checked by SIT when it provides vaccination at schools every year. The figures show that the overall immunization coverage rates of Primary One, Primary Five and Primary Six students have maintained at a high coverage rate (details at Annex 5).

(3) and (4)

Before ordering vaccines for HKCIP, the Government will estimate the required quantity on the basis of the number of births for the year and the coverage rates in the past. The Government will then procure the estimated quantity of vaccines through tender in LEGISLATIVE COUNCIL ― 21 April 2021 5003

accordance with the established requirements and procedures. A flexibility clause will normally be included in the conditions of the tender to ensure that after the signing of the contract, the quantities ordered can be appropriately adjusted or the contract period can be extended if necessary, so as to minimize the number of vaccines to be discarded or expired vaccines. Vaccine suppliers are required to supply sufficient quantities of vaccines for HKCIP according to the terms of contract.

At present, the Government procures for HKCIP on a contract basis the following nine single or combined vaccines for children, namely (1) BCG vaccine; (2) Hep B vaccine; (3) varicella vaccine; (4) diphtheria, tetanus, acellular pertussis and inactivated poliovirus ("DTaP-IPV") vaccine; (5) diphtheria, tetanus, acellular pertussis (reduced dose) and inactivated poliovirus ("dTap-IPV") vaccine; (6) 13-valent pneumococcal conjugate ("PCV13") vaccine; (7) measles, mumps and rubella ("MMR") vaccine; (8) measles, mumps, rubella and varicella ("MMRV") vaccine and (9) human papillomavirus ("HPV") vaccine. As HKCIP is an ongoing programme, contracts are signed for different vaccines and the contract periods vary accordingly. Suppliers are normally required under the contracts concerned to provide vaccines for a period of two to three years and the cost for procurement of the vaccines depends on the relevant contract price for the vaccines. Details of the contracts signed with vaccine suppliers that are still valid are at Annex 6.

(5) The number of primary schools joining seasonal influenza vaccination school outreach ("SIVSO") activities and the number of children aged between 6 months and under 12 who received free or subsidized seasonal influenza vaccination in the past three years are at Annexes 7 and 8.

(6) DH has all along closely monitored the immunization coverage of children. We noticed that since the outbreak of COVID-19 in Hong Kong, some parents have not brought their children to MCHCs for vaccination according to the recommended schedule. Meanwhile, the suspension of face-to-face class has also affected the vaccination for primary students. MCHC staff and SIT would respectively contact parents of pre-school children who have not yet received the 5004 LEGISLATIVE COUNCIL ― 21 April 2021

age-appropriate vaccines and that of Secondary One students who have yet to complete their vaccinations under HKCIP by phone, letter and SMS, to remind them to arrange vaccination as soon as possible. The latter may bring their children to SIT offices or family doctors' clinics for vaccination according to their needs. Since mid-May 2020, upon the resumption of face-to-face class in phases in light of the development of local COVID-19 situation, SIT has liaised with schools and arranged students to receive vaccination at schools or SIT offices with strengthened infection control. DH will continue to follow up these students who have not completed HKCIP and work closely with schools to arrange vaccination for students as early as possible.

We noted that some of the children have already received vaccination in the private healthcare sector, whilst some children living outside Hong Kong have continued vaccination in their place of residence. DH has also conducted a press briefing and issued a press release to encourage parents to maintain up-to-date immunization for their children for comprehensive and timely protection against infectious diseases, and not to delay vaccination due to the COVID-19 outbreak. Parents with children who are currently not residing in Hong Kong are advised to continue immunization in their place of residence.

Annex 1

Number of doses of vaccines administered to newborn babies at hospitals

Year BCG vaccine First dose of Hep B vaccine 2018 53 087 53 506 2019 52 343 52 603 2020 42 556 42 876

Note:

Figures include vaccinations at public and private hospitals.

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Annex 2

Number of doses of vaccines administered at MCHCs

Number of doses of vaccines administered at MCHCs* Year BCG Hep B DTaP-IPV PCV13+ MMR Varicella MMRV^ vaccine# vaccine vaccine vaccine vaccine vaccine vaccine 2018 571 86 218 170 516 198 428 49 625 49 889 - 2019 599 83 164 161 786 170 746 47 501 47 852 - 2020 411 66 278 131 990 119 889 41 285 41 469 39 578

Notes:

* Some children may have received vaccines outside MCHCs and they are not included in the above statistics.

# Most babies receive BCG vaccine at hospitals where they were born (see Annex 1).

+ Children born on or after 1 January 2019 no longer receive PCV13 vaccine at their six-month visit in MCHCs.

^ Children born on or after 1 July 2018 receive MMRV vaccine at 18 months old in MCHC.

Annex 3

Number of doses of vaccines administered by SIT of DH

School year Type of vaccine 2017-2018 2018-2019 2019-2020 Primary One DTaP-IPV vaccine 60 028 60 038 53 631 MMR vaccine* 56 457 52 869 47 015* Primary Five HPV vaccine& (Female - - 22 138 students) Primary Six dTap-IPV vaccine 52 508 56 320 56 386 ^^(Mop-up) MMR vaccine 3 248 3 396 2 104 ^^^(Mop-up) Hep B vaccine 886 504 256^^^

Notes:

* Since 2019-2020 school year, children born between 1 January 2013 and 30 June 2018 receive second dose of MMRV vaccine in Primary One by SIT of DH.

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& Since 2019-2020 school year, HKCIP provides first dose of HPV vaccine for Primary Five female students. The second dose will be given in subsequent school year (Primary Six).

^^ Under HKCIP, primary series of Hep B and MMR vaccines are completed in preschool and Primary One respectively. SIT will check students' vaccination records in Primary Six and provide mop-up vaccination for those who have not completed the primary series.

^^^ Based on previous experience, students requiring mop-up for Hep B vaccine are mainly children born outside Hong Kong and cross-border students. Some did not return to Hong Kong in view of border control measures amid COVID-19 pandemic.

Annex 4

Territory-wide immunization coverage survey (pre-school children)

Year of birth Type of vaccine^ 2010* 2011* 2012@ 2013@ 2014@ BCG vaccine 99.6% 99.5% 100.0% 99.7% 99.8% Completed Hep B vaccine 99.2% 99.2% 99.8% 99.5% 99.7% Completed Polio vaccine# 96.9% 96.9% 98.7% 99.0% 98.6% Completed Diphtheria, Pertussis 98.6% 98.1% 98.9% 99.0% 98.7% and Tetanus vaccine# Completed measles vaccine~ 99.3% 99.0% 99.8% 100.0% 99.6% Completed mumps vaccine~ 99.2% 98.8% 99.6% 100.0% 99.3% Completed rubella vaccine~ 99.2% 99.0% 99.8% 100.0% 99.4% Completed varicella vaccine+ N.A. N.A. N.A. 99.0% 99.4%

Notes:

^ Including vaccines received in private healthcare facilities and outside Hong Kong.

* Based on the survey conducted in 2015 (targeting children born between 2009 and 2012).

@ Based on the survey conducted in 2018 (targeting children born between 2012 and 2014).

# DTaP-IPV vaccine has been used by DH since 2007.

~ MMR vaccine has been used by DH since 1990.

+ Varicella vaccine has been incorporated into HKCIP by DH since 2014 for children born on or after 1 January 2013.

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Annex 5

Vaccination coverage according to students' immunization records

School year Type of vaccine 2017-2018 2018-2019 2019-2020 Primary One Completed DTaP-IPV vaccine 97.6% 98.6% 97.1% Completed MMR vaccine* 98.1% 98.7% 91.4%* Primary Five HPV vaccine& (Female - - 86.0% students) Primary Six Completed dTap-IPV vaccine 97.5% 98.2% 97.5% Completed MMR vaccine 98.1% 98.2% 95.5% Completed Hep B vaccine 98.2% 98.4% 97.5%

Notes:

* Since 2019-2020 school year, children born between 1 January 2013 and 30 June 2018 receive second dose of MMRV vaccine in Primary One under HKCIP.

& Since 2019-2020 school year, HKCIP provides first dose of HPV vaccine for Primary Five female students. The second dose will be given in subsequent school year (Primary Six).

Annex 6

Contracts signed by DH/HA with vaccine suppliers that are still valid (As at 7 April 2021)

Vaccine type Contract holder Contract term Contract amount (doses) 1. BCG vaccine DH 8.10.2018- 37 300 ampoules 7.10.2021 (10 doses per ampoules) 2. Hep B vaccine DH 7.7.2020- 56 800 6.7.2023 HA 1.2.2018- 380 000 30.4.2021 5008 LEGISLATIVE COUNCIL ― 21 April 2021

Vaccine type Contract holder Contract term Contract amount (doses) 3. DTaP-IPV vaccine DH 1.1.2021- 260 700 31.12.2023 HA 14.7.2018- 450 000 13.9.2021 4. dTap-IPV vaccine DH 18.7.2019- 100 000 14.5.2022 (for stockpiling) 5. MMR vaccine DH 1.12.2020- 20 000 30.11.2021 (for stockpiling) HA 10.6.2018- 148 000 9.3.2022 6. Varicella vaccine DH 18.10.2018- 35 000 17.10.2021 HA 16.4.2018- 130 000 15.4.2021 7. PCV13 vaccine DH 8.8.2020- 572 500# 7.8.2023 8. MMRV vaccine DH 18.10.2020- 64 670 17.10.2021 HA 2.12.2019- 126 600 1.12.2022 9. HPV vaccine DH 30.10.2019- 100 000 29.10.2021

Note:

# Also for use in Government Vaccination Programme ("GVP").

Annex 7

Number of primary schools joining SIVSO activities in the past three years

Influenza Season Number of Primary School 2018-2019 405 2019-2020 544 2020-2021 (as at 6 April 2021) 558

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Annex 8

Number of children aged between 6 months and under 12 receiving seasonal influenza vaccination under GVP, the Vaccination Subsidy Scheme ("VSS") and SIVSO (Free of Charge)

Influenza season Vaccination programme 2020-2021 2018-2019 2019-2020 (as at 6 April 2021) GVP 1 000 400 400 VSS 206 900 122 300 100 300 SIVSO& 100 300 278 000 234 700 Total: 308 200 400 700 335 400

Note:

& DH launched the School Outreach Vaccination Pilot Programme ("Pilot Programme") in October 2018 to provide free SIV to eligible primary school students through DH or Public-Private Partnership. Given the effectiveness of the Pilot Programme, DH regularized the Pilot Programme in the 2019-2020 season to cover more primary schools, and extended the coverage to kindergartens and child care centres ("KGs/CCCs") as a pilot programme. DH has also regularized the KGs/CCCs pilot programme in the 2020-2021 season.

COVID-19 Vaccination Programme

17. MR HOLDEN CHOW (in Chinese): President, there have been, from time to time, serious adverse events in which members of the public felt unwell or even died after receiving the Coronavirus Disease 2019 ("COVID-19") vaccines since the COVID-19 Vaccination Programme commenced on 26 February this year. There are views that although the Expert Committee on Clinical Events Assessment Following COVID-19 Immunisation has, after making assessment, considered that there was no causal relationship between such events and the administration of the vaccines, such events have undoubtedly discouraged some members of the public from getting vaccinated. In this connection, will the Government inform this Council:

(1) of the up-to-date number of reports on serious adverse events following COVID-19 vaccination received and, among such reports, the respective numbers on (i) deaths and (ii) other cases; whether it 5010 LEGISLATIVE COUNCIL ― 21 April 2021

knows the causes for the illness or deaths of the persons concerned; if it knows, set out such information in a table;

(2) of the measures put in place to boost public confidence in the safety of the COVID-19 vaccines; whether such measures include disseminating information on the safety of the vaccines through the private doctors and clinics participating in the vaccination programme, so as to allay public concerns; and

(3) whether it has discussed with the Mainland authorities allowing Hong Kong residents who hold COVID-19 electronic vaccination records downloaded via the "iAM Smart" mobile application to enter the Mainland without being subject to quarantine; if so, of the progress of such discussion; if not, the reasons for that?

SECRETARY FOR FOOD AND HEALTH (in Chinese): President, vaccination is the current focus of the global anti-epidemic work. The Government has implemented the COVID-19 Vaccination Programme since 26 February 2021. So far, about 1.12 million doses of COVID-19 vaccines (including 610 000 doses of the Sinovac vaccine and 510 000 doses of the BioNTech vaccine) have been administered to members of the public. Both vaccines meet the criteria of safety, efficacy and quality. The Government will adopt the concept of "vaccine bubble" as announced earlier as the new direction in fighting the epidemic, with an aim to restoring the normal operations of society in a gradual and orderly manner. However, the premise is that the public needs to work together and get vaccinated proactively in order to help Hong Kong beat the epidemic as soon as possible.

In consultation with the Constitutional and Mainland Affairs Bureau, Innovation and Technology Bureau and Information Services Department, my consolidated reply to the various parts of the question raised by Mr Holden CHOW is as follows:

(1) The Sinovac vaccine and BioNTech vaccine authorized by the Government for emergency use in accordance with the Prevention and Control of Disease (Use of Vaccines) Regulation (Cap. 599K) are safe, efficacious and of good quality. The two vaccines have been administered on over tens of millions and even over a hundred LEGISLATIVE COUNCIL ― 21 April 2021 5011 million people around the globe. Their safety and efficacy are beyond doubt.

According to the World Health Organization ("WHO"), Adverse Events Following Immunization ("AEFI") refers to any untoward medical occurrence which follows immunization and does not necessarily have a causal relationship with the usage of the vaccine. All along, the Department of Health ("DH") has been cooperating with local experts to closely monitor the safety of the relevant vaccines, including enhancing the existing surveillance system and carrying out active surveillance with reference to the guidelines of WHO. The purpose is early identification of rare or delayed serious adverse events following large-scale immunization. In addition to encouraging healthcare providers and the pharmaceutical industry to report AEFIs through the enhanced existing surveillance system, DH also partners with the University of Hong Kong to conduct the "COVID-19 Vaccines Adverse Events Response and Evaluation Programme (CARE Programme)" to actively monitor Adverse Events of Special Interest related to COVID-19 vaccines.

As at 4 April, there were about 556 100 doses of COVID-19 vaccines administered in Hong Kong. During the same period, DH received a total of 1 357 AEFI reports (about 0.24% of all doses administered). Among the AEFI reports, there are 754 hospitalization cases reported by the Hospital Authority ("HA"). The symptoms of the cases mainly included chest discomfort, chest pain, dizziness, fever, headache, hypertension, numbness, palpitation, etc. As regards the four cases reported by private hospitals, the symptoms mainly included blurred vision, chest pain, headache and increased blood pressure. Apart from the above mentioned AEFI reports, during the same period, DH also received 584 other AEFI reports with milder conditions which did not require hospitalization, such as dizziness, headache, chest discomfort, rash, palpitation, etc.

The remaining 15 cases are death case reports by HA with history of COVID-19 immunization. Existing information indicates that most of these cases died of cardiovascular diseases. The Expert Committee on Clinical Events Assessment Following COVID-19 5012 LEGISLATIVE COUNCIL ― 21 April 2021

Immunisation ("Expert Committee") has already concluded three of these reports that there was no causal relationship between the deceased's outcome and COVID-19 vaccination. The medical history and preliminary autopsy findings of the remaining cases showed that the outcomes of the deceased persons were not directly associated with COVID-19 vaccination. Their assessment will be concluded by the Expert Committee when necessary further information is available.

According to the mortality data in Hong Kong, during the same period in 2019 (i.e. 26 February to 4 April), among people aged 55 or above, there were 17.2 deaths per 100 000 population due to ischaemic heart diseases and 28.1 deaths per 100 000 population due to heart disease. The Expert Committee has basically concluded that the reported death cases were not related to vaccination. The above figures also indicate that the rate of occurrence of deaths from cardiovascular diseases among all people who have been vaccinated (3.1 deaths per 100 000 population) is in fact lower than that of the general population. Statistically, there is no sign that the relevant death cases are caused by vaccination. The Expert Committee has reviewed these data and considered that so far there is no unusual pattern identified after administration of vaccines. The Expert Committee will continue to closely monitor the situation.

The Government will regularly publish the summary report on safety monitoring of COVID-19 vaccines in Hong Kong on the thematic website for the COVID-19 Vaccination Programme. The latest report is available at .

(2) Since the implementation of the vaccination programme, the Government has disseminated to members of the public information on the benefits of vaccination and correct messages, the views of experts and details of the vaccination programme, etc. via different channels, in adherence to the principles of openness and transparency and based on scientific evidence. Government officials have also explained the progress of the vaccination programme and information on the vaccines at different occasions through the media. We have also set up a thematic website for the LEGISLATIVE COUNCIL ― 21 April 2021 5013

COVID-19 Vaccination Programme to enable members of the public to obtain the latest information and accurate messages through an official channel, including how the vaccines work, their protection and vaccination fact sheets, etc. We have also stepped up monitoring of false information on vaccines within the community and made clarifications as necessary.

On the other hand, DH has issued guidelines(1) to private doctors participating in the vaccination programme and conducted seminars to explain the content of the relevant programme and the arrangements for vaccination, etc. DH has also reminded the private doctors that they should provide to the vaccine recipient the pamphlets with vaccination fact sheets, explain the content of the pamphlets, respond to the recipient's questions, assess whether the recipient's health situation is suitable for vaccination and if there are any contraindications or precautions and handle enquiries, etc.

Furthermore, together with various healthcare professional groups, DH has developed and promulgated the "Interim Guidance Notes On Common Medical Diseases and COVID-19 Vaccination In Primary Care Settings"(2) to provide medical workers with health guidance on handling different target groups and administration of vaccines. DH has also invited doctors to assist in the production of short clips and messages for dissemination on social media and other media platforms, with a view to enhancing the vaccination rate of COVID-19 vaccines. Details can be found under the section "Education & Media Resources" of the thematic website for the COVID-19 Vaccination Programme.

(3) Since the implementation of the COVID-19 Vaccination Programme, members of the public will be provided with a hard copy of vaccination records after vaccination. They can also download their electronic vaccination records using the "iAM Smart" mobile app. Both paper and electronic vaccination record bear a verifiable QR code which adopts digital signing technology to ensure

(1) https://www.covidvaccine.gov.hk/pdf/VSS_DoctorsGuide.pdf

(2) 5014 LEGISLATIVE COUNCIL ― 21 April 2021

that the data it contains is tamper-proof. Related technology also supports the verification and collection of vaccination records through scanning of the QR codes. To facilitate the gradual resumption of cross-boundary people flow between the two places, we have already commenced technical discussion on the interfacing of vaccination records and technology platform with the Guangdong Provincial Government to enhance the interconnectivity of relevant digital records and technology platform.

On the other hand, the Hong Kong Special Administrative Region ("HKSAR") Government has been communicating and liaising closely with the relevant authorities in the Mainland and Macao Special Administrative Region ("SAR") Government on disease prevention and control measures, as well as on arrangements for cross-boundary travel for residents of the three places. We are actively exploring the resumption of normal cross-boundary activities amongst residents of the three places in a gradual and orderly manner when the epidemic situation in the three places is under control and without increasing public health risks.

As a first step to gradually resume the cross-boundary flow of people amongst Hong Kong, Guangdong and Macao in an orderly manner, the HKSAR Government introduced the Return2hk Scheme on 23 November 2020 to facilitate Hong Kong residents who are currently in Guangdong Province or Macao to return to Hong Kong. The Scheme has been operating smoothly. As at 18 April 2021, more than 130 000 return journeys have been made by Hong Kong residents upon fulfilment of specified conditions under the Scheme without being subject to compulsory quarantine. The HKSAR Government is planning to extend the scope of the Return2hk Scheme for Hong Kong residents returning to Hong Kong from other places in the Mainland by the end of April. Meanwhile, we are planning to launch the Come2hk Scheme in mid-May for non-Hong Kong residents in Guangdong and Macao to enter Hong Kong without being subject to compulsory quarantine, upon fulfilment of specified conditions under the Scheme.

LEGISLATIVE COUNCIL ― 21 April 2021 5015

The HKSAR Government will maintain close communication with the relevant authorities in the Mainland and Macao SAR Government to discuss the resumption of cross-boundary people flow amongst the three places in a gradual and orderly manner having regard to the latest epidemic situation.

MTR Kwun Tong Line and Tseung Kwan O Line

18. MR LUK CHUNG-HUNG (in Chinese): President, some members of the public have relayed that the loadings of MTR Kwun Tong Line ("KTL") and Tseung Kwan O Line ("TKOL") during morning and evening peak hours have reached saturation. Also, with a number of developments along KTL being completed one after another, the train compartments of KTL as well as the station concourse and train platforms of Kwun Tong ("KT") Station during peak hours are increasingly crowded. In this connection, will the Government inform this Council:

(1) whether it knows, in respect of the critical links of (a) KTL and (b) TKOL, the average hourly carrying capacities and actual patronages, as well as the loadings calculated respectively on the bases of six persons and four persons (standing) per square metre, during morning and evening peak hours (i) in each of the past four years and (ii) from January to March this year;

(2) whether it knows the respective hourly passenger flows during morning and evening peak hours at the (a) entrances/exits and (b) train platforms of KT Station (i) in each of the past four years and (ii) from January to March this year;

(3) whether it has assessed if, in the coming five years, the carrying capacity of KTL can cope with the transport needs arising from the increased population along the railway line; if it has, of the assessment outcome; if not, whether it will conduct such an assessment immediately and publish the relevant data;

(4) given that the Government has proposed to construct an elevated landscaped deck of about 120 metres in length to link up KT Station with adjacent new developments, of the projected (i) increase in 5016 LEGISLATIVE COUNCIL ― 21 April 2021

passenger flows that the station concourse and train platforms of KT Station can accommodate as compared with the current levels, and (ii) extent to which the crowdedness of the train platforms of the Station will be alleviated as compared with the current situation, upon the completion and commissioning of the deck; whether the Government will consider extending the existing train platform of KT Station; and

(5) whether it knows the anticipated increase in the train frequencies and carrying capacities of KTL and TKOL upon the service commencement of the new signalling systems of the two railway lines in 2026-2027; the measures put in place by the MTR Corporation Limited to increase the carrying capacity of KTL before the service commencement of the new signalling system?

SECRETARY FOR TRANSPORT AND HOUSING (in Chinese): President, having consulted the MTR Corporation Limited ("MTRCL") and relevant bureau and department, my reply to Mr LUK Chung-hung's question is as follows:

(1) and (2)

In general, the highest passenger loading of a railway line occurs during the morning peak hours when more passengers travel around the same time. The travelling pattern of passengers in the evening peak hours is relatively more dispersed, hence the peak loading is usually lower in the evening peak hours than that in the morning peaks. As such, when evaluating the service demand for individual railway lines, MTRCL will assess the most crowded scenario for the railway line concerned mainly on the basis of the passenger loading during the morning peak hours.

The carrying capacity and loading during the busiest hour in the morning per direction for critical links on the Kwun Tong Line and Tseung Kwan O line are set out in the Annex.

Carrying capacity and loading of railway lines are effective indicators commonly used for measuring levels of railway services. As regards the design and arrangement of various "hardware" LEGISLATIVE COUNCIL ― 21 April 2021 5017

components (including platforms and station entrances), they will be designed and constructed in such a way as to ensure adequate capacity to handle passenger flow. MTRCL will flexibly implement passenger flow control measures in the light of volume of passenger traffic, including changing the entry and exit arrangements of ticket gates, adjusting the upward or downward direction of escalators between the concourse and the platform, and implementing one-way passenger flow at station entrances, so as to alleviate bottlenecks at certain locations in concourses or platforms to ensure that the station is kept in good order.

It was observed that Exit A of Kwun Tong Station has a higher passenger flow during peak hours. In December 2018, additional ticket gates were installed at this exit to divert passenger flow. Moreover, additional staircase and lift between the concourse and the platform are being retrofitted at Kwun Tong Station to ease congestion during peak hours. The relevant works are scheduled for completion in the fourth quarter of 2023.

(3) With the gradual development and transformation of Kowloon East into the second core business district of Hong Kong, there is progressive rise in the residential and working population in the area. Various government departments have been striving hard to provide comprehensive railway and road infrastructural facilities and appropriate public transport services including franchised buses and green minibuses to cope with the traffic demand in the area. MTRCL will continue to closely monitor the carrying capacity of the overall railway network including the Kwun Tong Line and make timely adjustment to train services in light of changes in patronage to meet passenger demand.

(4) The Government has proposed to construct an elevated landscaped deck of about 120 metres in length to link up Kwun Tong Station with the two new developments in the vicinity, so as to enhance pedestrian accessibility in the area, provide pedestrians with more convenient facilities and better direct passenger flow between Kwun Tong Station and neighbouring facilities. In the future, passengers may travel between Exits C and D of Kwun Tong Station via the deck and reach the existing walkway that leads to Yuet Wah Street, 5018 LEGISLATIVE COUNCIL ― 21 April 2021

thereby reducing passenger flow in the station. The Civil Engineering and Development Department is commencing relevant investigative study and planning work.

On the proposed expansion of Kwun Tong Station platforms, according to MTRCL's assessment, existing platforms have enough capacity to handle the projected patronage in the future. Besides, platform expansion works would disrupt the existing operation of the station, bringing risk to railway services and safety.

(5) MTRCL is gradually replacing the signalling systems of seven railway lines (Tsuen Wan Line, Island Line, Kwun Tong Line, Tseung Kwan O Line, Disneyland Resort Line, Tung Chung Line and the Airport Express). Upon completion of the project, it is expected that the overall carrying capacity can be increased by about 10%.

Before the commissioning of the new signalling systems of various railway lines, MTRCL will continue to closely monitor the patronage of the lines, and adopt a multipronged approach to improve passenger flow and enhance passengers' travelling experience, including flexible adjustment of train service, strengthening of passenger flow control measures, and improvement of the station layout in the light of changes in patronage.

Annex

Kwun Tong Line and Tseung Kwan O Line Carrying capacity and loading during the busiest hour in the morning per direction for critical links

January to 2017 2018 2019(1) 2020(2) March 2021(3) Kwun Tseung Kwun Tseung Kwun Tseung Kwun Tseung Kwun Tseung Tong Kwan Tong Kwan Tong Kwan Tong Kwan Tong Kwan Line O Line Line O Line Line O Line Line O Line Line O Line Carrying 71 400 67 600 71 400 67 600 71 400 67 600 71 400 67 600 71 400 67 600 Capacity (6 ppsm) LEGISLATIVE COUNCIL ― 21 April 2021 5019

January to 2017 2018 2019(1) 2020(2) March 2021(3) Kwun Tseung Kwun Tseung Kwun Tseung Kwun Tseung Kwun Tseung Tong Kwan Tong Kwan Tong Kwan Tong Kwan Tong Kwan Line O Line Line O Line Line O Line Line O Line Line O Line Patronage 52 100 47 600 51 200 48 200 49 100 47 400 44 000 42 200 36 100 35 200 Loading 73% 70% 72% 71% 69% 70% 62% 62% 51% 52% (6 ppsm) Loading 102% 99% 101% 100% 97% 98% 87% 88% 71% 73% (4 ppsm) Critical Shek Yau Shek Yau Shek Yau Shek Yau Shek Yau links Kip Tong Kip Tong Kip Tong Kip Tong Kip Tong Mei to to Mei to to Mei to to Mei to to Mei to to Prince Quarry Prince Quarry Prince Quarry Prince Quarry Prince Quarry Edward Bay Edward Bay Edward Bay Edward Bay Edward Bay

Notes:

(1) Only data of the first half of 2019 was included as the figures in the second half of 2019 were affected by public order events.

(2) In view of the impact of the pandemic on patronage, the tabulated figures are based on data obtained in those months when the pandemic was relatively eased.

(3) As the figures only cover those from January to March 2021, their reference value may not be directly comparable to figures of other years.

Alternative payment mechanism for property transactions

19. MR CHAN CHUN-YING (in Chinese): President, at the end of last year, the Council of the Law Society of Hong Kong ("Law Society") suspected after investigation that a former employee of a law firm ("the firm"), which took up a significant number of property sale and purchase cases, had dishonestly misappropriated the money of the clients of the firm, and the Law Society intervened in the operation of the firm pursuant to the relevant legislation. The firm's practice forthwith ceased, and all the money of the firm has been held by the Law Society on trust. It has been reported that the firm's clients suffered huge losses because huge sums of money they deposited with the firm for property transactions (including deposit money and mortgage money from banks) were frozen. In order to prevent the occurrence of similar incidents, the Hong Kong Monetary Authority ("HKMA"), in collaboration with the banking industry, is 5020 LEGISLATIVE COUNCIL ― 21 April 2021 exploring a payment mechanism for property transactions that does not involve law firms ("alternative payment mechanism"), with an option under consideration being that the purchaser's bank transfers the major sums of payments involved in a property transaction directly into the vendor's bank account. In this connection, will the Government inform this Council:

(1) if it knows the total amount of money frozen in the past 10 years due to the Law Society's intervention which had been deposited with law firms by their clients for property transactions, as well as the amount and percentage of such money which has now been unfrozen and returned to the clients concerned;

(2) whether HKMA has explored ways to enable the alternative payment mechanism to better ensure, as compared with the existing mechanism, the security of property transactions (e.g. ensuring that the purchaser's solicitor has verified the title prior to the transfer of money by banks); and

(3) whether HKMA has commenced a consultation exercise with the stakeholders on the alternative payment mechanism; if so, the initial views received; if not, when the consultation exercise will commence?

SECRETARY FOR FINANCIAL SERVICES AND THE TREASURY (in Chinese): President, having consulted the Department of Justice and the Hong Kong Monetary Authority ("HKMA"), my reply to the various parts of the question is as follows:

(1) According to the information provided by the Law Society of Hong Kong ("Law Society"), there were a total of 23 interventions involving law firms between 2011 and 2020.

In respect of the 21 interventions from 2011 to 2019, the Law Society received a total of 979 claims (excluding those that were subsequently withdrawn). The total amount of admitted claims was about HK$130 million. For the two interventions in 2020 which are still in receipt of claims, the Law Society is unable to provide the total number of claims at this stage. The Law Society has also LEGISLATIVE COUNCIL ― 21 April 2021 5021

indicated that as the intervention agents did not categorize the amount of claims by their nature, it is not able to provide other figures sought in the question.

(2) As noted from the above figures, apart from Messrs. Wong, Fung & Co. whose practice was intervened by the Law Society in December 2020, the past decade also saw other incidents in Hong Kong where clients involved in property and other transactions were affected by law firms with problematic practices. HKMA is studying with the banking industry an alternative payment arrangement for property transactions and the related operational flows and details. Without prejudice to the roles and responsibilities of the various parties involved in a property transaction (including the buyer, the seller, their respective law firms, and their respective mortgage banks), the new arrangement will allow banks to settle payments of property mortgage loan proceeds and other sizable funds in relation without routing through the accounts of law firms. The proposed arrangement aims at minimizing any impact on banks and clients in the event of serious disruption in the operation of a law firm and enhancing protection for the parties involved in a property transaction. In fact, under special circumstances there are at present certain property transactions in which the mortgage loan proceeds and other related payments are settled using bank cashier's orders without going through accounts of law firms.

(3) HKMA and the banking industry are closely discussing and following up on the alternative payment arrangement proposal with the relevant stakeholders (including the Law Society and the Consumer Council). From the comments received so far, there was support for the objective of the proposed arrangement to protect various parties in a property transaction; some stakeholders considered that the proposed arrangement should be implemented as soon as practicable; others also suggested the need for the proposed arrangement to cater for property transactions in different scenarios and circumstances with a view to ensuring adequate protection for all the parties involved. HKMA and the banking industry will take into account the comments received to refine the proposal and firm up the operational flows and details.

5022 LEGISLATIVE COUNCIL ― 21 April 2021

Influenza vaccination services

20. DR PRISCILLA LEUNG (in Chinese): President, under the Seasonal Influenza Vaccination School Outreach (Free of Charge) ("the free scheme"), a Public-Private-Partnership ("PPP") Outreach Team or an Outreach Team of the Department of Health ("DH") will go to those primary schools, as well as kindergartens, kindergarten-cum-child care centres and child care centres (collectively referred to as "KGs/CCCs") participating in the scheme to administer influenza vaccines to schoolchildren free of charge. The participating primary schools are provided with the vaccines by DH, but the vaccines for the participating KGs/CCCs need to be arranged by the participating doctors themselves. Schools not participating in the free scheme may participate in the Vaccination Subsidy Scheme School Outreach (Extra Charge Allowed) ("the charge-allowable scheme") so as to arrange school outreach vaccination services for their students, and the Government will provide a subsidy of $240 per dose of vaccine. On the other hand, the findings of a survey conducted at the end of last year have shown that 20% of the early childhood educators surveyed indicated that last year, the KGs/CCCs in which they taught had participated in the free scheme, but had been unable to arrange for their schoolchildren to receive influenza vaccination due to the doctors being unable to procure the vaccines or the impact of class suspension. Moreover, 85% of the respondents considered that the non-provision of vaccines by DH to KGs/CCCs had increased the workload of the teaching staff in those schools. Regarding influenza vaccination services, will the Government inform this Council:

(1) of the following information in each of the past two school years:

(i) the number of schools participating in the free scheme,

(ii) the number of schools participating in the charge-allowable scheme,

(iii) among the schools mentioned in (i), the respective numbers of those that opted for the matching of Outreach Teams by DH, that were successfully matched with Outreach Teams by DH, and selected doctors themselves,

(iv) among the schools mentioned in (i) and (ii), the number of those that eventually did not arrange for their students to receive vaccination, and

LEGISLATIVE COUNCIL ― 21 April 2021 5023

(v) the number of schoolchildren who received influenza vaccination under the two schemes;

of a breakdown of such figures by school type (i.e. primary school and KG/CCC);

(2) of the number of doses of influenza vaccines procured by the Government for the various vaccination programmes and the values of the relevant contracts in each of the past two school years; among such vaccines, the number of doses used in the free scheme;

(3) as the Government indicated in October last year that it would additionally supply in phases 100 000 doses of influenza vaccines to PPP Outreach Teams and doctors participating in the Vaccination Subsidy Scheme in need, of the number of doses of such vaccines supplied to those doctors providing outreach vaccination services to schoolchildren in KGs/CCCs, with a breakdown by vaccine type (i.e. inactivated vaccine and live attenuated nasal vaccine); and

(4) as some principals of KGs/CCCs have relayed to me that since the Government does not provide influenza vaccines to KGs/CCCs participating in the free scheme, such schools need to shoulder a substantial amount of additional administrative work (e.g. assisting the doctors in ordering vaccines, and responding to parents' enquiries about the safety of the vaccines after the occurrence of cases in South Korea and Taiwan in which some residents died soon after receiving influenza vaccination), of the support provided in this respect to the KGs/CCCs by DH and the Education Bureau; whether the Government will consider afresh providing vaccines to those KGs/CCCs participating in the free scheme from the 2021-2022 school year onwards; if so, whether the Government intends to provide inactivated vaccines or live attenuated nasal vaccines; if not, of the reasons for that?

SECRETARY FOR FOOD AND HEALTH (in Chinese): President, influenza can cause serious illnesses in high-risk individuals and even healthy persons. Given that seasonal influenza vaccines are safe and effective, all persons aged six months or above, except those with known contraindications, are recommended to receive influenza vaccination for personal protection. The Government has 5024 LEGISLATIVE COUNCIL ― 21 April 2021 all along been encouraging members of the public to receive vaccination as early as possible. In the 2020-2021 season, free or subsidized influenza vaccination is provided for eligible groups under the Government Vaccination Programme, the Vaccination Subsidy Scheme ("VSS") and the Seasonal Influenza Vaccination School Outreach (Free of Charge) ("School Outreach (Free of Charge)"). To increase the influenza vaccination uptake rate of schoolchildren and to support schools in organizing outreach vaccination services, apart from the continued provision of free outreach vaccination services at primary schools, outreach services to kindergartens/kindergarten-cum-child care centres/child care centres (collectively referred to as "KGs/CCCs") have been regularized in the 2020-2021 season. Schools not participating in the School Outreach (Free of Charge) may arrange outreach vaccination services through the VSS School Outreach (Extra Charge Allowed) ("School Outreach (Extra Charge Allowed)").

In consultation with the Department of Health ("DH"), our reply to various parts of the question raised by Dr Priscilla LEUNG is as follows:

(1) The numbers of schools which participated in the School Outreach (Free of Charge) and the School Outreach (Extra Charge Allowed) and organized outreach vaccination activities in the 2019-2020 and the 2020-2021 seasons are set out below:

2020-2021 2019-2020 season season (as at 6 April

2021) Primary KGs/ Primary KGs/ schools CCCs schools CCCs (i) Number of schools which 430 701 438 697 participated in the School Outreach (Free of Charge) and organized outreach vaccination activities (a) Number of schools with 18 24 12 23 outreach vaccination activities provided by Government Outreach Teams LEGISLATIVE COUNCIL ― 21 April 2021 5025

2020-2021 2019-2020 season season (as at 6 April

2021) Primary KGs/ Primary KGs/ schools CCCs schools CCCs (b) Number of schools with 412 677 426 674 outreach vaccination activities provided by Public-Private-Partnership ("PPP") Outreach Teams (c) Number of schoolchildren 195 600 82 300 167 000 67 700 receiving influenza vaccination (ii) Number of schools which 114# 55## 120* 80** participated in the School Outreach (Extra Charge Allowed) and organized outreach vaccination activities (a) Number of persons 43 900 10 900 41 000 13 300 receiving influenza vaccination (including schoolchildren and other eligible groups under VSS)

Notes:

# There are another 53 primary schools participating in both the School Outreach (Free of Charge) and the School Outreach (Extra Charge Allowed).

## There are another 62 KGs/CCCs participating in both the School Outreach (Free of Charge) and the School Outreach (Extra Charge Allowed).

* There are another 66 primary schools participating in both the School Outreach (Free of Charge) and the School Outreach (Extra Charge Allowed).

** There are another 85 KGs/CCCs participating in both the School Outreach (Free of Charge) and the School Outreach (Extra Charge Allowed).

5026 LEGISLATIVE COUNCIL ― 21 April 2021

Schools participating in the School Outreach (Free of Charge) may opt for self-selection of outreach vaccination teams or require matching by DH. The breakdown of the figures in the 2019-2020 and the 2020-2021 seasons is set out below:

2020-2021 2019-2020 season season (as at 6 April

2021) Primary KGs/ Primary KGs/ schools CCCs schools CCCs Number of schools with 412 677 426 674 outreach vaccination activities provided by PPP Outreach Teams (a) Self-selection of 198 401 319 605 outreach vaccination teams (b) Matching by DH 214 276 107 69

Schools participating in the School Outreach (Extra Charge Allowed) are required to arrange their outreach vaccination teams.

(2) The number of doses of inactivated influenza vaccine (unless otherwise stated) procured by the Government for the influenza vaccination programmes mentioned above and the contract amount in the past two seasons are set out below:

Season Number of doses Amount ($ million) 2019-2020 (Actual) 815 000* 40.8 2020-2021 (Estimate) 947 000# 93.0

Notes:

* Including 1 700 doses of nasal live attenuated influenza vaccines ("LAIV").

# Including 69 000 doses of LAIV.

LEGISLATIVE COUNCIL ― 21 April 2021 5027

Among the influenza vaccines procured in the 2019-2020 and the 2020-2021 seasons, about 239 000 doses and 250 000 doses were respectively used in the School Outreach (Free of Charge).

(3) In view of the keen local demand and tight global supply of influenza vaccines when various influenza vaccination programmes were rolled out in the 2020-2021 season, the Government, having reviewed the demand after the launch of various influenza vaccination programmes, announced on 22 October 2020 that it would procure additional vaccines and supply additional 100 000 doses in phases to PPP Outreach Teams and doctors participating in VSS in need, so as to facilitate early vaccination of high risk groups and help relieve the tight supply in the private healthcare sector. Among the additional supply of vaccines, about 11 200 doses of LAIV were supplied to doctors providing outreach vaccination services for schoolchildren in KGs/CCCs.

(4) The School Outreach (Free of Charge) is primarily coordinated by DH. Under the 2020-2021 School Outreach (Free of Charge)―KGs/CCCs, vaccines are procured by the doctors of the PPP Outreach Teams matched to the participating schools, instead of the schools themselves. Besides, doctors of the Outreach Teams are responsible for answering parents' enquiries about influenza vaccination. In addition, DH has also set up a telephone line for parents to enquire about matters in relation to influenza vaccination.

Having reviewed the arrangements for the 2020-2021 School Outreach (Free of Charge)―KGs/CCCs, DH has drawn up the arrangements for the 2021-2022 season under which influenza vaccines will be provided by DH to the participating KGs/CCCs. Depending on the supply, DH will provide inactivated influenza vaccines and LAIV for selection by KGs/CCCs and doctors of the PPP Outreach Teams.

Housing supply

21. MR KWOK WAI-KEUNG (in Chinese): President, regarding housing supply, will the Government inform this Council:

5028 LEGISLATIVE COUNCIL ― 21 April 2021

(1) of the number of public rental housing ("PRH") units completed in each of the past five years and, among them, the number of those which were subsequently converted into subsidized sale housing units, with a breakdown of the relevant numbers and percentages by the type of such units (i.e. Type A (about 14 square metres), Type B (about 21 square metres), Type C (about 31 square metres) and Type D (about 35 square metres));

(2) of the respective numbers of housing units expected to be completed in the following sites in 2025-2026 financial year and each of the subsequent four years: (i) the sites provided under the Tung Chung New Town Extension, (ii) the agricultural land and brownfield sites in Kwu Tung North/Fanling North New Development Area, (iii) the agricultural land and brownfield sites in Hung Shui Kiu/Ha Tsuen New Development Area, (iv) the relevant site of the Fanling Golf Course, (v) the sites of three urban squatter areas located at Cha Kwo Ling, Ngau Chi Wan and Chuk Yuen United Village respectively, (vi) the sites of three factory estates of the Hong Kong Housing Authority, and (vii) the eight brownfield clusters with housing development potential (set out in Table 1);

Table 1 Financial year Sites 2025-2026 2026-2027 2027-2028 2028-2029 2029-2030 (i) … (vii)

(3) among the some 20 000 housing units that may be provided by the topside development of the MTR Siu Ho Wan Depot site, of the respective (i) numbers and (ii) percentages of those which will be (a) private housing units, (b) subsidized sale housing units (excluding those under the Green Form Subsidised Home Ownership Scheme ("GSH")), (c) GSH units and (d) PRH units, with a breakdown by the anticipated year of completion (set out in Table 2); and

LEGISLATIVE COUNCIL ― 21 April 2021 5029

Table 2 Type of units (i) (ii) (a) … (d)

(4) as the Government indicated last month that it was close to completing the work on reviewing those private lands which had been zoned for high-density housing development but without concrete development plans, when the review results are expected to be announced?

SECRETARY FOR DEVELOPMENT (in Chinese): President, the Government has been striving to boost land and housing supply through a multi-pronged strategy. My reply to various parts of the question is as follows:

(1) Based on the information provided by the Transport and Housing Bureau, at present, new public rental housing ("PRH")/Green Form Subsidised Home Ownership Scheme ("GSH") projects of the Hong Kong Housing Authority ("HA") mainly provide four types of units, namely Type A units (for one to two persons), Type B units (for two to three persons), Type C units (for three to four persons) and Type D units (for four to five persons) to meet the needs of different household sizes.

The number and percentage of PRH units newly completed by HA from 2015-2016 to 2019-2020 by flat type are set out in the following table:

Table 1: Number of HA's newly-completed PRH units by flat type (2015-2016 to 2019-2020)

2015- 2016- 2017- 2018- 2019- Flat Type 2016 2017 2018 2019 2020 Type A 2 543 2 314 2 205 2 925 1 701 (18%) (20%) (16%) (17%) (17%) Type B 4 276 1 771 3 213 3 716 3 019 (30%) (16%) (24%) (21%) (30%) 5030 LEGISLATIVE COUNCIL ― 21 April 2021

2015- 2016- 2017- 2018- 2019- Flat Type 2016 2017 2018 2019 2020 Type C 5 718 5 891 4 370 5 308 3 244 (40%) (52%) (33%) (30%) (32%) Type D 1 727 1 300 3 625 5 697 2 143 (12%) (12%) (27%) (32%) (21%) Total 14 264 11 276 13 413 17 658* 10 107 (100%) (100%) (100%) (100%) (100%)

Note:

* Including 12 Type E units (for 5 persons or above).

When HA regularized GSH in January 2018, HA also established the principle of selecting suitable PRH projects for conversion to GSH projects. From 2015-2016 to 2019-2020, HA has completed two GSH projects. Details are set out as follows:

Table 2: Number of units in completed GSH projects (2015-2016 to 2019-2020)

Year of Flat Type GSH Project Total Completion Type A Type B Type C Type D King Tai Court 2016- 125 234 254 244 857 (Wong Tai Sin) 2017 (15%) (27%) (30%) (28%) (100%) Lai Tsui Court 2018- 300 600 898 747 2 545 (Sham Shui Po) 2019 (12%) (24%) (35%) (29%) (100%)

Note:

The above GSH units are not counted in the newly-completed PRH units in Table 1.

(2) The Government has been actively taking forward various initiatives to increase land supply. As far as the Tung Chung New Town Extension is concerned, the Tung Chung East reclamation works commenced in end 2017 and has been progressing well. The first parcel of reclaimed land was handed over to HA for housing development in March 2020, and the first batch of 10 000 housing units are expected to be completed in 2024. The whole extension LEGISLATIVE COUNCIL ― 21 April 2021 5031 project will be completed in 2030 and is expected to provide about 62 100 housing units (including 44 700 public and 17 400 private housing units).

For the New Development Areas ("NDAs"), Kwu Tung North/Fanling North NDA will provide a total of about 71 800 housing units (including 48 500 public and 23 300 private housing units), and the first batch of about 800 private units are expected to be completed in 2023 (the actual number of housing units and the completion time frame are subject to the respective private developer). The whole NDA project is anticipated to be completed in phases by 2031-2032. The Hung Shui Kiu/Ha Tsuen NDA will provide about 61 000 housing units (including 31 200 public and 29 800 private housing units for now), with the first batch of Dedicated Rehousing Estate providing about 700 units to be completed in 2024. The whole NDA project is anticipated to be completed in phases by 2038.

Regarding the partial development of Fanling Golf Course Site, subject to study findings, it is estimated that about 9 000 public housing units can be provided in 2029.

Besides, the engineering feasibility studies ("EFSs") on redeveloping three urban squatter areas at Cha Kwo Ling, Ngau Chi Wan and Chuk Yuen United Village into high-density public housing are expected to be completed within 2021, followed by rezoning, site formation, etc. Subject to study findings, these three projects are expected to provide a total of 6 300 public housing units.

As regards HA's factory estates, as mentioned in the Chief Executive's 2020 Policy Address, part of the six factory estates under HA can be redeveloped as public housing. It is estimated that a total of over 3 000 public housing units will be provided in 2031.

For brownfield, the Planning Department completed in 2019 the first phase review on 160 hectares of brownfield sites closer to the existing infrastructures, and shortlisted and promulgated eight brownfield clusters located in Yuen Long, Tuen Mun and Tai Po for higher density public housing development in the short to medium 5032 LEGISLATIVE COUNCIL ― 21 April 2021

term. The Civil Engineering and Development Department has progressively commenced EFSs for these brownfield clusters from June 2020 onwards. Subject to the outcome of EFSs, it is roughly estimated that these eight brownfield clusters may produce over 20 000 public housing units. At this stage, we expect to complete EFSs, rezoning, detailed design, land resumption, clearance, land decontamination and site formation works, and hand over the sites to the relevant authority for construction of public housing in about six years or less, with a view to progressively completing the production of the first batch of housing units within 10 years approximately from the commencement of EFS (i.e. starting from 2030-2031).

For projects with completion dates scheduled for 2025-2026 and beyond, they are mostly at "land production" stage and the availability of sites are subject to various factors such as rezoning, infrastructure construction and site formation works, etc. Moreover, in many cases, the sites are still subject to feasibility studies or investigation. Some of these sites also involve land resumption, clearance, or reprovisioning of affected facilities. For projects involving Government-funded works, funding approval from the Legislative Council is also required. As these projects are subject to changes, it is difficult to provide detailed information and timetable at this stage. Relevant information will be provided in a timely manner according to the rolling production programme.

As for private housing, the Government will, in accordance with the existing mechanism, announce private housing supply of the next financial year in the Annual Land Sale Programme. As the relevant mechanism and Land Sale Programme involve market-sensitive information, we generally do not conduct forecasts on the Programme of other years.

(3) The Siu Ho Wan Depot Site is expected to provide about 20 000 housing units in the medium to long term, of which around 50% will be public housing (the current plan is mainly subsidized sale flats), forming a new community with public and private housing, various community facilities, and also a new railway station.

LEGISLATIVE COUNCIL ― 21 April 2021 5033

The Government has drawn up the Outline Zoning Plan for the Site. The MTR Corporation Limited and government departments are pressing ahead with this development, including taking forward the detailed design of the project, layout plan preparation, and gazettal procedures for the works. In view of the scale of the development, and the need for in-situ reconfiguration of existing railway facilities for topside development while ensuring that railway operations are not affected, the development will be completed by phase. The target is to have the first batch of about 6 000 public and private housing gradually ready for intake in around 2030. The layout plan for the development is expected to be submitted to the Town Planning Board within this year to provide further details on the project.

(4) The Development Bureau ("DEVB") has identified 10 private land parcels for the relevant review in order to assess their suitability for public housing development. The relevant review is close to completion and DEVB will announce the review results shortly. For land parcels assessed to be suitable for public housing development, the Government will resume the private land involved by invoking the Lands Resumption Ordinance (Cap. 124) in accordance with the existing mechanism.

Developing public housing on brownfield sites

22. MS ALICE MAK (in Chinese): President, in its Study on Existing Profile and Operations of Brownfield Sites in the New Territories published in November 2019, the Planning Department ("PlanD") indicated that 450 hectares of scattered brownfield sites might have relatively higher possible development potential in view of their proximity to existing new towns and major highways as well as their relatively large size. PlanD completed early last year the review of about 160 hectares of such brownfield sites which were closer to the existing infrastructure, and shortlisted eight brownfield clusters suitable for public housing development. Relevant engineering feasibility studies have commenced. In this connection, will the Government inform this Council:

5034 LEGISLATIVE COUNCIL ― 21 April 2021

(1) of the following details of the various brownfield clusters:

(i) the areas and distribution of the various sites, broken down by the uses thereof,

(ii) the number of lots occupied by existing operators, and their lot numbers and site areas, and

(iii) the current numbers of residential units and residents;

(2) of the following details expected of the various brownfield clusters upon completion of public housing development:

(i) the areas and distribution of the various sites, broken down by the uses thereof (including housing, community facilities and roads),

(ii) the number of residential units and the plot ratios of the sites concerned, and

(iii) the carrying capacity of nearby transport systems, including the traffic capacities of trunk roads and public transport interchanges; and

(3) whether it has drawn up a timetable for carrying out the following work for the various brownfield clusters:

(i) the various processes involved in turning "non-spade-ready" sites into "spade-ready" sites (including engineering feasibility studies, detailed design, rezoning, land resumption, clearance, land decontamination and site formation works, and handover of the sites to the Housing Department), and

(ii) expounding the compensation and rehousing arrangements to the affected residents and operators?

LEGISLATIVE COUNCIL ― 21 April 2021 5035

SECRETARY FOR DEVELOPMENT (in Chinese): President, the reply to the various parts of Ms Alice MAK's question is as follows:

(1) Of the 450 hectares of brownfield sites with no development plans but may have higher possible development potential, the Planning Department ("PlanD") completed the first-phase review of 160 hectares of brownfield sites closer to the existing infrastructure in 2019,(1) and promulgated eight shortlisted clusters in Yuen Long, Tuen Mun and Tai Po suitable for higher density public housing development in the short to medium term (details are set out in LC Paper No. CB(1)463/19-20(01)).(2) The locations and study areas of these brownfield clusters are at Annex. PlanD has uploaded the study area and site plan of each cluster onto its website.(3)

According to the findings of the "Study on Existing Profile and Operations of Brownfield Sites in the New Territories", it is estimated that these eight clusters covering 36 hectares of brownfield sites may involve approximately 230 operations, which mainly include general warehouse and storage, as well as facilities related to the logistics and construction industries. In addition, should the public housing development projects be implemented, removal of structures scattering across the shortlisted brownfield clusters (possibly including a small number of temporary domestic structures) may be unavoidable for optimizing land development.

Upon completion of the engineering feasibility study ("EFS") for each shortlisted brownfield cluster and confirmation of the feasibility of the proposed public housing development projects and the

(1) The second-phase review of the remaining 290 hectares of brownfield sites was also completed. Details are set out in LC Paper No. CB(1)756/20-21(01) .

(2) The hyperlink is as follows: .

(3) The hyperlink is as follows: . 5036 LEGISLATIVE COUNCIL ― 21 April 2021

development parameters, the Government would initiate the procedures for rezoning, detailed design and land resumption accordingly. Detailed information about the lots being occupied by the operators, and the numbers of households and residents involved would be available after the completion of freezing surveys by the Lands Department.

(2) The Civil Engineering and Development Department ("CEDD") has progressively commenced EFSs for these eight brownfield clusters from June 2020 onwards. EFSs will explore the feasibility and development parameters of public housing developments, review and recommend the required upgrading of infrastructural facilities such as transport, drainage, sewerage, water supply, etc. EFSs are expected to be completed successively in around 2022. CEDD will, having regard to the needs of the planned population, recommend the provision for Government, institution or community facilities, open space and commercial facilities in consultation with relevant departments and with reference to the Hong Kong Planning Standards and Guidelines. Any possible impacts arising from the proposed public housing developments on the adjacent roads and the improvement measures so required would be established upon the completion of the traffic and transport impact assessments for each brownfield cluster.

Subject to the findings of EFSs, it is roughly estimated at this stage that the eight brownfield clusters may produce over 20 000 public housing units. This estimation is based on the maximum domestic plot ratio of 3.6 for rural areas as set out in the Hong Kong Planning Standards and Guidelines. In view of the shortage of public housing supply, we are further exploring under EFSs the feasibility to raise the domestic plot ratio with a view to increasing the supply of housing units by taking into full consideration various development constraints (such as the capacity of transport infrastructure). The actual development parameters are subject to the findings of EFSs.

LEGISLATIVE COUNCIL ― 21 April 2021 5037

(3) For these eight brownfield clusters, at this stage, we expect to transform them into "spade-ready sites" through completing EFSs, detailed design, rezoning, land resumption, clearance, land decontamination and site formation works, and hand over the sites to the relevant authority for construction of public housing in about six years to increase the supply in the short to medium term.

Relevant compensation and rehousing arrangements for affected households and brownfield operators will be provided in accordance with the enhanced ex gratia measures announced in May 2018. Our plan is to explain the compensation and rehousing arrangements to all relevant parties after the freezing surveys.

Annex

Brownfield Clusters Shortlisted for Public Housing Development

Location of Brownfield Cluster shortlisted in the first-phase review

Study Area [Area of Brownfield Location of Brownfield Sites Current Land Use Zoning Cluster Involved] (about) (hectare)Note Yuen Long 1. Ping Shan North 18 "Comprehensive Development (East of Long Tin Road [9] Area"; and West of Yung Yuen "Government, Institution or Road) Community"; "Residential (Group B)" ; "Residential (Group E)" and "Green Belt" 5038 LEGISLATIVE COUNCIL ― 21 April 2021

Study Area [Area of Brownfield Location of Brownfield Sites Current Land Use Zoning Cluster Involved] (about) (hectare)Note 2. Shap Pat Heung 4 "Agriculture" (East of Long Ho Road [2] near Shap Pat Heung Interchange) 3. Tai Kei Leng 2 "Open Space" and (North of Tai Kei Leng [1] "Residential (Group B)" Road) 4. Sha Po 17 "Industrial (Group D)" and (East of San Tam Road) [13] "Agriculture" 5. Ping Shan South 8 "Residential (Group D)"; (South of Tan Kwai Tsuen [3] "Comprehensive Development Road) Area" and "Green Belt" Tuen Mun 6. Nai Wai 5 "Residential (Group C)" and (North of Wong Kong [3] "Residential (Group D)" Wai Road) 7. Lam Tei North 7 "Residential (Group D)" and (South of Shun Tat Street) [2] "Green Belt" Tai Po 8. Tai Hang 3 "Agriculture" (near Tai Wo Service [1] Road West) Total ~63 [~36]

Note:

Due to rounding, the sum of figures may differ slightly from the total.

LEGISLATIVE COUNCIL ― 21 April 2021 5039

GOVERNMENT BILL

Second Reading of Government Bill

Resumption of Second Reading Debate on Government Bill

PRESIDENT (in Cantonese): Government Bill.

This Council resumes the Second Reading debate on the Appropriation Bill 2021.

This meeting is the second Budget meeting. In the relevant circular to all Members, the Clerk to the Legislative Council has reminded Members that this meeting aims to let Members speak in the Second Reading debate. In accordance with the House Rules, each Member may speak once for a maximum of 10 minutes. As there will be sufficient time for all Members to speak today, I have decided that this meeting be held in one day only and be adjourned when no more Member indicates the intention to speak.

I remind Members that the Second Reading debate on the Bill will continue next Wednesday (i.e. 28 April) when the third Budget meeting will be held, but at which only public officers may speak to respond to Members' views.

If the motion for Second Reading is passed, this Council will forthwith go into committee of the whole Council to consider the Bill.

Members who wish to speak please press the 'Request to speak' button.

APPROPRIATION BILL 2021

Resumption of debate on Second Reading which was moved on 24 February 2021

MS STARRY LEE (in Cantonese): President, this Budget was delivered amid a difficult time for the Hong Kong economy. Last year, Hong Kong's overall economy contracted by 6.1%, the largest annual decline on record. It was also the first time that Hong Kong had experienced negative economic growth for two consecutive years. The labour market has deteriorated sharply, with the latest 5040 LEGISLATIVE COUNCIL ― 21 April 2021 unemployment rate reaching a 17-year high of 7.2% with more than 260 000 people out of work. The Financial Secretary ("FS") forecasted a deficit of $257.6 billion for 2020-2021 and it is expected that fiscal deficits will be recorded in the coming five years.

FS expressed a relatively optimistic view of the outlook in the Budget in the belief that economic recovery would gain a stronger momentum in the second half of the year. FS also forecasted a real economic growth rate of 3.5% to 5.5% this year. Yet, it is already April and the epidemic situation continues to fluctuate. Members of the public are hence deeply worried that the economy may not show positive growth in the second half of the year as forecasted by FS. In view of this, the Democratic Alliance for the Betterment and Progress of Hong Kong ("DAB") supports FS in adopting a deficit budget and counter-cyclical measures to increase government spending and boost the economy. We consider that the deficit budget and counter-cyclical measures dovetail with society's needs and public expectations.

Firstly, FS will, for the first time, issue electronic consumption vouchers with a total value of $5,000 to each Hong Kong citizen aged 18 or above, so as to boost local consumption and promote e-payment. Members of the public have expressed similar concerns over this proposal since its announcement, and I hope that FS will take their views on board. First, the Government should minimize the relevant administrative costs; second, it should allow the consumption vouchers to be accumulated for use within a specified validity period to give members of the public more flexibility in consumption. If the consumption vouchers can be used to, say, seek medical consultation, enjoy cultural performances and attend tutorial classes, this may enhance their effectiveness in stimulating the economy.

In addition, to complement the consumption voucher scheme, Policy Bureaux should encourage trade associations to launch price-cut promotions to further stimulate consumption during the voucher validity period. Meanwhile, the Government should ensure that the platform system developed for the electronic consumption voucher scheme can continue to be used in future to dovetail with the country's implementation of digital currency scheme and the future introduction of similar schemes in Hong Kong.

Apart from issuing consumption vouchers to boost consumption, the Budget has also responded to a number of DAB's requests, including further allocating $6.6 billion to create around 30 000 time-limited jobs. In 2020-2021, LEGISLATIVE COUNCIL ― 21 April 2021 5041 the Government undertook to create some 30 000 time-limited jobs within two years through the Anti-epidemic Fund, so the aforesaid Budget initiative is a continuation of its commitment. We strongly support the creation of temporary jobs, but the progress is too slow to address the current situation with unemployment rate standing as high as 7.2%, or fails to live up to the expectation of 260 000 job losers.

According to the information provided by the Government at the special meetings of the Finance Committee, while it appears that the job creation target undertaken by the Government last year has been achieved as at the end of February, only 18 000 jobs were actually taken up and the recruitment of the remaining 13 000 posts is either underway or has not yet started. As regards the creation of 30 000 time-limited jobs proposed in the Budget as I just said, the detailed plan will not be formulated until the Budget is passed. I hope that FS and the various government departments will break away from established practices. In fact, wage earners are in a very difficult situation because not only the unemployment rate keeps hitting new highs, but the Employment Support Scheme is also over. Wage earners are left helpless. When the unemployment situation can only get worse, I hope that the Government would stop playing for time and create as many jobs as possible so as to expeditiously get the job done and help wage earners tide over this hard time.

The Budget has also taken on board our other suggestions, including reducing salaries tax and profits tax; providing rates concession for domestic properties; providing an additional allowance to recipients of the Comprehensive Social Security Assistance, Old Age Allowance, Old Age Living Allowance, Disability Allowance and Work Incentive Transport Subsidy, as well as granting an electricity subsidy. In respect of enterprise support, the Budget has proposed to provide rates concession, waive water and sewage charges payable, and grant rental concession to tenants of government properties; waive the business registration fees; and increase the maximum loan amount which is 100% guaranteed by the Government under the SME Financing Guarantee Scheme, etc. I understand that FS has tried every way to help, and even though the amount of relief is less than before, it should still be able to help individuals and enterprises survive in peril.

It should be noted that, as proposed in the Budget, the Government will issue no less than $24 billion of Silver Bond and $15 billion of inflation-linked iBond and plan to issue green retail bonds. It has also lower the eligible age for 5042 LEGISLATIVE COUNCIL ― 21 April 2021 subscribing Silver Bond from 65 to 60. Given the utterly low interest rate environment at present, these bond issuance initiatives are timely and will have a positive impact on the bond market. We therefore welcome them.

President, similar to Hong Kong, Singapore announced its budget for the following year in February. Apart from the issuance of green bonds like us, another highlight in its budget is the issuance of infrastructure bonds to fund Singapore's long-term infrastructure development. I think FS and the Hong Kong Government should take a cue from this measure. Given Hong Kong's abundant foreign exchange reserves and a consistently low debt-GDP ratio, the Government definitely has the ability to increase its bond issuance. Considering its huge fiscal pressure in the future, economic uncertainty and rising infrastructure spending, the Government should further explore the issuance of infrastructure bonds under the current low interest rate environment as a way to relieve its huge fiscal pressure.

President, there is no doubt that the Budget has many initiatives that are worth supporting, but it also has some obvious deficiencies. The most disappointing of all is surely the repeated refusal of Secretary Dr LAW Chi-kwong to provide temporary unemployment assistance. As a result, FS can only introduce a 100% Personal Loan Guarantee Scheme in the Budget instead. As we all know, unemployment assistance and loans are completely different. In fact, many countries have provided short-term unemployment assistance to the unemployed during the epidemic. According to the information provided by the Legislative Council Secretariat, Singapore, Australia, New Zealand and Ireland have all provided similar financial assistance and the eligibility requirements of various schemes were clearly specified to avoid abuse as far as possible. I have discussed this proposal with Secretary Dr LAW Chi-kwong many times, telling him that if he was worried about any potential abuse, we might put our heads together to strike a balance in the introduction of temporary unemployment assistance. Unfortunately, we have not received any positive response from the Secretary so far. DAB's proposal is indeed very humble. We only hope that the Government will provide the unemployed in urgent financial need with short-term unemployment assistance of $6,000 per month for a maximum of six months.

President, the overall comment of DAB on this Budget is that "it is committed to stimulating the economy but deficient in unemployment support". We urge FS and the Government to address the pressing needs of the people LEGISLATIVE COUNCIL ― 21 April 2021 5043 when the political environment is relatively stable. The public desperately want the Government to do two things: first, to succeed in the fight against the epidemic, so that they can resume their normal lives and restart the economy; second, to support the hardest-hit people and industries. However, the Government's performance on these two tasks is on the whole disappointing and falls short of public expectations.

The epidemic situation in Hong Kong fluctuates, and no one knows when we can achieve "zero infection", reopen boundary crossing and resume normal lives. After a prolonged fight against the epidemic for over a year, the public now experience "anti-epidemic frustration" rather than "anti-epidemic fatigue". I do not mean to deny the Government's efforts in fighting the epidemic and there is no doubt that it works really hard, but it has huge room for improvement in terms of effectiveness.

Speaking of economic recovery, our country has long set "zero infection" as its goal and taken decisive measures to contain the epidemic. Its achievement is evident to all. In respect of anti-epidemic measures, Hong Kong's performance is not that impressive, and many people like to compare Hong Kong with Macao, which has done considerably well in epidemic control. So far, Macao has only 49 confirmed cases, no death case and as few as two local cases. Also, no healthcare personnel have been infected. In spite of its outstanding performance in fighting the epidemic, Macao's two pillar industries, i.e. gambling and tourism, have been hardly hit. In response, Macao introduces a series of support measures. Apart from cash handouts, Macao took an earlier step than Hong Kong in launching a consumption voucher scheme, distributing a total of $8,000 consumption vouchers to each citizen in last May and August. The third instalment of consumption vouchers will be distributed later.

Regarding the vaccination rate, Hong Kong is still on the low side. The vaccination rates in Israel, the United Kingdom and the United States are 61%, 48.2% and 38.7% respectively. Hong Kong's vaccination rate stands unsatisfactory low at 9.3% when compared with that of 19.3% in Singapore. In view of this, I hope that the Government will continue to consolidate its anti-epidemic experience and lead the public out of the epidemic as soon as possible. Most importantly, the Government should inform the public of the correlation between vaccination and cross-boundary travel. We have been urging, and I hope that the Government will continue to urge, the Central Government to shorten or even exempt the quarantine period for Hong Kong 5044 LEGISLATIVE COUNCIL ― 21 April 2021 people travelling to the Greater Bay Area if they are tested positive for antibodies after vaccination, with a view to expeditiously allowing Hong Kong people to resume normal lives. (The buzzer sounded)

PRESIDENT (in Cantonese): Ms Starry LEE, please stop speaking.

IR DR LO WAI-KWOK (in Cantonese): President, in the Budget released this year, Financial Secretary ("FS") Paul CHAN has proposed a number of measures for relieving people's burden and supporting the economy. He has also adopted 40-odd proposals put forward by the Business and Professionals Alliance for Hong Kong ("BPA") earlier, including issuing electronic consumption vouchers with a total value of $5,000; continuing to issue bonds to raise funds; encouraging the listing of more real estate investment trusts in Hong Kong; providing subsidies to carry out drainage repair in old buildings; continuing to launch the Green Lifestyle Local Tour Incentive Scheme, etc. Nevertheless, some people in society opine that the Budget has generally adopted a rather conservative approach and it lacks the strength in relieving people's burden.

In the past year, Hong Kong has experienced a total of four waves of the COVID-19 epidemic. Business is slack in all trades and industries and economic development has sunk into a quagmire. Many wage earners (including some middle-class people) have been suffering from reduced incomes and even layoffs. However, the relief measures introduced by the Government, the so-called "sweeteners", such as tax rebates, rate concessions, etc., have become less "sweetened" this year. For example, the tax rebate for salaries tax and tax under personal assessment is reduced from $20,000 last year to $10,000 this year. Also, BPA is disappointed that the Government has ignored its repeated requests for setting up an unemployment assistance fund.

The introduction of the 100% Personal Loan Guarantee Scheme, which is subject to a ceiling of $80,000, can slightly help wage earners to meet their imminent needs. It has the support of BPA. As for the upward adjustment of the rate of stamp duty on stock transfers, disregarding opposition of the financial sector of Hong Kong, BPA thinks that it will affect the development of the sector and harm the status of Hong Kong as an international financial centre. BPA also considers that while the economy of Hong Kong is still in a frozen state, the Government should prepare for the rainy days by introducing a greater number of LEGISLATIVE COUNCIL ― 21 April 2021 5045 more comprehensive counter-cyclical measures to help the small and medium enterprises ("SMEs") and wage earners as well as assist Hong Kong in seizing opportunities to revive the economy after the epidemic. When launching relief initiatives, e.g. issuing electronic consumption vouchers, the authorities should genuinely facilitate the people without setting too many restrictions. The authorities should trust the wisdom of members of the public and respect their choices so that everyone will be happy.

President, I have repeatedly urged the Government to increase its investment in public works so as to promote economic recovery through infrastructure projects. The engineering sector welcomes the Government's decision to continue to invest in infrastructure. The annual capital works expenditure will exceed $100 billion in coming years. The annual total construction output will increase to around $300 billion, creating over 300 000 employment opportunities.

At present, after the construction industry suffered successive shocks, unemployment rate remains at a level of about 11%, which is worrying. I have repeatedly urged the authorities to expeditiously review and sort out the existing list of large, medium and small public works projects in the pipeline, decide on the priority of implementation and take them forward according to the needs of the prevailing circumstances. At the same time, the projects should be split appropriately so that large, medium and small enterprises will have a fairer chance of participation. In this legislative year, this Council passed the Government's proposal to increase the financial ceiling of the delegated authority for works projects from $30 million to $50 million. Projects with lower costs no longer need to go through the three-step procedure of going through the relevant panel, the Public Works Subcommittee and the Finance Committee ("FC"). After the Legislative Council restores the normal state of discussion, deliberation on funding proposals at FC will be smoother. It is hoped that this will create conditions conducive to the orderly introduction of public works projects, which will be well received by the industry. In addition, BPA welcomes the Government's adoption of the proposal to continue to actively promote the modular integrated construction approach and digitalization of public works. We urge the authorities to allocate more resources to enhance the logistics of works projects; and take professional sectors such as the engineering sector as a pilot to expedite the implementation of e-government.

5046 LEGISLATIVE COUNCIL ― 21 April 2021

As regards promoting innovation and technology development, the Budget proposes to inject $9.5 billion to the Innovation and Technology Fund over two years to press ahead with the development of the Hong Kong-Shenzhen Innovation and Technology Park ("HSITP"), and continue to take forward the expansion of the Science Park and the construction of the fifth phase of the Cyberport. These are all worthy of support. BPA suggested the Government to provide incentives for private funds to participate in the construction of HSITP at Lok Ma Chau through financing methods other than drawing from the public coffer, and accelerate the promotion of mutual recognition of professional qualifications between the two places. In addition, it should set up a $5 billion smart city dedicated fund to expedite the implementation of a series of measures set out in the Smart City Blueprint for Hong Kong 2.0 announced in December last year, so as to upgrade Hong Kong into a world-class smart city.

In terms of employment and professional service development, we are glad that the Government will increase short-term and temporary jobs and allocate $6.6 billion to create 30 000 time-limited jobs to alleviate the worsening unemployment situation due to the persistence of the epidemic. As for the development of professional services, BPA urges the Government to reconsider our proposal and set up a dedicated fund to assist the professional development of young people, and strengthen support for the engineering sector and other professional sectors to seize business opportunities in the Guangdong-Hong Kong-Macao Greater Bay Area.

Furthermore, as the problem of disrepair of sewage pipes in old and dilapidated buildings was exposed during the epidemic, BPA has been lobbying the Government to enhance the maintenance of sewage systems in old and dilapidated buildings in Hong Kong, including subsidizing owners in need to carry out repairs. We are glad that the Government has heeded good advice and set aside $1 billion to subsidize owners of more than 3 000 old and dilapidated buildings to carry out drainage repair or enhancement works. At the same time, the Government should inject more resources to comprehensively step up sewage testing in buildings, including transferring testing technology from universities to government laboratories or even private laboratories so as to extend the coverage of sewage testing in high-risk areas.

President, from a macro perspective, if Hong Kong wants to revitalize the economy, it must integrate into the overall development of the country. The country announced in March this year the Outline of the 14th Five-Year Plan for LEGISLATIVE COUNCIL ― 21 April 2021 5047

National Economic and Social Development of the People's Republic of China and the Long-Range Objectives Through the Year 2035, in which the third section of Chapter 31 specifically mentioned "proactively and progressively taking forward the development of the Guangdong-Hong Kong-Macao Greater Bay Area ('GBA')". The main contents include strengthening the coordinated development of production, education, and research in Guangdong, Hong Kong, and Macao; improving the Guangzhou-Shenzhen-Hong Kong, Guangzhou-Zhuhai-Macao Science and Technology Innovation Corridor and Shenzhen-Hong Kong Loop, Guangdong-Macao Hengqin Science and Technology Innovation Pole "Two Corridors and Two Points" framework system; promote the construction of a comprehensive national science centre to facilitate the cross-border flow of innovative elements; speeding up the construction of intercity railway lines, coordinate the layout of ports and airports, optimize the allocation of shipping and aviation resources; expanding the scope of mutual recognition of professional qualifications between the Mainland, Hong Kong and Macao, and further promote the integration of rules and mechanisms in key areas, as well as facilitating young people from Hong Kong and Macao to go to the cities of GBA to study, find employment and start a business. I think this has established the direction and goals for the coordinated development of the "9+2" GBA cities. The question at issue is how the SAR Government should collaborate, including injecting more resources and joining hands with Hong Kong's industrial, commercial and professional sectors to actively negotiate with the relevant Mainland parties, so as to leverage the complementary advantages and maximize the benefits of the coordinated development.

President, Hong Kong is having a very difficult time now. The external economic environment is full of all kinds of uncertainties; the local epidemic situation fluctuates, various sectors and people from all walks of life are hard hit. The Financial Secretary once again proposed a budget with a deficit of $100 billion and continued to introduce counter-cyclical measures, but how can he strike a proper balance between effectively relieving people's hardship and making preparations to stimulate the economy? Despite criticisms of the details of the Budget, we should not ignore the most important message: Hong Kong people should work together, and demonstrate our usual fighting spirit to revitalize the economy and create wealth.

Following the commencement of the COVID-19 vaccination programme, BPA very much hopes that the SAR Government can expeditiously appeal to the Central Government for allowing Hong Kong people who have been vaccinated 5048 LEGISLATIVE COUNCIL ― 21 April 2021 to cross the border without undergoing compulsory quarantine; restoring economic exchanges between Guangdong, Hong Kong and Macao, and then subsequently restoring economic and trade activities and people flow between Hong Kong and the rest of the world. Only by injecting the weak local economy with running water can we improve the economy and people's livelihood. This is the way to tackle the problem at root. It is believed that the reasonable expectation of the general public for the Budget is: "Industries awaiting revitalization are desperate for relief, let's prepare for the rainy days and overcome the epidemic". (The buzzer sounded)

PRESIDENT (in Cantonese): Ir Dr LO Wai-kwok, please stop speaking.

MR CHRISTOPHER CHEUNG (in Cantonese): President, compiling the Budget has never been an easy task. The Financial Secretary ("FS") not only has to keep expenditures within the limits of revenues and make good use of the resources available, but also has to take into account the business environment of various trades and industries and allocate limited resources to people from different strata of society. FS has created more opportunities for Hong Kong, and I think his performance in the past few years has won the recognition of the public.

On the financial front, FS has also proposed various new development opportunities to facilitate the rapid development of Hong Kong's financial market. However, his proposal to raise the rate of stamp duty on stock transfers ("Stamp Duty") this year has seriously disappointed the industry, including me, with which I am afraid I cannot agree. This time, I think FS does not have enough understanding of the business environment of small and medium securities dealers. Increasing Stamp Duty will not only drive away small investors, but will also smash the "rice bowls" of small and medium enterprises ("SMEs") and weaken the competitiveness of Hong Kong's stock market. Worse still, it will substantially dampen the desire of enterprises to seek listing in Hong Kong. Here are some of my views on Stamp Duty.

Stamp Duty has always been a relatively stable source of revenue for the Hong Kong Government. Within the five years from 2015 to 2020, the average annual Stamp Duty revenue ranged from $23.6 billion to $36.9 billion, with average annual revenue of $32 billion. Before the four exchanges were unified LEGISLATIVE COUNCIL ― 21 April 2021 5049 in 1986, both buyers and sellers were required to pay 0.4% Stamp Duty; with continuous economic development, the transaction volume gradually increased and the rate of Stamp Duty had been reduced three times to 0.15% before the reunification. After the reunification, a large number of state-owned enterprises sought listing in Hong Kong and transaction was brisk. The Stamp Duty was further reduced from 0.15% (each side) to 0.1% (each side). I witnessed the development of the Hong Kong stock market in half a century. There were only small local exchanges in Hong Kong before the four exchanges were unified, but Hong Kong has now become an international financial centre. It can be seen that reducing transaction costs to attract foreign investment is one of the important factors contributing to the development of our economy and the securities market.

President, when FS announced the proposed increase in Stamp Duty, he mentioned that investors were not only concerned about the transaction costs, and the increase in stamp duty would only affect high-frequency trading but have minor impact on general investors. As a business operator in the industry, I am well aware that investors do attach great importance to transaction costs, especially when there are a group of retail investors engaging in day-trading in the market. These small investors engage in day-trading with a few thousand dollars or tens of thousands of dollars, only hoping to earn a few hundred dollars to help pay for their living expenses. Yet, after the increase in Stamp Duty, they will have to pay dozens of dollars more for each transaction, which will greatly dampen their desire to invest. In addition, as most of the clients of securities dealers are retail investors, reduced trading by retail investors will deal a direct blow to the securities dealers. Talking about the business environment, securities dealers are no competition for large securities dealers or banks in respect of IPO (i.e. Initial Public Offering). They are also subject to the various limitations imposed by the Securities and Futures Commission in margin trading, and have to invest large amount of money each year to update their information system. The increase in Stamp Duty will inevitably deter small investors from engaging in trading, thereby putting a heavier burden on many securities dealers.

Regarding the present decision to increase Stamp Duty, FS said that he had fully considered the market environment and opined that we have a good financial infrastructure and regulatory system; coupled with strong capital liquidity, he thus believed that the increase in stamp duty would not cripple the competitiveness of the international financial centre. I would like to point out that, in the face of unreasonable suppression of the United States ("US") and 5050 LEGISLATIVE COUNCIL ― 21 April 2021 fierce competition from the nearby markets, if Hong Kong wants to maintain its international competitiveness, it must reduce transaction costs in addition to maintaining a simple tax system and low tax rates. For example, US recently lowered its stock transaction levy further to maintain the competitiveness of its stock market. At present, there is 0.1% stamp duty (each side) for stock transactions in Hong Kong, which is the highest among many mature stock markets around us; if Stamp Duty is increased further, this will considerably undermine Hong Kong's status as an international financial centre.

Some people may think that the securities industry should have promising prospects as the Hong Kong stock market is booming and technology enterprises are coming to Hong Kong for secondary listings one after another. The fact is, however, there is no change in the structure of the Hong Kong stock market, which is dominated by foreign investments. The transaction volume of the market mainly comes from 200 to 300 stocks with the highest market values, whereas the small and medium listed companies have relatively lower turnover and their market liquidity has shrunk substantially. The market is polarized with the strong getting stronger and the weak becoming weaker.

While the increase in Stamp Duty may not have much impact on the large securities dealers as they can make use of hedging products that are free from Stamp Duty, the market liquidity and operation of the small and medium listed companies and small and medium securities dealers will further deteriorate. Worse still, given that most small investors like to invest in penny stocks, an increase in Stamp Duty will further dampen their desire to engage in penny stock trading. In the long run, the ability of SMEs to raise funds in Hong Kong will be seriously undermined and it is likely that small investors will ultimately be forced to engage in the trading of derivative products that are Stamp Duty free, including warrants, Callable Bull/Bear Contracts, etc. This will increase their investment risks, and have an adverse effect on the long-term development of the Hong Kong stock market.

I would like to stress that the industry understands that the Government is facing budgetary constraints, but if Stamp Duty is increased to generate more government revenues, it is tantamount to killing the goose that lays golden eggs. Instead, we have to change our mindset and reduce Stamp Duty to stimulate transaction. By "making a bigger pie", more companies will consider regarding Hong Kong as their most preferred place for listing and more funds will be attracted to Hong Kong. This is a more effective way to increase government LEGISLATIVE COUNCIL ― 21 April 2021 5051 revenues. Therefore, I have proposed an amendment to the Revenue (Stamp Duty) Bill 2021. It is hoped that by adding a sunset clause to limit the duration of the proposed increase to one year, Stamp Duty will be restored to its original level when both the economy and government revenues return to normal one year later. As for the relevant amendment, I will bring it up for discussion at the Bills Committee later. Also, I will consider proposing amendments to add unilateral tax increases and postpone the date of implementation of the increase in Stamp Duty.

Leaving aside the increase in Stamp Duty, this pandemic-oriented Budget has taken into account the interests of various sectors of society. In particular, in the past year, the Government provided subsidies to different industries to help them tide over the difficult time arising from the epidemic. In the face of budgetary constraints, FS still proposes to issue consumption vouchers with a total value of $5,000 to each eligible person aged 18 or above, so as to relieve the financial pressure of members of the public and help the retail and catering industries. This is worth commendation indeed. Nonetheless, I also hope that the Government can focus more on those who need assistance, e.g. reducing restrictions so that the elderly persons can use the $5,000 vouchers in a worry-free manner. For the tourism and catering industries, especially those hardest hit by the absence of visitor arrivals, the Government should provide appropriate assistance to meet their urgent needs.

President, while I support the specific fiscal policies proposed in the Budget, I have a resolute stance on the increase in stamp duty and will certainly oppose it all the way. Since the increase in Stamp Duty is independently handled by the Bills Committee, I will abstain from voting on the Budget. I so submit.

MR LAU KWOK-FAN (in Cantonese): President, I will speak on development issues on behalf of DAB. As in the past, the Budget, including the Budget Speech of the Financial Secretary ("FS") and various proposals, has not placed any emphasis on policies related to development. This is why there was not much mention of land supply in the previous budget speeches. However, being the Chairman of the Steering Committee on Land Supply ("the Steering Committee"), FS is the top decision maker within the government structure in land matters. Also, in the 2019-2020 Budget Speech, FS particularly stressed that the Steering Committee would be restructured, and highlighted that he would "strengthen the coordination of land supply. Priority will be accorded to a 5052 LEGISLATIVE COUNCIL ― 21 April 2021 number of strategic issues. These included using a vision-driven and forward-looking approach in realizing our vision, reassessing our land demand and setting the target of land reserve, and adopting an infrastructure-led and capacity building mindset in planning strategic transport infrastructure." Therefore, instead of repeatedly accounting for the work of the Development Bureau ("DEVB") in the Budget, FS should review and elaborate the work of the Steering Committee, for instance, stating the progress of building up land reserve and how he would adopt "an infrastructure-led and capacity building mindset", etc. I trust that this will be more meaningful.

Let us look back at the Budget, which has mentioned one proposal of the 2020 Policy Address, that is, setting up the Development Projects Facilitation Office ("the Office") in DEVB to facilitate the processing of planning, lease modification and building plan applications, etc. for private residential development projects with a yield of 500 flats or more by enhancing coordination among the departments involved. While the extent to which the proposal can boost private housing supply is still subject to the test of time, the setting up of the Office should be a good attempt. It is hoped that this is the right direction and can address the problems of complicated processes, repeated applications and red tape steeple chase―the whereabouts of documents are unknown after going here and there―during the development approval process. According to the Government's reply, the Office is working on 50 projects, with the total number of flats involved probably reaching 40 000. Based on this figure, 40 000 flats is equivalent to the total supply of first-hand residential properties in three years. The performance of the Office thus plays a decisive role in the future supply of first-hand residential properties.

However, as everyone can see, the Office only has an establishment of 10. The Office is comprised of interdisciplinary and experienced staff within DEVB, but can 10 staff cope with the work of 50 projects? At the same time, the Office also needs to take up the role as the Land Sharing Office to oversee the Land Sharing Pilot Scheme and provide one-stop advisory and facilitation services on the applications of the land sharing projects. While the Land Sharing Pilot Scheme has the same nature as the rezoning of private lands, both the Office and the Land Sharing Pilot Scheme are after all new proposals. If a shortage of manpower has prompted the staff to focus only on certain work while neglecting other work, thereby affecting the implementation of either or both of the proposals, it may give counter-productive effect. For this reason, I hope that FS will conduct a review of the adequacy of manpower.

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On the other hand, I certainly have expectation of the Office. Apart from performing the two roles of promoting private housing supply, the Office has another role of referring policy or institutional issues involving the approval process to the Steering Group on Streamlining Development Control for further review, with a view to addressing problems impeding development approvals at the policy or institutional level. Therefore, unless these two offices were established by DEVB to merely respond to the criticisms or "cook with a limited amount of rice"―but I do not believe this is the case―otherwise, the authorities should render full support to the work of these two offices and deploy manpower to provide support in the light of the workload. As Members may be aware, we have recently expressed great reservation about the Government's requests to substantially increase manpower. However, given the importance of the purpose of establishment and nature of these two offices, I encourage the Government to boldly review the adequacy of manpower; and in case it is inadequate, sufficient manpower should be provided by all means.

President, I believe the most difficult and time-consuming procedures of the development approval process are town planning and land premium payment. Town planning process is the statutory consultation and approval process as stipulated in the prevailing Town Planning Ordinance. In 2003, the authorities amended the relevant ordinances to streamline the approval process and undertook to carry out another phase of amendments, but the idea fizzled out in the end. In fact, the current town planning process has been criticized for many years for its lengthy process in making statutory plans and vetting planning applications. Earlier on, I have requested the Legislative Council Secretariat to conduct studies and found that the Town Planning Board ("TPB") decisions on plan-making and planning applications quite often are deferrals. For instance, TPB deferred decision on 37% to 58% of cases of amendment of plans during 2012-2017; the actual time required in plan-making in many cases could be as long as 17 months; the applications on some larger Comprehensive Development Area sites could even take over 20 years. I surely understand that turning "primitive land" into "spade-ready sites" is a complicated process and town planning is not the only issue, but since DEVB is determined to streamline the development control procedures, it should not confine the work to itself. Most importantly, the Town Planning Ordinance has to be reviewed to explore the possibility of further reducing the time required for making statutory plans and vetting planning applications.

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Apart from town planning, I just mentioned that the payment of land premium is another very time-consuming task. According to the past data, from October 2014 to September 2018, the time required by the developers and the Lands Department in reaching a consensus over land premium could be as long as eight years, with an average of 1.5 years. For the more divergent cases, the negotiation might take as long as four years before a consensus and an agreement could be reached. Frankly speaking, sometimes it is not necessary for a building to take four years from piling to completion, so it is indeed very time-consuming for the negotiation of land premium to take four years. Of course, I also understand that the premium involves a huge amount of money and it is very normal for both sides to bargain. From the Government's perspective, if the premium is set too low, it is susceptible to criticisms of transferring benefits; if the premium is set too high, it may not be possible to reach a consensus, thereby causing a delay in the supply of private housing. As a result, property prices may be pushed up instead, which will in turn drive up the valuation when negotiation of premium is to be conducted again next time. This will create a vicious cycle where no agreement can be reached despite repeated negotiations.

In relation to the problem of land premium payment, several breakthrough proposals have been put forward in this Budget. As mentioned in paragraph 136 of the Budget Speech, the Lands Department will charge land premium at "standard rates" to encourage redevelopment of industrial buildings. Although the relevant "standard rates" will not replace the rights of title owners in negotiating land premium in accordance with the existing mechanism, it is believed that with the "standard rates", the industry can speed up the bargaining process and increase the likelihood of reaching an agreement. In fact, Singapore has also adopted a similar approach. Starting from 2000, Singapore has implemented a differential premium system to deal with applications for change of land use or development density. Under the system, the actual amount of land premium for each development project will be calculated and determined based on the per square metre development cost, the gross floor area, the rate of lease value in permanent value, etc. of the completed and proposed projects. The premium will be clearly set out. Of course, overseas experiences are not necessarily applicable to Hong Kong. However, as land premium for the redevelopment of industrial buildings can be determined using "standard rates", can we draw reference from this approach in the case of conversion of agricultural land into residential land? Can we borrow overseas experiences? I hope that FS and the Secretary for Development can give consideration in this LEGISLATIVE COUNCIL ― 21 April 2021 5055 regard. In conclusion, we expect that under the leadership of FS, the procedures of land development and supply can be streamlined so as to resolve the housing problem.

President, I so submit. Thank you.

MR CHAN KIN-POR (in Cantonese): President, after the successive blows from "black-clad violence" and the pandemic, Hong Kong suffered a drastic economic decline and has to spend over $300 billion for disaster relief. This has put considerable pressure on public finance. This year, under such adverse circumstances, the Budget still manages to "hand out candies", alleviate poverty, assist the small and medium enterprises and undertake not to reduce livelihood-related spending. Moreover, it even puts forth the proposals for the electronic consumption voucher of $5,000 and the revival of the economy in the aftermath of the pandemic, such that Hong Kong is properly prepared to resume prosperity. In all fairness, this is quite a good Budget indeed.

At present, the fiscal reserves of Hong Kong are only $902.7 billion. While the deficit is expected to stand at $200-odd billion in 2021, it will still be $100 billion in 2021-2022. Moreover, there will also be deficits in the next four years. This is worrisome. In fact, the pandemic has rebounded in many places around the world. If the world economy cannot get back on the right track, Hong Kong will also be affected. Therefore, the Government should by no means take the matter lightly. Instead, it should proactively prepare proposals for reviving the economy. Also, I do not want fiscal deficit to become Hong Kong's new normal.

Hong Kong has to get rid of the deficit and set out afresh for development. Hence, the Budget proposes to revive the economy in the aftermath of the pandemic and the specific proposals include developing digital economy, issuing consumption vouchers and supporting tourism as well as large-scale publicity and promotional campaign both at home and abroad. All these are sound ideas targeting at Hong Kong's present situation. I support all the proposals and hope that they, the issuance of consumption vouchers in particular, can be implemented as soon as possible. After all, the consumption vouchers of $5,000 are the most useful to the general public. I hope that the Government can take views from different parties, act swiftly and efficiently so that not only members of the public can benefit earlier, but can also achieve the purpose of stimulating the market.

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In the long run, the Budget suggests that Hong Kong can participate more proactively in the country's "dual circulation" strategy, so as to enhance Hong Kong's competitiveness as an international financial centre. The Financial Services and the Treasury Bureau ("FSTB"), together with the Hong Kong Monetary Authority, the Securities and Futures Commission and the Insurance Authority ("IA"), has set up a joint working group to explore how Hong Kong can complement the financial development of our country and secure the Central Authorities' support. I am convinced that through directly participating in the country's financial activities, Hong Kong can definitely expand its financial market, develop broader market dimensions, and also spur the development of different industries in Hong Kong. This will do all good but no harm to Hong Kong. The insurance industry is happy to see this happen, and will render its support in full strength.

President, I understand that no one wants a tax rise. However, at present, in the face of a serious fiscal deficit and the need to keep looking after people's livelihood, the option of increasing the rates of certain tax items with smaller livelihood impact is actually the last resort when there is no other choice. I hope the Government can communicate with and explain to the industry, and provide assistance in its development and restructuring. Actually, in the face of present economic hardship, all walks of society should tide over the difficult times together. However, I also hope that when the hardship is over, the Government will consider what can be done for all trades and professions to help them revitalize after the pandemic.

The current pandemic has brought heightened awareness to hygiene, and more people are willing to lead a healthy life. As proven by the facts, healthy living can reduce the morbidity rate. Previously, whenever there was a surge of influenza, hospitals would inevitably be overcrowded. However, the situation has been greatly improved during the current pandemic. Besides, as told by some medical practitioners whom I know well, the number of people seeking medical consultation reduced significantly in the previous year. Therefore, I did advise the Financial Secretary to learn from this experience and encourage members of the public to keep leading a healthy life. In the long run, this can achieve the dual objectives of significantly reducing medical expenses and enhancing the quality of life of people in their senior age.

I am very glad that the Budget has put forward measures such as the plan for sports and recreational facilities, the plan for upgrading football pitches and enhancement of facilities in country parks, so that people can get more involved LEGISLATIVE COUNCIL ― 21 April 2021 5057 in sports and hiking. In fact, many people are fond of going hiking now and I hope that their enthusiasm will not last for just a while. I believe everyone is already fully aware of the importance of healthiness, so the Government should keep vigorously promoting healthy living.

President, up next, I would like to focus my speech on issues relating to the insurance industry. Following the outbreak of the pandemic, Mainland customers cannot come to Hong Kong to take out insurance due to the closure of the boundary. This has a huge impact on the insurance industry. In fact, given the deep economic ties between Hong Kong and the Mainland, the present state of de facto closure of the boundary has a bearing on various trades and professions. Resumption of cross-boundary activities is of paramount importance to the economy. Hence, the industry hopes so much that the Government can do a good job of epidemic prevention to turn Hong Kong into a low-risk place and resume its economic exchange with the Mainland as soon as possible.

Moreover, the insurance industry also hopes that it can make its way into the Greater Bay Area ("GBA") soon and explore the gigantic market in the Mainland. The Chief Executive announced in her Policy Address last year that the proposal on after-sales service centres ("service centres") for Hong Kong insurance in GBA was supported by the Mainland Government, and the industry has been waiting for the announcement of further details since then. Regrettably, owing to the pandemic, negotiations were inevitably affected. Nevertheless, there is finally good news lately. In response to my written question, the Secretary for Financial Services and the Treasury pointed out that regulatory bodies of the insurance industries in Guangdong, Hong Kong, Macao and Shenzhen met in January for an in-depth discussion on the proposals relating to the service centres and the "unilateral recognition" for Hong Kong vehicles, and hopefully progress would be made within this year. I do not merely hope that progress will be made on the proposals, but it is also hoped that they can be implemented within this year to enable the industry to formally take forward their businesses in GBA when the pandemic has subsided. I hope that the departments concerned can proceed as expeditiously as possible.

In addition to the service centres, the industry has also been striving for the sale of insurance products in the Mainland. This involves even more complex issues concerning the regulatory regimes and capital. In response to my question, FSTB also provided some positive information. It replied that with the 5058 LEGISLATIVE COUNCIL ― 21 April 2021 upcoming launch of the cross-boundary Wealth Management Connect, the Government would take reference of relevant experience and further explore with Mainland authorities the proposal of facilitating cross-boundary sale of Hong Kong insurance products. Although there may be an extensive negotiation, this is a start after all. Both Hong Kong and the Mainland have included this item to their working schedules, and stated expressly that the governments will put it into practice. The insurance industry hopes the authorities can expeditiously implement it because it is not only of paramount importance to the industry, but can also provide residents of Hong Kong and Mainland with more channels of financial management, thereby creating an all-win situation. I hope that the authorities will strive to create more "win-win" opportunities.

In order to push forward the development of international insurance business, a lot has been done by the Government, which include promoting marine insurance and specialty insurance, etc. The insurance industry welcomes them. This Budget proposes a two-year Pilot Insurance-linked Securities Grant Scheme to attract international insurance organizations to issue insurance-linked securities in Hong Kong, which is very good. This pilot scheme will provide subsidies to cover the relevant upfront costs of insurance organizations, e.g. fees provided to legal advisers and auditors, subject to a cap of $12 million. The eligibility criteria of the pilot scheme are that the issuance size of the insurance-linked securities is not less than $250 million and the issuer is required to engage Hong Kong service providers. I believe the pilot scheme can attract organizations to come and invest in Hong Kong, which will be of very great help to the insurance industry, financial industry and related professions. Furthermore, if more international investors can be attracted to Hong Kong, it can also help us maintain our internationality and this is good in an overall sense.

Lastly, I would like to talk about issues related to the development of insurance technology. The current pandemic has dealt a severe blow to the insurance industry. Not only that Mainland customers are unable to come and take out insurance in Hong Kong; against the background that sales in the insurance industry are traditionally conducted with a face-to-face approach, sales are difficult to come by when people avoid contact with each other amidst the pandemic. In the face of operational difficulties, the industry has worked very hard to turn crises into chances by striving to develop remote sales platforms. Moreover, we received full assistance from IA, such that it approved some deliberate products of which sales are conducted via means that cannot only protect customers but also give business practicability to insurance companies. LEGISLATIVE COUNCIL ― 21 April 2021 5059

Such products include health insurance plans and deferred annuities. They have received an excellent market response. The experience awakened the industry to the fact that sales practices must keep pace with the times and adopt more novel technologies. Given that the proposal involves many legal and compliance issues, support from regulatory bodies is very important for they cannot be dealt with by the industry alone. I hope that the Government, FSTB and IA can keep working hard to take forward the task as it is beneficial to Hong Kong as a whole. Thank you, President.

MR JIMMY NG (in Cantonese): President, Hong Kong's economic development has been hard hit and the economy is in a frozen state. As a result, the fiscal revenue of the SAR Government has dropped sharply. In the 2020-2021 financial year, the Government has recorded the largest ever deficit of over $200 billion. The Financial Secretary ("FS") projected that Hong Kong would enter a cycle of budget deficits. Meanwhile, the fiscal reserves have been greatly reduced to the equivalent of 13 months of government expenditure, arousing concern over the fiscal space available for FS to revive the pandemic-stricken economy while ensuring the health of public finances.

First of all, I have to point out that this year's Budget has unprecedentedly proposed several tax increases, including raising the stamp duty on stock transfers from 0.1% to 0.13%, increasing the rate of each tax band for the first registration tax rates for private cars by 15%, and increasing licence fees by 30%. These tax increase measures have taken the industry by surprise. While the Budget has only raised traditional taxes without introducing any new taxes, the Government has already set a precedent for tax increases anyway. The market is inevitably worried that more tax increase measures would follow next year. As for the new trend of electronic commerce and consumption, which has attracted considerable attention in recent years, the Budget has proposed a package of measures to enable various sectors and industries to accelerate digital transformation. While the business sector welcomes the Government's emphasis on digital economy, the Government should definitely not bring the business practices of providing digital services into the traditional tax net too lightly. At present, the Government should focus on studying the criteria for determining the sources of profits of online businesses of various trades and industries, and providing a clear and timely taxation guidelines for the development of digital economy in Hong Kong as early as possible.

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In view of the current economic situation and fiscal deficit, FS has racked his brain in a bid to generate new sources of revenue and cut expenditure. However, as we all know, this will be extremely difficult. On the one hand, it would be highly challenging to reduce expenditure out of political considerations. If the relief measure of handing out sweeteners is scaled down slightly, FS will come under criticism from various sectors of the community. On the other hand, while generating new sources of revenue appears to be a feasible option, if revenue is increased only by means of raising taxes, it will bring harm to the industrial and commercial sectors and tremendously and irreversibly change the entire fiscal and tax regime. As we all know, Hong Kong has been pursuing a simple and low tax policy. Our tax regime has always been the core competitiveness which we take pride in, and has been highly praised by foreign enterprises and investors. By raising taxes casually, the Government is obviously backtracking. Contrary to the major trend of tax reduction in countries around the world, the Government's move will actually do a disservice to the business environment of Hong Kong.

President, as a trade representative from the Chinese Manufacturers' Association of Hong Kong ("CMA"), I noticed that the term "re-industrialization" has appeared five times in this year's Budget Speech. According to paragraph 111 of the Speech, the Re-industrialisation Funding Scheme, which was launched in July last year, has received 12 applications so far. It does not appear quite so satisfactory. Apart from smart production and high-end manufacturing, the Government should not overlook the contribution of traditional industries to our economy. The industrial sector has been reminding the Government that while re-industrialization as well as innovation and technology are largely intertwined, they are simply not the same. To our regret, the Budget has failed to further propose related measures to support the local industries and Hong Kong-owned enterprises in the Pearl River Delta.

Given that "food, beverage and tobacco manufacturing" is Hong Kong's leading light manufacturing industry, CMA actually suggested back in 2016 that the Government should follow the example of Korea by setting up a food industrial park to further strengthen the image building of the "Made in Hong Kong" brand, thereby enhancing our competitiveness. Many years on, the Government has still failed to attach due importance to traditional industries in its re-industrialization policy. A research team from City University of Hong Kong recently conducted a survey on the allocation of the Innovation and Technology Fund among various industries. As of October 2019, while "electrical, LEGISLATIVE COUNCIL ― 21 April 2021 5061 electronic and optical products" accounted for only 3.9% of the manufacturing sector, electrical and electronics-related industries received the largest share of funding at 31.56%. In contrast, "food, beverage and tobacco manufacturing", which accounted for more than 30% of the manufacturing sector, the funds received were too low to be listed separately.

Quite a few manufacturers, who have been operating in the manufacturing industry for decades, have established a strong industrial foundation. Technological advancement and market changes have made it necessary for the traditional industries to restructure and upgrade, thereby fostering the development of upstream, midstream and downstream industries, such as scientific research, processing, product design and market research, and creating a large number of related job opportunities. In view of that, it is necessary for the Government to take forward re-industrialization. If the Government fails to fully grasp the predicament faced by the traditional manufacturing industry in development, it will not be able to assist the industry in upgrading its production capacity through targeted industrial policies. Eventually, "Made in Hong Kong" products will become fewer in number, which is not conducive to exploring domestic and export markets.

As mentioned in paragraphs 100 and 101 of the Budget Speech, the current-term Government has introduced enhanced tax deduction for research and development ("R&D") expenditure, thereby increasing investments in local R&D. However, in 2019, R&D expenditure only accounted for 0.92% of GDP, lagging far behind the Government's target of reaching 1.5% by 2022. In the Greater Bay Area, Hong Kong's ranking is only higher than Macao, but lags substantially behind Shenzhen where the R&D expenditure accounted for 4.93% of GDP. Hence, the Government should catch up expeditiously by investing more to boost the growth of private R&D expenditures. In fact, the Business and Professionals Alliance for Hong Kong has also proposed to raise the proportion of R&D expenditure to 2.5% of GDP within 10 years, and suggested the Government to set corresponding key performance indicators, such as annual breakdown of funding sources and R&D subjects, so as to systematically assess the effectiveness of the measures in phases.

Lastly, I would like to talk about the electric vehicle ("EV") policy. In the Budget, FS proposed ceasing the new registration of fuel-propelled private cars in 2035 or earlier. Looking at the EV practices, timetables and roadmaps of other countries around the world, they can be broadly classified under three categories, 5062 LEGISLATIVE COUNCIL ― 21 April 2021 namely the phase-out of fuel-propelled vehicles, the adoption rate of EVs and the ratio of EVs in the sale of vehicles. Take the Mainland as an example. Last year, the State Council issued the Development Plan for New Energy Vehicle Industry (2021-2035), setting out the target of raising the ratio of new energy vehicles ("NEVs") in new vehicles sale to 20% by 2025, and making pure EVs the mainstream new vehicles in the market by 2035. Let us look again at the example of the United States ("US"), its policy requires all federal, state and local fleets, including more than 220 000 US Postal Services vehicles, to be converted to zero-emission vehicles. It is the general view that a timetable for a partial phase-out of fuel-propelled vehicles fits Hong Kong better. The lack of local vehicle manufacturers in Hong Kong makes it difficult to supply a large number of EVs to the market in a short period of time. Drawing up a timetable for phasing out fuel-propelled vehicles will give manufacturers, dealers and motorists enough time to cope with policy changes.

While the development of EVs is actually an excellent vision, there are currently only 3 351 EV charging spaces across the territory, but the number of EVs is about 18 000. In other words, six EVs have to share one charging space on average. As planned in the roadmap, 155 000 charging spaces will be provided across Hong Kong by 2025, including 5 000 charging spaces in government car parks as well as 150 000 spaces in private residential and commercial buildings. Simply looking at the ratio, one could not help but wonder how the objective of providing charging spaces in private residential and commercial buildings can be achieved. All in all, this year's Budget has adopted a relatively conservative stance and there is still room for stepping up the relief efforts. That being said, the Budget demonstrated a bold spirit, which is better than doing nothing.

President, with these remarks, I support the passage of the Appropriation Bill 2021.

MR STEVEN HO (in Cantonese): President, this Budget was delivered exactly one year after the outbreak of the "black-clad violence" in 2019 and the epidemic in 2020. As Jimmy has just said, the Budget is quite conservative. Although we agree with this direction and realize that the HKSAR Government has, to a certain extent, put in a lot of resources to fight against the epidemic, other livelihood work should not be neglected. Therefore, if Hong Kong encounters any crisis again in the future, I hope that the SAR Government will exert greater LEGISLATIVE COUNCIL ― 21 April 2021 5063 efforts in conducting studies. Since the SAR Government has already invested hundreds of billions of dollars, why not invest an additional $1 million or $2 million or even $10 million or $20 million to guard against any impact? This is tantamount to the taking out of insurance by members of the public.

Recently, some major events occurred in society, e.g. on 13 April, the Japanese Government asked the Tokyo Electric Power Company to release nuclear wastewater into the sea, and the relevant plan will be carried out two years later. I bring up this issue because some people have protested against this. Some of my fishermen friends came to the Legislative Council to stage petition and demonstration, questioning why the SAR Government did not follow up on the matter. To a certain extent, the spokesman of the Central Authorities has already expressed resolute opposition against this plan, but the SAR Government had not made any statement until 15 April. As a matter of fact, in times when people's hearts are divided―poverty has rendered people's hearts disoriented, otherwise the Ming Dynasty would not have collapsed and LI Zicheng would not have attacked Beijing―they are subject to immense pressure. All the Government has to do is to set the public's mind at ease. I hope that Secretary Prof Sophia CHAN will be highly concerned about this matter and echo the Central Government in the international arena by opposing the unnecessary discharge of nuclear wastewater.

Some people said openly that Japan's Deputy Prime Minister Taro ASO once claimed that the nuclear wastewater was safe to drink. His remarks have been widely circulated among the public, and some people even poured nuclear wastewater into the mouth of ASO's doll during their demonstration. They queried why ASO didn't let Japanese people drink the nuclear wastewater if it is safe to drink, or bottle the nuclear wastewater and sell it to the United States ("US") given the latter's support for Japan. When there are such voices in society, the SAR Government must make prompt response. It was only two or three days later that the SAR Government passively expressed concern, followed by the Controller of Centre for Food Safety Dr TSUI―he has actually done nothing wrong―saying that the issue would be dealt with when more data was collected. But what will the SAR Government do if the data collected showed that there is a problem? Will it continue to allow Japan to release nuclear wastewater? Or will it challenge the statement made by the spokesman of the Central Authorities to oppose against Japan's move before any data is available? Therefore, political judgment can either set people's mind at ease or cause confusion, and may impose great pressure on future administration.

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This issue was not discussed in this Budget because it arose after the Budget was announced. Can provisions be made next year for actions to be taken in response to Japan's release of nuclear wastewater two years later? Will provisions be made for the setting up of study group or expert panel to monitor the situation in Japan? Will the SAR Government create supernumerary posts to monitor the release of nuclear wastewater? If Japan does not release nuclear wastewater two years later, the relevant posts can be abolished by then. And, if something does happen, the contingency plan formulated in these two years can be implemented to deal with the situation and guard against any problem.

Many friends from the business sector present are now at the meeting, including the Liberal Party's Mr Tommy CHEUNG from the catering sector. He is probably worried that when Japan releases nuclear wastewater two years later, the SAR Government may invoke the existing Food Safety Ordinance to ban the import of food tested to be problematic right away. What should those Japanese restaurants do then? Hong Kong has been the number one exporter of Japanese food for 16 years in a row. It is not six months or one year, but for 16 years in a row. US has a population of hundreds of millions of people, but its import of Japanese food is no match for Hong Kong, which only has 7 million people. The impact on us would thus be very significant. If the import of Japanese food is called to a halt all of a sudden, many Japanese restaurants will then close down. So will the stores selling Japanese food. Employees will lose their jobs. The business sector may even request the Government to, in response to the unemployment situation, set up an "anti-nuclear water fund" to be provided in three rounds. Therefore, the SAR Government is only required to input small amount of resources now, but it can, to a certain extent, mitigate the risks in this regard. In case the SAR Government really has to face such risks, it would dare to call on people to switch to food imported from other places. I dare not urge for a ban on the import of Japanese food now as no relevant data is available at the moment. However, as I said earlier on, I would like to ask Secretary Paul CHAN to put in resources so that Secretary Prof Sophia CHAN can set up an expert group to look into the possible scenarios and then call on members of the public to make adjustments. This is important.

The second part is about the agriculture and fisheries industries. At the last special Budget meeting, I had a heated debate with Financial Secretary ("FS") Paul CHAN. However, I did not have any ill intentions. I really didn't. I raised the issue of nuclear wastewater just now in the hope that the SAR LEGISLATIVE COUNCIL ― 21 April 2021 5065

Government will, during this period of time, take a strong and resolute stance to support the development of the industry and safeguard the food safety of Hong Kong.

With the implementation of "patriots administering Hong Kong", the risks of "black-clad violence" have been greatly reduced and we can now focus on people's livelihood. However, the SAR Government responded that a study should be conducted in the first place, which is not the right attitude for addressing livelihood issues. Over the years, the SAR Government has always given people an impression of bureaucracy. Whenever a problem arises, someone will attribute it to government bureaucracy. Although some of the SAR government officials tackle problems pragmatically, people inevitably still hold such an impression. Hence, there may be a need for politically appointed officials to enhance their sensitivity in this regard, and I hope that Secretary Paul CHAN will pay attention to this aspect.

In addition, as for the agriculture and fishery industries mentioned just now, they were rarely touched on, not only in this year's Budget, but also budgets of the past few years. Although no relevant measures have been formulated, political actions or expression of concern will be able to make people feel comfortable albeit no substantive improvement is made to people's living. Also, this will facilitate government administration. Simply put, the Government has not injected an additional $50 million or even $100 million into the Sustainable Fisheries Development Fund or the Sustainable Agriculture Development Fund ("SADF"), nor has it provided another grant capped at $30,000 under SADF as a policy to support farming equipment―this is actually a kind of enhancement fund for agricultural for the purchase of farming equipment. This sum of money can be used to install nets to stop suckling pigs―sorry, Secretary WONG Kam-sing, not suckling pigs but wild pigs―nets to stop wild pigs so as to reduce the loss of crops. The granting of $30,000 last time was just a one-off policy. Frankly speaking, what is the use of $30,000 for a gigantic farm? Investments in pig or chicken farms can be as high as tens of millions of dollars, right? Nonetheless, such grant of $30,000 can at least show that action has been taken by the SAR Government.

Just now some Members said that insufficient flour would certainly not be able to produce bread, and the process of changing land use from agricultural land to building land was too slow. Who in Hong Kong does not know that there is a shortfall in flat production in Hong Kong? I can see from the television that the 5066 LEGISLATIVE COUNCIL ― 21 April 2021

SAR Government has been incessantly highlighting the importance of reclamation to Hong Kong―FS was the Secretary for Development back then―and the contribution of reclamation to Hong Kong, in the hope of making all Hong Kong people believe land creation is of paramount importance. The question is: What is the slogan chanted at the moment or previously during the "black-clad violence" in society? It is the conflict between livelihood work and interests. The rezoning of agricultural land will definitely create conflict of interests, and there is no way the farmers can make a living under the old mechanism. In the past, the SAR Government would make compensation for the farmers to leave. Be they farmers or fishermen, the Government has actually bought their lifelong skills with money and there is no other ways they can make a living. I learnt that the SAR Government had acquired some pig farms when the legislation on livestock waste disposal was implemented. However, in just three years, those pig farmers were left with nothing either because they had spent all the money or due to investment failure. Having difficulties in working as employees, they will have to apply for CSSA when they have no money either because of spending or investment failure. Therefore, compensation is an unrealistic approach. The land rezoning policy actually aims at preserving the original production skills, and does not only target at the agriculture and fishery industries. Therefore, in respect of land resumption, can FS consider increasing the relevant provisions so that Secretary Michael WONG can give pragmatic consideration to the relocation of pig and chicken farms?

Some time ago, the Town Planning Board ("TPB") proposed the rezoning of Tai Tong and other areas. Since I had to attend a meeting in the Legislative Council, I was unable to deal with the matter and thus asked my assistant to write to TPB to express my views. In the letter, we pointed out that three pig farms and one chicken farm were affected by the proposal as they were not allowed to resume operation. Subsequently, someone stood out, not knowing if he was the secretary of TPB or whoever, and said that the SAR Government had introduced proper policies to deal with matters relating to these livestock farms. I was then told not to say anything more. I expressed views but TPB told me not to say anything more. My Policy Research Officer came back and told me that the SAR Government already had a predetermined stance. What else could we say? Therefore, I will not believe anything Secretary Michael WONG says in the Legislative Council. Nor do I believe his undertaking to look into the matter. Even TPB told me the same thing. I feel utterly confused now, just like the meme picture of Jacky CHAN.

LEGISLATIVE COUNCIL ― 21 April 2021 5067

I hope that the SAR Government will change its education and established mindset in order to address social conflicts. I hope that the SAR Government will understand while money has to be used, it should be spent appropriately. Instead of using bureaucratic approaches, the Government should try to set people's mind at ease or even buy their hearts. This may sound unpleasing to the ears, but there is a genuine need for the Government to win people's trust in order to achieve smooth administration, with a view to saving some (The buzzer sounded) … unnecessary troubles.

President, I so submit.

PRESIDENT (in Cantonese): Mr Steven HO, please stop speaking.

MR MICHAEL TIEN (in Cantonese): President, I believe this is the most difficult Budget ever written by the Financial Secretary ("FS") during his term of office, and I fully understand his difficulties. This year, it can be said that Hong Kong is facing both external and internal problems, with both distant and imminent threats surfacing at the same time. With regard to FS's Budget, I have both commendation and regret.

Let me start with the deficiencies. Due to the once-in-a-century pandemic, the economy has been partially halted and people from all walks of life have been affected. However, very strangely, the Government has abolished the relief measures that it had introduced in good times when it is time to lend a helping hand to people in need. Is this not conceptually contradictory?

Let me first talk about the middle class. The Roundtable proposed a 100% tax rebate with a ceiling of $20,000, which actually was the same level as that before the outbreak of the epidemic last year. It was, however, reduced to $10,000. In fact, in the case of Hong Kong, life of the middle class is not easy at all. Housing expenses account for an abnormally high proportion of the total living expenses, and I believe I do not need to elaborate on the pressure borne by them in making mortgage repayments and rent payments. Yet, they have not received any benefits from the Government. Can the Government provide certain tax-related support amid the pandemic? I believe FS should be aware that the middle class is not only the mainstay of Hong Kong society, but also the people to rely on to revitalize the economy after the pandemic. Hence, I do not agree to reduce the assistance to them.

5068 LEGISLATIVE COUNCIL ― 21 April 2021

After talking about the middle class, I would like to switch to the grass roots. The situation of the grass roots is more obvious than that of the middle class, and any storm in society will definitely affect them. I therefore propose to pay three months' rent for public housing tenants and offer "double pay" to CSSA recipients. Before the outbreak of the epidemic last year, there was also "double pay" for CSSA recipients and it is nothing new at all. The Government implemented all of these measures in the past, but it has either abolished them or introduced "fewer sweeteners" this year. This seems a bit unsympathetic at least in terms of perception.

When it comes to poor students, they face even bigger problems under the new learning model. While Internet access and hardware cost money, face masks and hand sanitizer which students need for going to school also cost money. Many of the expenses that we would hardly notice are big problems for poor students. Therefore, I propose to introduce the previous measure of providing a subsidy of $2,000 to the poor students―only $2,000―but it was again abolished this year. I would like to ask FS and the Secretary for Education to pay special attention to the fact that it is somehow deceitful to say that the learning environment of the past two years has no impact on the absorption of knowledge. They should think about, and pay more attention to, the inter-generational poverty caused by the digital divide in the long run. I have expressed the same view at the two sessions of the National People's Congress and the Chinese People's Political Consultative Conference, and the Mainland authorities of our country have expressed grave concern about this issue.

Many other Members have bombarded the authorities on the issue of the unemployed, which I do not need to further elaborate. I am personally very supportive of the Love Upgrading Special Scheme because the concepts of self-reliant and self-enhancement are very good. I propose to increase the number of places to 50 000, which do not have to be linked to the fiscal year. I suggest that the Government should keep the unemployment situation under review and increase the number of places as soon as possible.

After talking about the short-term measures of this year, I would like to talk about a long-term issue. I believe FS should be able to guess that it is tax reform, which I have been proposing year after year. Few years ago, the Treasury was "flooded" every year and we always had to consider how to "hand out candies" to make everyone happy. It was described as a "happy problem". However, there were unforeseen conditions. Two big waves came and exposed LEGISLATIVE COUNCIL ― 21 April 2021 5069 how fragile our system was. At that time, many people accused the Government of being a miser, but I disagreed. I agree with the idea of preparing for the rainy days, but unfortunately, FS has failed to identify a structural solution.

There is absolutely nothing new for Hong Kong's public finance to face up to challenges. As stated in the 2017 Budget, "from 1998 to 2004 when Hong Kong's economy was ensnared in difficulties during the Asian Financial Crisis and the I&T bubble burst, government revenue plunged far more sharply than that of GDP. We experienced five years of fiscal deficits, which depleted 40 per cent or over $180 billion of our fiscal reserves, leaving these at a level equivalent to … instead of 28 months of government expenditure." (End of quote)

Unfortunately, history is repeating itself today, but what have we done to prevent it? Structurally, I don't see any. When I made such a remark back then, people from the community, the legislature as well as the business and political sectors did not take the issue too seriously. This year, every one of us should think about it. Before and after the announcement of the Budget, many people were discussing about the tax reform. I often made use of a mandated database, which is a database of members of the public, to conduct public opinion surveys. This time, I asked about people's views on tax reform. I received more than 10 000 responses via SMS, and half of the respondents agreed to start exploring the introduction of new taxes. FS, frankly, I am a bit surprised because generally speaking, it is very difficult for members of the public to agree to the introduction of new taxes. Therefore, after this year's discussion, I hope FS will realize that this is the question he will have to respond to sooner or later.

Lastly, I would like to talk about the "main course" of this year's Budget, that is, consumption vouchers. I have made a bold proposal to the Government this year, and that is, giving out cash and consumption vouchers at the same time. I wonder if anyone considers this a populist move, but I have very good reasons for that. Recalling again the time when the Treasury was "flooded" three years ago, everyone demanded the Government to "hand out cash" but I opposed it. To "hand out cash" or not, depends on society's needs but not whether the Treasury is "flooded". If it is "flooded", the money should be used to invest for the future, such as setting up a fund to cover certain recurrent expenses. At times when there is financial pressure, the Government may use the fund's annual return to cover the additional recurrent expenses or for tax rebates. Everyone thought I was a freak back then. However, we hold that to "hand out cash" or not should depend on the society's needs rather than the Treasury itself. After 5070 LEGISLATIVE COUNCIL ― 21 April 2021 all, public finance takes long time to rationalize and cannot be dealt with on a yearly basis. As a result, the Government designed an extremely complicated proposal to hand out $4,000 on a sliding scale. The administrative costs were high and not many people had benefited from it. Even the political party that put forward the proposal blamed the Government. This is precisely populism.

At the end of the year before last, a huge wave came. The community was partially halted by the violent demonstrations. It was followed by another even bigger wave. Therefore, this year, I suggest that both cash and consumption vouchers should be handed out to help people tide over the difficulties. Many people can barely make ends meet and are having a tough time. The consumption vouchers can be used to stimulate the economy, and it is a way to tackle the problem at root. FS, in order for the latter to achieve the intended purpose, you also know that the best way is to issue the vouchers in one go. Also, the validity period must be short. However, after listening to our proposal, FS has done half of the job and will issue consumption vouchers only.

On the consumption vouchers, different approaches will produce different effects. The estimated economic stimulus resulting from the vouchers will have to depend on the proportion of daily consumption they represent. Initially, FS planned to disburse the vouchers in five instalments of $1,000 each. The face value is more or less the same as the subsidies for daily living, and is no different from "handing out cash", thus the economic stimulus will inevitably be limited. I trust that if the amount is $1,000 per month, majority of the people will not have the incentive to make extra spending. Therefore, I propose to disburse the vouchers in two instalments of $2,500 each, with a gap of two months in between. Only with this amount can we lure people to spend heavier, thereby producing the effect of revitalizing the Hong Kong economy. On the other hand, for the grass roots, disbursing the issuance of vouchers of $2,500 with a gap of two months will bring greater benefits to their daily lives. Therefore, in principle, I definitely support the issuance of consumption vouchers because it is my proposal, but I am afraid that the details may render it useless. In the end, my vote will depend on the number of phases the vouchers will be distributed. I think it would be best to issue them in one go, but the option of two phases is also acceptable to me. For other options, I need to think how I would vote.

President, I so submit.

LEGISLATIVE COUNCIL ― 21 April 2021 5071

MR CHAN CHUN-YING (in Cantonese): President, in response to the epidemic, the Government changed its miserly and penny-pinching image and opened the coffers last year, which is commendable. As a result, the fiscal deficit has reached a historic high of $257.6 billion. Before announcing the Budget, Financial Secretary ("FS") Paul CHAN dressed up as a chef to seek public views during the consultation period. However, since over 7 million people have countless different tastes, it is believed that the Budget can hardly satisfy the needs of everyone. Besides, there were strong public expectations for the Government to continue to "hand out candies". I believe some people did feel very disappointed after the announcement of the Budget.

This year's Budget once again forecasts a deficit of over a hundred billion dollars. Instead of continuing the long-standing practice of "handing out candies indiscriminately", FS has accepted Members' suggestions and put forward a wide variety of relief measures while endeavouring to maintain Hong Kong's competitiveness and consolidate our pillar industries. These efforts should definitely be acknowledged. Therefore, I support this Budget. In the following, I will first talk about some initiatives relating to the financial industry in the Budget.

President, the financial industry is one of the most competitive industries in Hong Kong. Over the past two decades, the actual annual increase in the value-added of the industry has averaged 6.8%, which doubles the growth rate of Hong Kong's Gross Domestic Product ("GDP"). In the past two years, Hong Kong's economy has been mired in a deep recession due to the "black-clad violence" incidents arising from the opposition to the proposed legislative amendments, the Sino-United States ("US") trade conflicts, US's threat of financial sanctions and the COVID-19 epidemic. However, our financial market has been operating normally and has demonstrated some resistance and resilience to the impacts, which once again shows the strengths Hong Kong has derived from developing the financial industry for a long time. Therefore, the Budget makes considerable mention of the ways to further reinforce and enhance Hong Kong's status as an international financial centre, and proposes various measures in a number of areas ranging from the development of the bond market and securities market to asset and wealth management.

First of all, on promoting the diversified development of the bond market, Hong Kong's bond market is currently the third largest in Asia ex‑Japan in terms of issuance in local currency. FS has announced in the Budget that he will lead 5072 LEGISLATIVE COUNCIL ― 21 April 2021 a steering group to formulate a roadmap for promoting the diversified development of Hong Kong's bond market and reinforcing its functions. He will also introduce measures in areas such as green bonds, mutual market access and retail bonds. In addition, in order to expand the issuance of green bonds, the Budget proposes to double the borrowing ceiling of the relevant programme to allow for issuance of green bonds totalling $175.5 billion within the next five years. This will give us more room for piloting the issuance of green bonds that involves more types of currencies, project types and issuance channels.

In the Budget, the Government has decided to consolidate the Pilot Bond Grant Scheme and the Green Bond Grant Scheme rolled out previously into a Green and Sustainable Finance Grant Scheme so as to lower the costs of issuance for eligible bond issuers. In fact, the Government successfully offered a 30-year tranche in December last year, which is the longest-tenor US dollar-denominated government bond in Asia. These are conducive to establishing Hong Kong's status as a green and sustainable finance hub in the region.

Since the launch of Northbound Trading of Bond Connect in 2017, the scale of transaction has been growing, whereas no definite timetable has been set for Southbound Trading. The Budget expressly proposes that Southbound Trading be targeted for launch within this year, which will provide more international and diversified bond investment options for Mainland investors while expanding the liquidity pool of the Hong Kong market correspondingly and bringing more demand for exchange rate and interest rate risk hedging. This will definitely further establish Hong Kong as an international risk management centre.

The Government has also proposed to issue $24 billion of Silver Bond and $15 billion of iBond, and lower the eligible age for subscribing Silver Bond to 60. It is believed that these measures will facilitate the development of the retail bond market while offering Hong Kong people another investment product with stable returns.

Secondly, on consolidating the leading advantages of the securities market, Hong Kong has been a world-leading fund-raising equity market for many years. In seven of the past 12 years, Hong Kong ranked among top three in the world in terms of Initial Public Offering funds raised. In 2018, the Hong Kong Exchanges and Clearing Limited ("HKEX") amended the Listing Rules to permit listings of biotech companies that do not meet the Main Board's financial LEGISLATIVE COUNCIL ― 21 April 2021 5073 eligibility criteria and permit listings of companies with weighted voting right structures. Currently, there have been 43 companies listed under this new regime in Hong Kong, including 10 China Concept Stock companies returning to Hong Kong for secondary listing. These companies have a combined market capitalization of over $11 trillion, accounting for 25% of the current total market capitalization in Hong Kong.

The Budget proposes that HKEX review the overall secondary listing regime, including whether Greater China companies with non-weighted voting rights structures have to be companies in the information and technology field in order to seek secondary listing in Hong Kong through the new concessionary route. I believe this measure can further attract listings or secondary listings of Mainland enterprises in Hong Kong, which is conducive to maintaining Hong Kong's position as a capital raising centre. With an aim of facilitating the expansion of Stock Connect's capacity, the Budget proposes to, among other things, reinforce mutual stock market access between Hong Kong and the Mainland, progressively include exchange traded fund (ETF) and other types of assets, and expand the scope of such investment options. I trust that these measures can continue to meet the demands of various kinds of investors in Hong Kong.

On seizing new opportunities in asset and wealth management, Hong Kong is currently the largest international asset management hub and international private wealth management centre in Asia, and second only to Switzerland in the world. In 2019, in the face of the dual challenges posed by the "black-clad violence" arising from the opposition to the proposed legislative amendments and the Sino-US trade conflicts, the asset and wealth management business of Hong Kong still recorded an increase of 20% to HK$28.7 trillion. Despite the epidemic, the number of asset management companies in Hong Kong increased by 3.9% to 1 878 last year.

Major central banks around the world have now lowered their policy interest rates and implemented new rounds of quantitative easing policies, leading to a substantial increase in the amount of global funds. Hong Kong should utilize its position as the largest asset and wealth management centre in Asia and the advantages of its mutual access with the Mainland to attract more fund inflows into Hong Kong. This Budget has introduced a number of supportive measures, including allowing foreign investment funds to re-domicile to Hong Kong, providing subsidies to cover the expenses paid to local professional service providers for open-ended fund companies set up in or re-domiciled to Hong Kong 5074 LEGISLATIVE COUNCIL ― 21 April 2021 in the coming three years, reviewing the relevant tax arrangements for family offices in Hong Kong, and encouraging the listing of more real estate investment trusts in Hong Kong. These three targeted measures are all aimed to expand the liquidity pool of the asset and wealth management industry in Hong Kong, and introduce more products that are eligible for investment. The development direction is pretty reasonable.

President, just now I have talked about how the Budget facilitates the development of the financial industry, but in fact, many other industries in Hong Kong, including the retail and catering industries, have been hit hard since 2019. The Government has taken Members' views on board in this Budget, and will issue electronic consumption vouchers in instalments with a total value of $5,000 to each member of the public, involving $36 billion. Moreover, the Government has announced that four stored value facility operators have been selected, with the target of commencing registration and payment in this summer vacation. Nonetheless, I personally hope that in order to benefit the people and boost local consumption, the authorities should allow more flexibility in the use of the vouchers.

Regarding the financial support for individuals, despite the absence of unemployment assistance fund that the public have been hoping for, the Budget has introduced a 100% Personal Loan Guarantee Scheme with a ceiling of $80,000 for those who have been unemployed for a period of time. In fact, I have also suggested FS to introduce this measure. I hope that the Government will vet and approve the applications expeditiously after the scheme is open for application, and, in the light of the actual application situation, examine whether it is necessary to further raise the amount of the loans later to help the unemployed ride out the hard times.

The COVID-19 epidemic has been raging for over one year. The vaccination programme which commenced this year originally offered hope of achieving "zero infection", but the effectiveness of the programme has been rendered uncertain by the emergence of virus variants, doubts about the efficacy of the vaccines, and the unsatisfactory vaccination rate. It is envisaged that the situation of unemployment and business closure may further deteriorate this year. Therefore, it is appropriate for the Government to prepare relief measures in advance and implement them in time. Among the major economies around the world, only Mainland registered positive growth in GDP over the past year, whereas others suffered negative growth. In the face of this rare crisis in LEGISLATIVE COUNCIL ― 21 April 2021 5075 history, the governments of various countries have adopted a new mindset to tackle the new challenges, and flexed their fiscal muscles to boost the economy. In spite of a substantial deficit, Hong Kong's current fiscal reserves still stand at some $900 billion. The Government should consider adopting more new fiscal philosophies, promoting the reform of the economic structure and tax regime, and adopting various bold fiscal measures to boost the economy and invest in the future so that Hong Kong can shake off the doldrums as soon as possible and maintain its competitiveness.

President, I so submit.

MR MARTIN LIAO (in Cantonese): President, this is a difficult and critical period for Hong Kong and many economies in the world. Although the COVID-19 vaccine has brought hope and economic recovery is in sight, the shadow of the epidemic has not yet been eliminated. Recently, confirmed cases in the world have resumed an upward trend. Affected by the epidemic, all industries are hard hit, the unemployment rate is likely to rise only and people are suffering hardship. In terms of public finances, the Government has to continuously fight against the epidemic despite the sharp drop in revenue. Undoubtedly, in Hong Kong, the primary task of this year's Budget is to fight against the epidemic and help all sectors of society to overcome the economic winter and move towards recovery. This is my general expectation for the Budget, which I have already told the Financial Secretary ("FS").

In this regard, the Budget has indeed "done its homework". After the introduction of a series of counter-cyclical measures to "support the economy and relieve people's burden" which had led to a record deficit of $250-plus billion last year, the Government continues to adopt an expansionary budget and proposes one with a deficit of more than $100 billion. It has made all-out efforts to fight the epidemic, showing empathy of the sufferings of society, and has adopted many new ideas to combat economic adversity. These initiatives are worthy of our recognition. However, apart from the uncertain epidemic situation, there are other challenges ahead, such as conflicts between the two super powers of China and the United States ("US") and geopolitics. The SAR Government must effectively lead Hong Kong out of difficulties so that it can walk more steadily on the road to economic recovery. It must also give full play to its strong leadership and appropriately support all sectors to actively participate in the country's new development pattern which "takes the domestic market as the 5076 LEGISLATIVE COUNCIL ― 21 April 2021 mainstay while enabling domestic and foreign markets to interact positively with each other", as well as seek more diversified development pathways for small and medium enterprises ("SMEs") and young people of Hong Kong.

President, due to time constraints, I will only briefly talk about a few points of concern. First of all, in fighting against the epidemic, Hong Kong has abundant resources compared with the rest of the world. We have a sufficient supply of vaccines, and electronic technology and advanced medical assistance are readily available. However, due to various reasons, the target of "zero infection" has not been achieved after a long time, and our vaccination rate is still less than 10%, which is far away from the 70% required to achieve herd immunity. Recently, it has been discovered that variants of the virus have entered the Hong Kong community, triggering worries in society about whether the new round of the epidemic will affect plans to negotiate with the Mainland and overseas countries on relaxing immigration restrictions and making travel bubble arrangement respectively. I urge the SAR Government to work with the spirit and attitude of fighting a war, and demonstrate its forward-looking and efficient governance capabilities to lead the community in winning this protracted battle against the epidemic.

(THE PRESIDENT'S DEPUTY, MS STARRY LEE, took the Chair)

In terms of easing people's hardship, the authorities have introduced relief measures of more than $300 billion. This year, one-off relief measures costing $120 billion will be introduced again. In alleviating difficulties in the job market, the Government has provided multi-pronged support. It has provided salary subsidies for millions of employees, relaxed the eligibility criteria for Comprehensive Social Security Assistance ("CSSA") for the unemployed, and offered tens of thousands of temporary jobs and training places. The Government has also, for the first time, provided a guarantee for special loans to the unemployed. It cannot be said that the Government has ignored the hardship and unemployment of the people. However, in formulating and implementing relief measures, the authorities must be down-to-earth. They must focus on improving the public's sense of gain and pay more attention to the immediate needs of grass-roots families, especially when the authorities have predicted that the unemployment rate will not fall to 5% in the next three years. They should listen more to the voices of the people and fine-tune the measures from a more humane perspective. For example, can they go one step further in relaxing the LEGISLATIVE COUNCIL ― 21 April 2021 5077 asset limits and the eight-week service period of the Short-term Food Assistance Service Projects? If the authorities can cater more to the needs of the people, restlessness will naturally be reduced and drawbacks of a haphazard approach can be avoided.

Deputy President, the Government has also introduced many measures to support SMEs, including continuing to enhance the SME Financing Guarantee Scheme by raising the loan amount and increasing the funding ceiling and scope of the Dedicated Fund on Branding, Upgrading and Domestic Sales ("BUD Fund"). More importantly, the SAR Government must be more proactive in connecting with the overall development of the country, leading all sectors of Hong Kong, especially young people and SMEs, to seize the golden opportunities brought about by the Greater Bay Area ("GBA") and the dual circulation strategy. Last year's Policy Address contained many innovative measures, some of which have already been rolled out. For example, the first batch of qualified biotechnology stocks have been included in the southbound Stock Connect, and the plans to enhance Lok Ma Chau/Huanggang control point have also been taken forward. However, there are projects the specific details of which are still under discussion, such as the plan to rent the Shenzhen Innovation and Technology Zone in the Shenzhen-Hong Kong Innovation and Technology Co-operation Zone, etc., to which the industrial and commercial sectors are paying close attention. Especially because innovation and technology is one of the development focuses of GBA and Hong Kong, the SAR Government should provide more appropriate support to SMEs, including providing financial subsidies for Hong Kong enterprises to hire more domestic and foreign technology research and development ("R&D") talents; increasing the tax exemption limit for R&D expenditures of SMEs and allowing the relevant tax deduction arrangements to be applicable to expenditures incurred by enterprises for R&D conducted on the Mainland; appropriately increasing the proportion of investment in the Innovation and Technology Venture Fund matching mechanism; and streamlining the process and shortening the time for vetting and approving applications to support the development of start-ups.

Deputy President, as far as young people are concerned, the response to the GBA Youth Employment Scheme has been overwhelming. It has been reported that among the 2 000-odd vacancies offered, at least three candidates were fighting for one vacancy. Although there are not enough jobs to go around, it is already a good start. I hope that the SAR Government will strengthen its support for young people of Hong Kong to pursue development in GBA and take the opportunity to turn it into a trend.

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As regards the local economy, the Government's initiative of issuing consumption vouchers with a total value of $5,000 is undoubtedly a bright spot. The authorities should grasp the opportunity to enhance the implementation details and make them simple and attractive, so as to achieve the target effect of boosting the economy by 0.7%. Besides, the use of electronic payment should also be promoted among small and medium-sized business owners and elderly citizens, which will also help to fight against the epidemic and create an all-win situation. Responding to climate change is a major global challenge and opportunity. In response to the country's call for support of "green recovery", the SAR Government should pay equal attention to carbon reduction and economic benefits, and strive to develop green finance and green technology into new economic growth points.

Deputy President, last but not least, I would like to discuss the issue of sound and sustainable public finance. At present, Hong Kong's fiscal reserves are roughly equivalent to 13 months of government expenditure and it is expected that the amount will continue to fall in the next few years. In addition, the continuous expansion of recurrent government expenditure in recent years and the structural problem of an ageing population are causes for concern. The Budget raises the rate of stamp duty on stock transfers; brings back the investment return of the Future Fund, and freezes the growth of the civil service establishment. But in order to comprehensively and carefully tackle the deep-seated problems, the Government should conduct in-depth studies. In addition, in the period of "order after chaos" upon the introduction of the National Security Law and the improvement of the electoral system, the Government should make good use of the time to include this issue on the social agenda again.

Deputy President, I so submit.

MR YIU SI-WING (in Cantonese): Deputy President, Hong Kong suffered the double blow of the disturbances arising from the proposed legislative amendments and the novel coronavirus epidemic in these two years, thus the revenue of the Government drops substantially. Coupled with the need to allocate funds to support the pandemic-stricken industries and their practitioners, the deficit in this year's Budget has exceeded $250 billion. A huge cut of "candies to be handed out" is thus expected. In the past year, the Government successively rolled out multiple rounds of relief measures in response to the pandemic by putting in many resources. To a certain extent, this has achieved LEGISLATIVE COUNCIL ― 21 April 2021 5079 the effect of "supporting enterprises and safeguarding jobs". However, to those particularly hard-hit trades, e.g. travel agents, hotels, cross-boundary transportation services, aviation, cruises, coaches and scenic spots, this can only offer some temporary relief. At present, these trades are on "saline drip" and can barely survive.

I thank the Financial Secretary ("FS") for the attention paid to the tourism industry by pointing out right at the beginning of his speech that tourism was brought to a frozen state by the epidemic. Although exports of travel services fell drastically by 90% for the year as a whole, this Budget has not given much actual support but only an allocation of $934 million to the tourism industry. A major portion of this allocation, i.e. over $700 million in total, was dedicated to the Hong Kong Tourism Board ("HKTB"). However, for tourism-related trades that have experienced a direct blow, the Budget has basically not offered any support. The industry is generally disappointed with this. I understand that it is impossible to ask the Government to make adjustment to the Budget now, but I do hope that the Government can keep abreast of changes to the epidemic situation and provide timely support to the hard-hit tourism industry in the coming year, so as to prevent a possible failure to provide quality service timely due to insufficient support and practitioners upon the revival of the industry.

Deputy President, this Budget provides an additional provision of $760 million to HKTB, which likewise received an additional funding last year. However, due to the pandemic, overseas promotion and mega events have been cancelled one after another. Hence, HKTB returned the unused $700 million to the Government. It is true that HKTB has previously done a pretty good job in promoting Hong Kong overseas, and is richly experienced with a fairly good reputation in organizing mega events and activities. However, as it is still uncertain when the global tourism industry will revive, I guess HKTB will probably face the same situation as last year, and that is, nowhere to use the funding. Even if Hong Kong can resume people flow with the Mainland, the tourism business will have limited operation at the beginning. Probably, it can only feature the short-haul visitor source in the Greater Bay Area as the overseas markets are even more unpredictable. We are all unable to anticipate when and where a travel bubble can be launched, and the revival of overseas arrivals is expected to be even slower. Therefore, I reckon that it is unlikely for mega events to be organized.

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In the past, more than 70% of HKTB's resources were devoted to overseas source markets and the organization of mega events. Under new circumstances, HKTB must adjust its previous promotion concepts. And, in light of the changes to the epidemic situation, HKTB should shift its previous emphasis from spending on overseas publicity and promotion to strategically formulate short-, medium- and long-term measures. Regarding short-term measures, the authorities should help boost local consumption through domestic tourism. I drew reference from Macao's experience and learnt that the Macao Government Tourism Office launched the "Macao Ready Go! Local Tours" activity last year. Macao residents joining designated local tours are entitled to a subsidy of MOP$280 for a maximum of two claims. For this purpose, the Macao authorities have set aside MOP$280 million as subsidy. Recently, the Macao authorities again set aside MOP$120 million for launching the "Stay, Dine and See Macao" activity, in which each Macao resident is entitled to a hotel subsidy of MOP$200. Macao's train of thought in respect of subsidization is to help the trades plagued by prolonged underemployment through the adoption of the welfare-to-work approach. Certainly, HKTB has also rolled out the "Spend-to-Redeem Free Tour" programme and "Staycation Delights" campaign successively, but the total expenditure was merely $300 million. This is much inferior to those of Macao both in terms of scale and effect. Hence, I hope that the Government and HKTB can boldly think out of the box by utilizing part of the budget originally set aside for overseas promotion to subsidize local tourism activities, thereby spurring local consumption.

For medium-term measures, the Government should endeavour to seek Mainland's support, with a view to resuming cross-boundary travel with the Mainland and Macao as soon as possible. Only the resumption of cross-boundary travel can bring hope to the various trades and businesses in Hong Kong, and enable the tourism industry to see light at the end of the tunnel. Therefore, regarding HKTB's budget this year, apart from considering how promotional efforts can be strengthened after resuming cross-boundary travel with the Mainland, it may also consider attracting Mainland visitors to come and spend in Hong Kong by issuing consumption or discount vouchers.

As regards long-term measures, the Government has to keep on proactively exploring the launching of travel bubbles with overseas countries or cities where the pandemic has been under control, and exerts its best efforts when the conditions are ripe. Given the unpredictable epidemic situation, HKTB also has to customize its efforts to suit different places when launching publicity and LEGISLATIVE COUNCIL ― 21 April 2021 5081 promotion overseas so as to avoid wastage. Precisely, over $4 million down payment for the New Year's Eve countdown event last year was wasted owing to excessively early preparation. The Government and HKTB should learn a lesson from it.

Deputy President, this Budget earmarked $6.6 billion to prepare for the creation of 30 000 temporary jobs. The adoption of a welfare-to-work approach is worth encouraging. Recently, the Government has outsourced the reception and administration of the Community Vaccination Centres to the tourism industry for a period of five months, providing 1 700 jobs. The project was coordinated by the chambers of commerce of the tourism industry, with the recruitment work taken up by a non-profit-making company. It was cordially responded by tourism practitioners, and over 10 000 job applications were received within just a few days. It can thus be seen that a large number of tourism practitioners are still unemployed and in desperate need of a job to make ends meet. I hope that the Government will sum up the experience from the provision of temporary jobs in vaccination centres and apply it to other short-term job projects in the future. For instance, the Government is preparing for the operational details of the disbursement of electronic consumption vouchers, which may require the creation of a large number of short-term logistic posts in different areas, such as call centres, online enquiry service, etc. According to past practices, the Government would attract the participation of enterprises through public tender. However, given their experience and strength, large-scale companies often seized the opportunity ahead of others. In the future, for those short-term projects, the Government may consider inviting the participation of qualified non-profit-making organizations and giving priority consideration to employing jobless practitioners of trades in exceptional hardship, so as to create more temporary jobs to directly help the people in need.

Deputy President, this Budget has responded to some of my proposals, including harbourfront enhancement, improvement of country park facilities and completion of the West Kowloon Cultural District as scheduled. Improving the above measures can enrich Hong Kong's tourism elements and enhance visitors' experience. In addition, the Budget also allocates $169 million for the Tourism Commission to continue to take forward and deepen local cultural, heritage and creative tourism projects. Apart from promoting the above tourism-related proposals, I hope the Tourism Commission would also help the industry make better use of the said resources for developing relevant tour route products, which will be conducive to the recovery of local tourism after the epidemic. 5082 LEGISLATIVE COUNCIL ― 21 April 2021

Meanwhile, the Government has also responded to the demand from me and the industry by extending the Travel Agents Incentive Scheme for inbound and outbound tours and the Green Lifestyle Local Tour Incentive Scheme to the first quarter of next year. This will help the tourism industry promote local tour businesses. However, given the one-year extension of the schemes, it is anticipated that the original estimated expenditure will not suffice to satisfy the industry's needs. I hope the Government will timely allocate or duly increase the funding to help the industry tide over the hard times.

Deputy President, FS forecasts that the actual economic growth may reach 3.5% to 5% this year. Although there will be an overall economic growth, the hard-hit tourism and related industries are expected to take a long period of time to recover. I hope the Government will keep caring about the situation of the trades in exceptional hardship and roll out more relief measures in a more targeted manner where necessary, so that Hong Kong can get back on the right track.

Deputy President, with these remarks, I support the passage of the Budget.

MS ELIZABETH QUAT (in Cantonese): Deputy President, I speak in support of this Budget. As we all know, Hong Kong suffered the double whammy of "black-clad violence" in 2019 and the epidemic last year. On top of internal troubles, Hong Kong is externally caught between a rock and a hard place in the conflicts between China and the United States. Our economic situation is now very daunting, with the unemployment rate hitting the new peak of 7.2% since 2004. Worse still, the Government has forecasted a $257.6 billion deficit, coupled with the fluctuating epidemic situation overseas, our economic prospect is not optimistic either with fiscal reserves falling to some $900 billion. Under these circumstances, as the Financial Secretary ("FS") has said, the limited resources must be allocated with great care and it is quite impossible for the Budget of this year to meet the expectations of all Hong Kong people.

After the Budget announcement, the Finance Committee had held meetings for days to examine the Budget. During the meetings, we raised a number of questions on the Budget measures for discussion. Over the past period of time, we have reached out to the masses and listen to their views. Generally speaking, members of the public do not only have high expectations of the Government's Budget, but also its overall administration, especially when peace has been LEGISLATIVE COUNCIL ― 21 April 2021 5083 restored in the legislature and also in Hong Kong after the enactment of the National Security Law. People have higher expectation of the Government than before as there will no one in the Legislative Council to impede the Government. It should therefore perform better. What are the public's expectations of the Government and the Budget? According to the views collected by me, people generally want the administration of the Government to be more down-to-earth, more human, more efficient and more forward-looking in addressing the pressing needs of the people. On public spending, they hope the Government will "spend where necessary and save where possible" and put it to good use. Here, I would like to discuss with the Government the problems facing it at this moment.

Over the past period of time, there have been frequent public criticisms that government policies are out of touch with social reality and ill-thought, and have failed to address the pressing needs of the people. The Government is thus advised to exert greater strength and devote extra efforts to collect public views.

On the point of more human administration, people expected the Government to solve all existing problems with its Budget and policies. Certain problems, such as those related to healthcare, should be solved within the next few years. I will skip the anti-epidemic issues for now and discuss the existing healthcare problems first. We have received many complaints about the long waiting time for healthcare services, the shortage of healthcare personnel, so on and so forth. All these are indeed deep-seated problems plaguing Hong Kong for many years. Yet, the Government has still failed to come up with any solutions to address doctor shortage. That is why I have boldly advised the Government to take back the power from the Medical Council of Hong Kong so that it will no longer decide on the number of overseas-trained specialists practising in Hong Kong. Besides, I have also suggested the Government to invest more on the training of healthcare professionals. I think the Government should have the courage to consider this suggestion. In addition, in view of the ageing population in Hong Kong and an increase in chronically-ill patients, there will be greater demand for healthcare support. How can the mechanism for introducing new drugs provide greater support to patients with rare diseases or cancer and save their families from peril? I think the Government could have done better to address these problems in its Budget and policies.

I do not think the measures in this Budget is enough in respect of care services for the elderly and people with disabilities ("PWDs"). As we all know, residential care home places for the elderly, PWDs and mentally handicapped 5084 LEGISLATIVE COUNCIL ― 21 April 2021 persons are in serious shortage. Yet, neither the Policy Address nor the Budget has proposed any solution to this problem and relieve the burden of the carers. I consider this another deficiency.

On improving of the efficiency of government administration, the Government's performance has also caused many people to jump all over. Hong Kong used to give people an impression that both the Government and people were highly efficient. Not only can they work expediently, but also flexibly. Yet, over the past decade or so, all our neighbouring countries or places seem to be acting faster than we do, whereas Hong Kong has become slow in everything, including government decisions and actions. If compared with our country, China, Hong Kong's efficiency is even worse. Therefore, the Government should not only focus on fund allocation in preparing the Budget. Of course, the decision of fund allocation does not lie in the hands of FS alone, but had been discussed with all Policy Bureaux. In addition to fund allocation, FS should consider setting key performance indicators (KPIs), so that the public will know the achievements or results expected to be attained by the government spending. The Government should stop investing and spending in futile endeavours. I suggest the Government to give thought to this.

Meanwhile, government departments do not seem to have effective collaboration. Whenever there is an inter-departmental policy, the departments concerned will keep passing the ball to others' court, thus giving people an impression that the Government is highly inefficient. An example is the handling of housing issue, which is a serious problem in Hong Kong. While land is a necessity for housing construction, land development in Hong Kong is extremely inefficient. I agree that land identification is uneasy, but there are actually many available sites in Hong Kong. While some of them are government land, many others belong to private developers that require an application for a change of land use. After a developer changed the land use, it may take more than a decade from developing an idea, discussing it with the Government to using the site for housing construction. Moreover, during this process, the developer can hardly make any plans as it does not know when the long wait will end. As a result, some of the available sites in Hong Kong are left idle. Furthermore, the Government is indecisive in land identification. Even though the Government now claims that it has sufficient sites in hand and there will be adequate supply of public housing in the years to come, I am still worried that the target cannot be met and thus fails to address the problem of applicants LEGISLATIVE COUNCIL ― 21 April 2021 5085 for public rental housing having to wait for as long as five years. On the supply of private housing, there was a steep plunge, meaning that there will be unmet demand in the private market for a long time. In this case, how can property prices be stable? Many people hence felt hopeless, thinking that they may never have their own flat even if they work hard and save hard. This problem will arouse public grievances again.

Speaking of foresight, many people do not think Hong Kong is doing a good job in its fight against the epidemic. I know the Secretary has been working very hard and I am also grateful to the anti-epidemic efforts of the frontline healthcare personnel, but after the long fight of over a year, Hong Kong people are now suffering more than "anti-epidemic fatigue". Many of them have become so desperate that their only hope is pinned on a high vaccination rate, which will bring about an early resumption of cross-boundary travel. Previously, when Hong Kong had no supply of vaccines, we urged the Government to make purchases promptly; now that vaccines are available, we urge members of the public to receive vaccination as soon as possible albeit the expected smear attempts. Although the number of persons receiving vaccination in Hong Kong is still low and the resumption of the cross-boundary travel has been put off indefinitely, I very much hope that the Government will learn from the efficiency and expediency of our Motherland, China, and act decisively in the fight against the epidemic.

With regard to addressing the pressing needs of the people, we are furious about Secretary Dr LAW Chi-kwong's refusal to take on board our long-standing proposal for unemployment assistance. He left FS with no choice but to spend $30 billion to introduce the electronic consumption vouchers and the 100% Personal Loan Guarantee Scheme. Although we hope these measures can genuinely help ease the people's plight, many people may not make it through this hard time without the short-term unemployment assistance. The Government should not make people feel that it is "tight-fisted for benevolent causes but lavish on unworthy causes". It is my hope that every penny spent by the Government will genuinely help the people. For instance, the annual expenditure of $1.2 billion on "bogus refugees" has added up to a government spending of some $6 billion or $7 billion over the past few years. This is what we call "wasting money on unworthy causes". Another example is the $1 billion allocated to Radio Television Hong Kong ("RTHK"). Many people think that it is good if RTHK can help Hong Kong, but if not, it is likewise "wasting money on 5086 LEGISLATIVE COUNCIL ― 21 April 2021 unworthy causes". Therefore, the most important is to make people think that every penny spent by the Government is value for money. I hope that the Government can really care about the people, act decisively and address the pressing needs of the people in its future administration.

Deputy President, I so submit.

MR JEFFREY LAM (in Cantonese): Deputy President, it has been nearly two months since the Budget was published. The atmosphere this year seems to be different when we have the debate because the opposition camp is not in this Chamber to stage malicious filibusters; the Rules of Procedure of the Council have also been amended; our speaking time has become shorter and our speeches have become more concise. In short, there is less nonsense and higher efficiency. Deputy President, the cleverest housewife cannot cook without rice, so there is really nothing easy about drafting this Budget. It is not easy for the Financial Secretary ("FS") to strike a balance between alleviating people's difficulties and dealing with the worst fiscal deficit in Hong Kong's history. Fortunately, the answer given by FS is not bad.

The Hong Kong General Chamber of Commerce ("HKGCC") which I represent considers that the Budget has responded to the three most pressing issues in Hong Kong, i.e. supporting members of the public and enterprises that bear the brunt of the epidemic; consolidating Hong Kong's position as a leading financial, commercial and tourism centre; and promoting the laying of an important innovation foundation in Hong Kong. The Budget has adopted more than 40 proposals put forward by the Business and Professionals Alliance for Hong Kong ("BPA"), including issuing $5,000 electronic consumer vouchers to the public; issuing additional green bonds; subsidizing the listing of Real Estate Investment Trusts in Hong Kong and continuously promoting local tourism. I welcome the above proposals.

In regard to supporting enterprises, we are pleased to see that FS has accepted our proposal and introduced further financial relief measures for enterprises, e.g. providing profits tax concessions and waiving business registration fees, rates, water and sewage charges as well as providing an electricity charge subsidy. We also welcome the fact that the Budget has adopted good advice and will extend the application period of the SME Financing Guarantee Scheme and further increase the maximum loan amount per enterprise LEGISLATIVE COUNCIL ― 21 April 2021 5087 to help small and medium enterprises tide over difficulties. At the same time, FS will make injection into the Dedicated Fund on Branding, Upgrading and Domestic Sales ("BUD Fund") and raise the funding ceiling for each enterprise to $6 million, which will also assist enterprises in opening up new markets.

However, the Budget will only inject $1.5 billion into the BUD Fund and we believe the amount is insufficient to support enterprises in responding to the epidemic situation. So, we suggest the Government should further optimize the relevant scheme through export credit insurance and other methods to render enterprises stronger support.

Furthermore, as regards the Pre-approved Principal Payment Holiday Scheme mentioned in the Budget, the Hong Kong Monetary Authority announced last month that it would extend the scheme for another six months to October this year. I welcome the authorities' response to our request, but the epidemic does have far-reaching impact and the enterprises do not only have funding needs within a short time. Even if economic recovery in Hong Kong will luckily start in the second half of the year, the enterprises will not immediately have money for debt repayment, we thus hope that the scheme can be extended by one year to April next year.

Deputy President, government revenues have decreased and expenditures have increased during the epidemic, but I believe the issuance of different types of bonds is a viable way for the Government to retain financial strength. I welcome the Government's acceptance of our proposals related to bonds, including issuing more green bonds, silver bonds and inflation-linked bonds. Issuing government bonds, expanding the scope of Bond Connect and issuing additional retail bonds will help to further consolidate our capital market and enhance our status as an international financial centre.

Bonds provide investors with another option for interest earning. I suggest the Government to lower the entry threshold of bond trading as soon as possible and consider securitization of bonds so that investors at large can buy and sell different types of bonds through the trading platform of the Hong Kong Stock Exchange. We also suggest that a certain amount of green bond products should be reserved for small and medium securities dealers to help them develop business in the bond market, thereby enabling them to seize opportunities arising from the development of the bond market.

5088 LEGISLATIVE COUNCIL ― 21 April 2021

On the other hand, the Outline Development Plan for the Guangdong-Hong Kong-Macao Greater Bay Area ("GBA") supports Hong Kong in building a green financial centre in GBA. As an international financial centre, Hong Kong should make good use of its advantages to promote green and sustainable financial development. I suggest the Government should strengthen publicity and introduce coupling measures to enterprises in GBA. This would attract more enterprises in GBA and different parts of the Mainland to issue green bonds in Hong Kong, and promote Hong Kong as the green financial hub in GBA. The Government should also continue to encourage more institutions in GBA to make good use of our capital market for green investment and certification, as well as support green enterprises and projects in GBA.

In respect of promoting innovation and technology, we are also pleased to see that the Budget proposes to inject $9.5 billion into the Innovation and Technology Fund over two years to fully promote the development of the Hong Kong-Shenzhen Innovation and Technology Park as well as continue to promote the Science Park expansion and Cyberport 5 development. We believe that these measures will bring long-term benefits to our economy and pave the way for future development.

Some middle-class people have reflected to me their disappointment at the tax reduction proposed by the Government for salaries tax and tax under personal assessment. I hope FS can take better care of the needs of the middle class.

Deputy President, although the epidemic situation has recently eased, the impact of the social movements and the epidemic situation in the past year or so still persists and the epidemic situation is yet to be over, thereby putting downward pressures on the economy. Taking the tourism industry as an example, as one of Hong Kong's pillar industries, the tourism industry was hit hard by the epidemic last year and business and operation have been suspended. Even though the Government has invested resources to promote local attractions, the situation of the tourism industry is special. Unlike industries such as the catering and retail industries which still have scant business during the epidemic, the tourism industry simply has no business at all. Does the Government know what it means to have no business at all? The bosses are paying rents in vain each month. They are also paying salaries out of their own pockets to retain the employees, who do not simply have their daily working hours reduced by few hours, but actually have nothing to do. Therefore, I think the Government LEGISLATIVE COUNCIL ― 21 April 2021 5089 should provide support for industries, such as the tourism industry, which have been hard hit by the epidemic under a new round of the Employment Support Scheme to speed up post-epidemic economic recovery.

In addition, regarding support for the unemployed, BPA has repeatedly strived for establishing unemployment assistance to provide a monthly subsidy of not less than $8,000 in cash to each unemployed person. Unfortunately, the Government has been reluctant to accept that. FS exercised his authority to allocate $15 billion to set up a 100% Personal Loan Guarantee Scheme for the unemployed. This is worthy of recognition because a person engaged in politics should use his political wisdom to cut the institutional red tapes and try his best to help Hong Kong solve various problems.

Deputy President, BPA has been striving for early resumption of cross-boundary travel so that cross-border flow of people and economic activities can return to normal. If cross-boundary travel cannot be resumed, all impressive plans will become empty talk. We urge the SAR Government to strive for the Central Government's pledge to allow people who have been vaccinated against COVID-19 to cross the border without being subject to quarantine. HKGCC also calls on the business sector to encourage employees to actively receive vaccines to protect themselves and their families, so as to enable Hong Kong to put an end to the epidemic situation, revitalize the economy and improve people's livelihood as early as possible.

Last but not least, in spite of the fact that Hong Kong encountered various challenges last year, I am really happy to see that FS has responded to the pressing needs of enterprises and the public and made long-term plans for the future of Hong Kong. With the hope that global economic recovery will be achieved later this year, adding that many places have implemented vaccination, I hope these measures would become an important driving force for our economic recovery.

Deputy President, I so submit.

DR PRISCILLA LEUNG (in Cantonese): Deputy President, learning from the past helps us to understand the present and look to the future. When assessing the performance of the previous Financial Secretaries ("FSs"), we must consider the timing, geographical and human conditions at the time. During the 1997 5090 LEGISLATIVE COUNCIL ― 21 April 2021

Asian financial turmoil, the then FS Donald TSANG was hailed as "FS who beats the predators." Antony LEUNG is the one with the most famous quote of "The money you made is not yours, the money you spent is." Henry TANG is the luckiest of all. He abolished wine tax and estate duty while he was in office, for the general environment back then posed no problem of funding sources or fiscal reserves. John TSANG, who experienced the financial tsunami when he was FS, was dubbed "FS who made the wrong estimates." However, he accomplished one task, i.e. putting money into the Future Fund, and planning for the future is what we are going to discuss now. When FS Paul CHAN took office, I hoped that he would have "super ears" and "super eyes". Let us consider whether the present Budget demonstrates these two aspects.

I think the circumstances faced by FS can be described in three words―very, very difficult. I remember that in 2018 when super typhoon Mangkhut hit Hong Kong, we said that an economic Mangkhut was about to come. As the storm was on the way, everyone had to close the windows to keep out the rain. All economic and financial measures were taken to prepare for the economic storm. To our surprise, the situation was worse than expected. There was internal attrition in society, i.e. the "black-clad riots" in 2019 on the one hand, and on the other hand came the natural disaster of the epidemic in 2020, which has continued to this day. Hong Kong has almost entered an ice age.

However, as the saying goes, "Though the Chinese New Year is almost like an annual problem, people always manage to get over it somehow in the end". After experiencing the financial tsunami in 2008, the Hong Kong economy demonstrated its good recovery ability. In my speech delivered at that time, I told the then FS John TSANG that "Yet monkeys are still calling on both banks behind me, to my boat these ten thousand mountains away". At that time, the "calls of the monkeys" referred to Members of the local opposition camp who kicked up a fuss about everything. Today, however, the "calls of the monkeys" refer to challenges posed by the international, economic, and political environment. This time, I have chosen to read the lines of another poem by LU You of the Southern Song Dynasty, "Strong wind whipped up the rain and darkened the village; heavy rain hit the surrounding hills and roared like angry waves". It means that we are surrounded by imminent wind and rain, often directly affecting us, and we can only react passively. At the time when FS Paul CHAN assumed office, he was so lucky that the fiscal surplus once reached the highest of $148.9 billion. Everyone was concerned whether he would "hand LEGISLATIVE COUNCIL ― 21 April 2021 5091 out cash", and he finally listened with "super ears" and handed out $10,000 cash to each citizen. Public support for him thus greatly increased. At present, under the difficult circumstances when everyone thought that he would not "hand out cash" again, FS surprised everyone by proposing to issue electronic consumption vouchers with a total value of $5,000 to all eligible people.

Nevertheless, after introducing four rounds of Anti-epidemic Fund, almost $200 billion was spent. The estimated deficits would be $257.6 billion and $101.6 billion for 2020-2021 and this year respectively, totalling more than $300 billion. There will still be deficits of more than $10 billion in the next few years. We must refer to the Basic Law which stipulates that SAR must strive to achieve a fiscal balance and cannot arbitrarily use its reserves to "hand out cash". This is a constitutional requirement. Article 108 of the Basic Law provides that Hong Kong must implement the low tax policy.

I understand that it is very difficult for a person to spend even $1 when he is hard up and the account is in red. Therefore, I can understand the need to explore the possibility of broadening the tax base. However, I think that is a very bad policy to increase sources of income. When we invested in the Future Fund back then, we were considering danger in times of peace; today, we are considering development in times of danger. We must let Hong Kong people see a ray of hope in the future and give them confidence. In 2015, an initial endowment of around HK$220 billion from the balance of the Land Fund was invested in the Future Fund, and five years later, it has accumulated a return amounting to $100 billion now. FS says every year that he will bring back $25 billion to ease the pressure of the deficit, which I think is investing in the future. The more difficult the situation is, the more important it is to give people hope and not just focus on generating additional instant income, such as increasing tax revenue.

I think maintaining a balance of payments is even more difficult because it involves political issues. Many colleagues said that we had to continue giving handouts for it would improve people's livelihood and the economy, but what shall we do afterwards? There will only be two options. First, printing money like some overseas countries; and second, issuing bonds. We cannot keep on having deficits, what should we do then? I think we should break new grounds. However, how big is Hong Kong? We surely have to rely on other sources of help to absorb resources. Many people have suggested that foreign funds should be absorbed by all means, including utilizing the management mechanisms in 5092 LEGISLATIVE COUNCIL ― 21 April 2021

Hong Kong under which large amounts of funds can be absorbed. In addition to absorbing funds, I think attracting talents is also very important. In this regard, Hong Kong is still complacent with its conservative approach.

Recently, I consulted a very senior staff member of Morgan Stanley who specializes in investment. He told me that one of the most important financial challenges that Hong Kong would face is the global application of financial technologies ("Fintech"). Hong Kong does not lack finance talents, but we have a shortage of technology talents. The development of Fintech requires a huge sum of money. We must look at the issue from a four-dimensional (4D) rather than 2D perspective. Is Hong Kong ready for it? We have an excellent financial system and finance talents are also available, but can our technology keep pace with the development? I fully support and encourage young people to pursue development in the Greater Bay Area, but after numerous consultations, we are aware that many young people and even scientists who previously studied overseas but returned to work on the Mainland, have already stayed in Hong Kong for nearly 20 to 30 years. They like Hong Kong very much, but the Hong Kong Government has never formulated any special policies to keep them here so that Hong Kong can have a technology industry.

Besides, many young people want to start their own business, but the vast majority of them failed in the first round, losing $200,000-odd each year and leaving them with nothing. In fact, most of them need employment, but the technology industry in Hong Kong cannot provide them with the experience and opportunity for employment. I have discussed with several university presidents in Hong Kong, many of them are talents in high-end technology and are very learned in new energies and optics. They all said that if they wanted to obtain capital investments from Shenzhen, considerable resources were readily available to them because Shenzhen was in desperate need of these technologies and talents. On the contrary, Hong Kong's pace in this regard is quite slow and it seems that it is unaware of the existence of these talents. Yesterday, I met a group of "returnees". They are Mainlanders who studied overseas with outstanding results, and subsequently became financial or technological talents and had been recruited to work in universities or institutions in Hong Kong since the 1990s. They said that the Hong Kong Government and the entire system had completely ignored them. Shenzhen is so smart that it immediately hired them to work and developed new energy enterprises. It has also provided many job opportunities for young people. Thus, we need to adopt a two-pronged LEGISLATIVE COUNCIL ― 21 April 2021 5093 approach. On the one hand, we must encourage people to develop a career or start a business in the Greater Bay Area, which I think is possible, and at the same time, we cannot give up on Hong Kong's own role.

Furthermore, Shenzhen and Hong Kong are brothers. In pursuing development in the future, we cannot allow what happened in Sandy Ridge Cemetery and Crematorium to recur, i.e. building a cemetery and crematorium next to other people's financial and economic centre 10 years ago. It is neither a question of law nor one of authority. We absolutely have the right to do so, but will such an uncompromising approach hurt our relationship with others? As brothers, we should be more considerate towards the interests of other people. When the Huanggang Port was built, Shenzhen had also contributed a lot of money, sparing us of the need to pay. This is brotherhood. I think Hong Kong must look to China, the new generations and the world. Only by developing Fintech and technology finance will there be hope for Hong Kong to attract more people to stay in Hong Kong to invest, start businesses and pursue development when integration succeeds in the future.

MR POON SIU-PING (in Cantonese): Deputy President, I must begin my opening remark on the Budget by thanking Financial Secretary ("FS") Paul CHAN from the bottom of my heart.

I am grateful to FS not because this Budget prepared by him has responded to all the needs of the community. In fact, the Budget still has various defects and fails to address the poverty problem. I am grateful to FS because he has broken through bureaucracy, especially the barriers posed by the conservatism and rigidity of the Labour and Welfare Bureau. FS willingly took up his responsibility and introduced the 100% Personal Loan Guarantee Scheme for the unemployed through the Financial Services and the Treasury Bureau. It can be said that this loan scheme is a variation of the unemployment loan fund which the Federation of Hong Kong and Kowloon Labour Unions ("FLU") and I have been vigorously advocated for more than 10 years. Back in 1997 when unemployment rate soared after the Asian financial turmoil, Members from FLU urged the Government to set up an unemployment loan fund. For nearly 20 years since then, FLU has been urging the various FSs to consider establishing an unemployment loan fund when expressing views on the Budget annually. Nonetheless, our words have simply fallen on deaf ears year after year. It was not until this year that FS finally introduced a policy with the same direction as FLU in his Budget.

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In fact, unemployment loan is not the most ideal measure to assist the unemployed. Like other labour rights concern groups, FLU has been urging the Government for decades to set up an unemployment assistance fund to help employees who have failed to make ends meet due to unemployment. Similar to other labour demands such as the right to collective bargaining and centralized employee insurance, the views expressed by the labour sector have been ignored by the Government for various specious reasons. We therefore have to put forward an alternative plan to offer loans instead of an unemployment assistance fund as a compromise.

Deputy President, economic globalization and technological advancement have profoundly changed the traditional labour market, resulting in increasing job insecurity. The Government should not shy away from formulating some forms of unemployment support measures. As currently proposed by FS, the Government will provide a loan guarantee commitment of $15 billion in public money for a short-term unemployment loan scheme, subject to a loan ceiling of $80,000 per applicant. The application period will last for six months. While this six-month unemployment loan scheme appears to be an insignificantly small step, I hope that this will mark a big step towards Hong Kong's breakthrough in unemployment assistance and even social welfare reform. We call on the Government to regularize the unemployment loan scheme to cope with an increasingly volatile labour market. If the Government fails to provide loan guarantee in the long run, FLU suggests taking one step back and using the employees' Mandatory Provident Fund as a loan guarantee, with a view to implementing a sustainable unemployment loan policy.

Deputy President, according to the unemployment figures recently released by the Census and Statistics Department, the unemployment rate was 7.2% and the number of unemployed persons reached 261 000; over the same period, the underemployment rate was 4% and the number of underemployed persons reached 154 000. The Secretary for Labour and Welfare suggested that the unemployment rate had probably peaked. So what? Even if the unemployment rate falls, does the Labour and Welfare Bureau think that it can simply sit back and do nothing to help the unemployed employees. Moreover, many employees are not as optimistic about the future as the Secretary. Workers are living under increasing pressure because they have been underemployed and forced to take no-pay leave, therefore adding to their resentment against the Government.

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Deputy President, in order to increase the number of jobs, the Government has created a total of 31 000 time-limited posts in the public and private sectors through the Anti-epidemic Fund. I welcome this initiative. However, the Government must expedite the effort to help the unemployed return to the labour market as soon as possible, so as to solve the problem of short-term unemployment or underemployment. In addition, the Government has planned to create 2 000 short-term posts in the Community Vaccination Centres, which will be filled by tourism practitioners. I hope that the Government will make good coordination arrangements with the relevant stakeholders. Hopefully, these short-term posts will help some employees in the tourism industry tide over the difficult period.

In addition, FS mentioned in the Budget that the Government will ask the Employees Retraining Board to launch the fourth tranche of the Love Upgrading Special Scheme in July, and to provide more training options under the scheme and more online courses for trainees to engage in distance learning during the epidemic. Apart from providing more training options, I hope that the Government will work with enterprises to provide follow-up job arrangements upon completion of the courses, so that trainees cannot only enhance their skills, but may also change career path successfully or take up short-term internship opportunities, which will facilitate their career development as the economy recovers in the future.

On the social welfare front, compared with the revised estimate for 2020-2021, there will be an increase of 16.2% in the estimated government recurrent spending on social welfare next year. The recurrent expenditure on social welfare will account for 20.4% of the overall government recurrent expenditure, the highest among policy area groups for the first time since the establishment of the SAR Government. The increase in expenditure and better use of resources are not necessarily related. For example, the two tranches of the Employment Support Scheme have expended $90 billion in public funds, but only to save enterprises but not jobs of employees. While FS has been stressing the need to increase resources, we are more concerned about the proper use of resources.

Deputy President, it has been more than a year since the outbreak of the novel coronavirus. Up till today, we can only weather the previous waves of epidemic outbreak thanks to a group of local healthcare and supporting staff who have been working quietly at the healthcare front line. We owe them our 5096 LEGISLATIVE COUNCIL ― 21 April 2021 deepest gratitude. I once again urge FS to allocate resources to boost the morale of Hong Kong's healthcare and supporting staff. I also hope that the Hospital Authority will make optimal use of its resources to retain healthcare staff to serve members of the public.

Lastly, the pilot scheme on Civil Service Chinese medicine ("CM") Clinics has been launched for a year. It turns out that the CM clinics have been fully booked. I urge the authorities to complete the review of the scheme as soon as possible and proceed to the next stage, with a view to increasing service capacity and responding to the long-standing demand of civil servants.

Deputy President, I so submit.

DR CHENG CHUNG-TAI (in Cantonese): Deputy President, speaking of this Budget, Financial Secretary ("FS") Paul CHAN has repeatedly emphasized its counter-cyclical nature and moaned that there would be a deficit of around $257.6 billion this year. Yet, when members of the public looked at the figure, they only have one question in mind: Where had the money gone as the Government has "handed out candies" for so many years under surplus budgets? Only in this year's deficit Budget can we see some meagre welfare benefits―I want to highlight the word "meagre"―going into the pockets of Hong Kong people.

What are the welfare benefits that I am talking about? The two most obvious measures are, firstly, the regularization of food banks. This proposal was advocated years ago, but it is only until this year that the Government expressly announced the regularization of food banks for the benefit of the grass roots. Meanwhile, however, the Government has failed to address a problem in its complementary welfare policies, i.e. the incapability of the collaborating organizations of food banks to meet the unexpected demand from the grass roots. So, while it is right to regularize food banks, the Government is doing it badly.

Secondly, the relaxation of the working hour requirements under the Working Family Allowance Scheme. This welfare benefit is very specific, considering that the problem facing Hong Kong is not purely unemployment. Many people will soon fail to make ends meet. For "slashers", "casual workers", "workers wearing different hats" or "part-time workers"―no matter how we call them―they are all facing the same problem, i.e. failing to live off their jobs. LEGISLATIVE COUNCIL ― 21 April 2021 5097

The Working Family Allowance Scheme aims to ease working poverty, but not many people talk about this nowadays because as we all know, employment people can still be poor, or may even be poorer than the recipients of Comprehensive Social Security Assistance. This is the saddest of all.

In the entire Budget, there are actually only two fairly concrete measures that can genuinely help the grass roots. Then, what is the general comment on the Budget? It gives a surreal impression. Deputy President, I wonder if you are aware of the opening of the Boao Forum yesterday. When the Chief Executive was interviewed by the China Central Television, she made the following comment: "The most difficult time for Hong Kong―I must say economically speaking―is over. Hong Kong's Gross Domestic Product ("GDP") is expected to grow by 3% to 5% this year." I wonder if those more seasoned Members present recall that when the then FS Donald TSANG commented on the prevailing financial turmoil in 1998, he criticized that there were many bottom-class economic analysts back then. According to his analysis, the economy of Hong Kong would recover in two years, but there were still many people jumping to death up till 2003.

Do we really believe the most difficult time for Hong Kong is over? I must say economically speaking. Of course not. I would like to share with Members some objective figures. First, regarding wealth disparity, the Gini coefficient is no longer useful in providing insights for Hong Kong. What objective figure can we use then? According to the survey data released by Citibank on Hong Kong's decamillionaires two days ago, as at the end of 2020, more than 500 000 Hong Kong people owned net assets of at least $10 million each. Out of a population of 7.5 million, 500 000 people have $10 million in assets! That is definitely not me. I am a proletarian, so I do not know why people say that I have to repay mortgage. I am a tenant. Hong Kong has as many as 500 000 decamillionaires! While some people doubted if this figure has been exaggerated, some people said that any landlord owning two flats can easily have $10 million in assets. Yet, we should not forget that the figure was taken from a rough survey. Has anyone ever imagined that an elderly woman, who is a victim of a fraud, lost as much as $250 million in the case? What is the point of studying hard? This is the first figure. Hong Kong is really very rich, but where is the wealth? It is in the hands of just 0.5%―not even 1%―of our population.

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Secondly, when the rent of subdivided units in Hong Kong was discussed at the meeting of the Yau Tsim Mong District Council held last week, we learnt that 50% of the tenants of subdivided units had been subject to rent increases of at least one fold during the epidemic. What does this figure mean, Deputy President? There is something the Gini coefficient cannot explain. How come in this wealthy city of Hong Kong where the wealth gap is so wide, it still remains relatively peaceful? This figure and this phenomenon cannot be dealt with in the Budget. Why? Because they have gone beyond the scope of the Budget. If I am asked to comment on the performance of the two Chief Executives during their terms of office, I would say they are more or less the same but could have done better. Unfortunately, our incumbent Chief Executive now thinks that the most difficult time for Hong Kong is over.

Unemployment rate is another figure to be discussed. It now stands high at 7.2%, and I think it will be higher later. However, an official―probably HO Kai-ming―accused me of exaggerating the possible unemployment rate for the second half of the year in his response to a question. I told him that there was no exaggeration because that unemployment rate was a deferred figure following the introduction of the Anti-epidemic Fund by the Government. Furthermore, it has not yet included the number of "slashers". I also consider myself an unemployed person because, frankly speaking, I do not have a full-time job. Serving as a Member is my public service. Who would have expected the unemployment rate reached as high as 7.2%? This is the second highest unemployment rate in Hong Kong's history, the highest since SARS in 2003. Yet, the Chief Executive said that the most difficult time for Hong Kong was over. Was she kidding me? Two hours ago, Cathay Pacific Airways Limited ("Cathay Pacific") announced another layoff plan. Not long after its massive layoff of over 5 300 staff members last year, it is going to downsize again. However, we cannot blame Cathay Pacific for it is an enterprise. While the MTR Corporation Limited ("MTRCL") has confidently promised not to make any layoffs, it took money from the people's pockets. MTRCL vowed not to make any layoffs, but the general public are forced to accept a fare increase under the disguise of a fare reduction. We are now talking about the unemployment rate. Whatever happens in Hong Kong will remain in Hong Kong. Are there any exceptions? The exceptions are people who leave Hong Kong after the boundary crossing reopens and received their vaccination. Yet, the unemployment rate is right in front of us.

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There is also another astonishing figure which has only been briefly touched on during the scrutiny of the Budget. That is inflation. Inflation is a foreseeable problem in the coming one year or two. It has nothing to do with the Linked Exchange Rate, but is purely attributable to the lack of monetary control in Hong Kong. When other places print money, we will definitely suffer stagflation. When other places print money, our hard-earned money will worth less. It is possible that with $100, we may be able to buy only a box of roast pork rice. Just now, I bought a box of roast pork rice in Admiralty which cost $60, not including any drink. It is fairly cheap. If we look at the prices of raw materials, stagflation has caused the price of lumber to double in a year while soybeans and wheat have increased by 60% and 20% respectively. All these are the actual prices of raw materials and food items recorded at the beginning of this year, and have yet to take into account the situation at the end of this year when "there are signs of economic recovery". What will be the economic situation of different countries by then?

I am sure Members are very familiar with these basic figures. Let me go back to the Budget. If it is not the meeting today, we would have forgotten this Budget, thinking that it had been passed. The only thing that we can remember is the issuance of $5,000 electronic consumption vouchers to each citizen by instalments. My only comment on this initiative is: An ill-intentioned policy will not be well received. If this government initiative is intended to prop up the market through the hands of the masses, it would involve considerable transaction costs. The logic is simple, just elementary economics. In times of economic doldrums, will I be happy to receive a meagre subsidy from the Government to buy daily necessities? I have been tightening my belt. I may be happier if I use my savings to buy an iPhone because luxury goods have become comparatively cheaper. This is elementary economics. While it is right for the Government to "support" small and medium enterprises because they are in need of support, it is not time to prop up the market through the hands of the masses. An ill-intentioned policy will not be well received (The buzzer sounded) …

DEPUTY PRESIDENT (in Cantonese): Dr CHENG Chung-tai, your speaking time is up.

DR CHENG CHUNG-TAI (in Cantonese): … I so submit.

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MR WILSON OR (in Cantonese): Deputy President, regarding the Budget, first I wish to thank the Financial Secretary ("FS") for putting forward a number of initiatives in this Budget. Compared with the previous budgets, this one was especially difficult to draft.

During my neighbourhood visits, members of the public often asked me to put a question to FS―FS is not present today―why were there always discrepancies in FS's estimation of revenue and expenditure, that is, the so-called "making the wrong estimates", especially underestimating the surplus and overestimating the deficit? In fact, this is understandable. I believe by underestimating the surplus and overestimating the deficit, he could create more fiscal space for giving cash handouts or implementing initiatives, thereby ensuring better expectation management. While I believe he did so out of good intention, members of the public earnestly hope that this Budget will address the prevailing problems more directly.

Deputy President, apart from the overall estimates of revenue and expenditure of the Government, the Budget also gives a forecast about future first-hand private housing. This is the fourth Budget delivered by FS in his term of office. In his previous forecast for private housing, he usually used five years as a cycle. Just by some simple reckoning, it has been almost five years since 2017-2018. Deputy President made a general comment on the Budget on behalf of the Democratic Alliance for the Betterment and Progress of Hong Kong ("DAB") just now. As the spokesperson of DAB on housing affairs, I would also like to analyse some figures for FS in respect of housing and land, which is the area of my expertise.

Deputy President, the 2017-2018 Budget Speech reads, "Based on the preliminary assessment of private residential developments known to have started or to be started on disposed sites, the private sector will, on average, produce about 20 300 private residential units each year in the next five years, representing an increase of about 70 per cent over the yearly average in the past five years." From the time when the Budget was delivered in February 2017 up to 2021, a total of five years have elapsed.

Were there 20 300 completed units in each of the past five years? Believing in scientific evidence, I looked through the relevant information. According to the figures from the Rating and Valuation Department, the actual annual completion of private residential units in the past five years were 17 800, LEGISLATIVE COUNCIL ― 21 April 2021 5101

21 000, 13 600, 20 900 and 18 000 respectively. These are all actual figures except for 2021, which is a projected figure. Obviously, there is a wide discrepancy between the figures projected by FS and the actual figures in 2017. Not only is the annual average completion of private residential units less than 20 000, but is only 80%, that is, 18 000 units.

Deputy President, some people may think that it is normal to make wrong estimates as five years is a rather long time, and an annual shortfall of 2 000 to 3 000 units on average is not substantial, so we should not be nitpicking. However, one has to bear in mind that "many a little makes a mickle." Deputy President, I want to make one point clear. Although the Development Bureau is not the Policy Bureau overseeing housing matters or determining the target of private housing supply, it is an actual government agency in charge of private housing supply. All private housing from sources including urban renewal development projects, private rezoned sites and the sale of government sites, are under the purview of the Development Bureau. The Planning Department, the Lands Department and the Buildings Department under the Development Bureau are duty bound to set commencement dates of works, impose building height and plot ratio restrictions, approve building plans, pre-sale uncompleted flats as well as issue occupation permits and Certificates of Compliance.

The Transport and Housing Bureau oversees the housing policy and plays only the role of regulating sales brochures in the private housing supply chain, whereas the Development Bureau is in charge of the entire private housing supply. They are actually links in a causal chain. But what is the result? The result is that we are lagging far, far behind. Think about this: FS is the supervisor of the Development Bureau, so how can the public not blame him for "making wrong estimates"? As I recall, before FS assumed office in 2017 when he was in the post of the Secretary for Development, he made it clear that the Government would resume the lead in land supply, and FS is currently chairing the Steering Committee on Land Supply. However, so far since the Secretary for Development abolished the Application List system in 2013, the Government has failed to fully take the lead in land supply and the situation is deteriorating. Deputy President, during the period from 2013-2014 to 2016-2017, when FS was the then Secretary for Development, the land supply under government control from different sources, including the Government's Land Sale Programme, projects tendered by the Urban Renewal Authority and railway property development projects, averaged about 85% of the total land supply. However, during the four years after his promotion to the post of FS, land supply under 5102 LEGISLATIVE COUNCIL ― 21 April 2021 government control has shrunk to only 65% of the total supply. What is more worrying is that the area of government sites for sale is getting smaller. Deputy President, I have studied and examined it carefully. Among the 28 sites included in the 2017-2018 Land Sale Programme, 18 sites were capable of providing more than 500 units, while six sites were "mini sites", each of which had a capacity to provide only less than 100 units. I believe this ratio can hardly cope with the private market or private housing supply.

Over the past few years, property prices have soared and remained high. Even after the "black-clad violence" in 2019 and the epidemic, property prices have remained steady. I think one of the major factors is the Government's failure to respond to the changing market conditions and avert the current stalemate. Members of the public think that he just performs verbal manoeuvres in his forecasts every five years. To put it bluntly, the market could see that the Government had revealed its cards, with nothing to sell. As such, the present predicament may be hard to overcome within two to three years, and we can only leave everything to luck.

Deputy President, although there are not many government sites for sale, I guess that in reply to my question subsequently, the Secretary for Development will probably quote what he said in an announcement of the Land Sale Programme at the end of last month, i.e. the aggregate private housing land supply in 2020-2021 … is estimated to have a capacity to produce about 13 000 flats so far. This is more than the target set in the Long Term Housing Strategy ("LTHS"), meaning that the supply target is achieved, with various new development areas coming on stream in the future.

If the Secretary for Development or FS's colleagues have heard my speech, I hope they will respond to the following two points. The first point is that the land supply target of 2021-2022 can be met simply because the Government adjusted the public-private housing ratio from 6:4 to 7:3 in LTHS two years ago, that is, from 2019-2020 onwards, which has in effect substantially lowered the private housing supply target. This adjustment would not increase the actual public housing supply, but has rigidly suppressed private housing supply, resulting in a reduction in supply at both ends. I would like to ask the Secretary: Even if the land for the provision of 13 000 units can come on stream in 2021-2022 as scheduled, how will this make up the shortfalls in supply? What is the objective of formulating LTHS?

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The second point is that while the Budget enumerated each and every new development area from Kwu Tung North to Tung Chung East as if there is abundant supply, considerable doubt still exists as to when the sites will actually be included in the Land Sale Programme. Moreover, I notice that the Budget intends to convert several hotel sites into residential sites, so it seems that there may be a gap in private housing land supply in the next few years. Therefore, Deputy President, we should not be complacent, nor should we leave everything to luck. The fact before us is that another private housing supply crisis may arise. In any case, a responsible government must give more careful and detailed consideration to this issue. As many people have noticed, I am quite concerned about the issue of public housing. However, to follow up on the housing issue, we should examine from a myriad of perspectives and angles, so that the issue can be solved. We should at least remind the Government to change its mindset. Upon the improvement of the electoral system, adjustments can be made accordingly only when the SAR Government changes its mindset.

Deputy President, even if we fail to receive a reply from the authorities today, it does not matter; I will pursue with the Secretary for Development the question of whether the private housing land supply is on the verge of exhaustion. This is a question that the public is concerned about. I hope the Secretary will make more efforts. We will also make continuous efforts to resolve the deep-rooted conflicts in Hong Kong together.

Deputy President, I so submit.

MR SHIU KA-FAI (in Cantonese): Deputy President, I support this Budget. As everyone knows, a huge sum of money of over $300 billion was devoted to anti-epidemic support in the Budget last year. Many Hong Kong citizens also know that the current fiscal reserves are not that ample actually. Although the fiscal position is not that strong, I can see in this Budget that the Financial Secretary ("FS") has continued to provide support in various areas, including granting tax rebate to the middle class subject to a ceiling of $10,000, providing rent reduction to low-income earners, rendering support to recipients of Comprehensive Social Security Assistance, etc. Of course, the extent of support will definitely not be as large as that in the past, but it can at least show that the Government has not forgotten people from all walks of life despite the poor fiscal position.

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On development, FS will also give support to the Guangdong-Hong Kong-Macao Greater Bay Area and the Belt and Road Initiative of the country. As for the new four major industries, including the financial industry, the innovative technology industry, the aviation industry as well as the cultural and creative industry, the Budget has also touched on and the Government has not forgotten the development of these industries.

Regarding employment, I believe Members are all aware that the current situation in Hong Kong is very pessimistic, as evidenced by the high unemployment rate and the plights faced by many sectors in their operation. For this reason, I will not find it strange if the unemployment rate gets worse. In view of the employment situation, the Government introduced two support measures and one of them being the Love Upgrading Special Scheme. The Government has increased the quota for trainees to 20 000 in the third tranche of the scheme, and another 20 000 places will be provided in the fourth tranche of the scheme, enabling people to learn and obtain cash support at the same time. Besides, the eligibility criteria of the subsidy concerning online learning have also been relaxed so that more people can benefit from the scheme. Under the epidemic, trainees cannot attend classes, but they cannot benefit from the scheme and get cash support if they fail to attend classes. These measures were put in place to facilitate members of the public. As for the increase of job opportunities, this is also the Government's current direction in alleviating the unemployment situation. The Government has previously put forward an initiative to create of 31 000 temporary jobs, it will further provide $6.6 billion to create an additional 30 000 temporary jobs. I believe this will help alleviate the current situation where people from certain sectors find it difficult to get a job, so that these people can "keep themselves alive".

Of course, I will not praise all the proposals because nothing is perfect. For this Budget, Mr Frankie YICK and I have repeatedly mentioned the registration tax and licence fees for motor vehicles. We do not agree to increase either tax or licence fees at this moment. While the present fiscal situation is poor, the amount of money involved may only be $900 million or under $1 billion even if the first registration tax for motor vehicles is increased by 15%. This will not be of much help to the fiscal position actually. Moreover, an increase in the tax amidst such poor economic environment of Hong Kong will exacerbate the plights of the people selling motor vehicles, i.e. the motor traders associations that I represent, because the number of new vehicles imported over the past few years has been low. The days ahead of them will be even more LEGISLATIVE COUNCIL ― 21 April 2021 5105 difficult. At a committee meeting, we had suggested the government officials to defer the implementation of the policy for one year. We are not saying that the tax should not be increased, but only consider it not the right time to do so. Therefore, I hope the Government can consider it further in this session.

Returning to the main point, why will I definitely support this Budget? In fact, except for the aforesaid areas which receive less support, the Government has continued to support the business sector in various respects, including waiving licence fees and business registration fees. As for rent, tenants of government land will be offered a rental concession at 75%. People who have benefited from these measures told me that they are really thankful to the Government for its support during the course, so that they can take a break and preserve their jobs.

As I mentioned in the past, the Employment Support Scheme was implemented from June to November 2020 has helped a lot of companies. The scheme is very effective.

Besides, the Special 100% Loan Guarantee has also supported a lot of small and medium enterprises. During the meeting with FS last year, my teacher Vincent FANG particularly mentioned that if the 100% loan guarantee failed to be introduced and only the previous 80% or 90% loan guarantee was available, it might not be able to help business operators secure loans with their properties. The 100% loan guarantee has remained till now, and the amount of loan has been raised from the total amount of wages and rents for 12 months to that for 18 months, with the total amount increasing from $5 million to $6 million. Meanwhile, the maximum repayment period of the guaranteed loans has been increased from five years to eight years. Under Secretary Joseph CHAN, the money provided through these measures can help the industries tide over the current difficult times.

Upon the introduction of the 100% Personal Loan Guarantee Scheme by the Government, there will definitely be open criticisms from some members of the community, saying that this is high-interest loan or the Government is acting as an intermediary. Whatever the Government says will always be subject to criticisms. I believe these people may not have many friends who are grass roots or genuinely facing plights. Over the past one year, I have helped a lot of grass roots from various sectors, especially those from the massage and beauty industries which have been ordered to be closed. Many of them live from hand 5106 LEGISLATIVE COUNCIL ― 21 April 2021 to mouth and can no longer borrow money. After receiving this message, the Government has introduced the 100% Personal Loan Guarantee Scheme to provide the public with a maximum loan of $80,000. Although they need to repay the interest, the interest is very low and the interest payment will be returned to them upon repayment. I cannot think of any disadvantages of the scheme to the people in need, so I really hope those ill-intentioned people will stop portraying the good policies implemented by the Government as something bad.

Many Members have particularly mentioned the electronic consumption vouchers today. I am very glad to hear in this Chamber that Members from the pro-establishment camp have overwhelmingly supported the launch of electronic consumption vouchers. As I have said on different occasions, in 2008, former Member Vincent FANG proposed that the Government should launch consumption vouchers because the economic environment at that time was not very good. In 2012, Mr Tommy CHEUNG also proposed that the Government should launch consumption vouchers, but the proposal has not been agreed by the Government. Public feedback that the administrative costs or the costs of deterring forgery are high has rendered it unable for the consumption vouchers to be launched.

During our negotiation with the Government in early 2019, we also proposed the launch of consumption vouchers. However, we felt that the Government still had concerns in this respect, so we asked for the second best proposal of handing out cash. I think Members still remember the Government's cash handouts of $10,000 to all residents. When the Government handed out $10,000 to all residents in July 2020, the third wave of the epidemic broke out. Among the total cash handouts of $70 billion which each person received $10,000, how much has gone to the catering industry and the retail industry? People in the industries told me that not much has gone to them, and the figure also told us that the amount is not great. However, this does not mean that the cash handouts of $10,000 cannot help Hong Kong citizens. After all, they have received this sum of money. It is only that saving the money in banks may not help boost the economy very much.

For this reason, the proposed launch of electronic consumption vouchers that had appeared in the previous Budget is being brought up again in this Budget, and will model on Macao. The arrangement adopted by Macao is very LEGISLATIVE COUNCIL ― 21 April 2021 5107 simple. An electronic consumption voucher of $300 was disbursed every day, which added up to $3,000 in 10 days. The vouchers were disbursed in the form of a card. In fact, it can be seen that they have significantly boosted the economy.

I am very glad about the launch of electronic consumption vouchers with a total value of exactly $5,000 by FS. If Members search on the Internet, they will find that when I put forward the relevant proposal in January, countless people attacked me, saying that the electronic consumption voucher scheme proposed by me was not feasible and could not help members of the public. When the Government introduces the scheme, members of the public will have additional $5,000 available for use anyway. Some people complained that the electronic consumption vouchers cannot be used for paying rents. However, apart from paying the monthly rental, they can be used to buy things or daily necessities. We all need to brush our teeth, right? If they use the money allocated for buying daily necessities to pay rent, the electronic consumption vouchers can then be used for purchasing daily necessities instead. This scheme will not cause great harm to the public. In any case, it is a policy benefiting the community and can help members of the public.

Some people asked: Why must Octopus be used? The Government has now introduced four platforms, with Octopus being one of them. For citizens who are using Alipay, WeChat and Tap & Go, they can still make payments using their mobile phones. Some elderly people felt sad about not having a mobile phone, so what should be done? The authorities may issue each of them an Octopus card for consumption. If everyone has an Octopus card, why do some people still "boo" publicly? I really do not understand.

I wish to say to all people that at this moment, everyone must stand united for the sake of Hong Kong. We must strongly support good policies to let more members of the public understand, so that government officials can implement more policies more happily and confidently. If members of the public only make criticisms whenever the Government plans to implement some policies, what can it do? For the sake of Hong Kong, please have empathy. I very much support the launching of electronic consumption vouchers proposed by FS, which will certainly bring great benefits to Hong Kong.

Thank you, Deputy President.

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MR FRANKIE YICK (in Cantonese): Deputy President, in order to ease the financial burden of enterprises and members of the public, the Financial Secretary ("FS") has, in this year's Budget, proposed to allocate over tens of billions of dollars for continued implementation of some relief measures, including reducing personal taxes and corporate profits tax as well as providing rates concession. The Liberal Party is supportive of this proposal. Nevertheless, compared with last year's relief measures which involved over hundreds of billions of dollars, the magnitude of this year's package is obviously much reduced.

The logistics sector welcomes the Government's grant of 75% rental or fee concession currently applicable to short-term tenancies and waivers. However, the concessionary arrangement will only remain in place until September this year, and the ceiling of profits tax reduction has been lowered from last year's $20,000 to $10,000. The Government indicated that it could only spend within its means in the face of a fiscal deficit, but the Liberal Party disagrees that the Government lacks money. In fact, the Government received an investment income of as much as $197.8 billion from the Exchange Fund last year. If the practice of the Future Fund is followed, $100 billion of the income can be allocated to roll out stronger relief measures provided that the financial system of Hong Kong is not affected.

The "black-clad violence" in 2019 and the COVID-19 outbreak last year have dealt a heavy blow to Hong Kong's economy, and many industries have languished consequently. As the epidemic situation has subsided recently, there are now more people on the street. And yet, the overall business environment remains poor, and the hard-hit industries have yet to regain their vigour, so relieving the financial burden on enterprises is still the top priority. For this reason, I hope the Government will consider increasing the magnitude of the relief measures such as by extending the provision of rates concession of $5,000 for non-domestic properties to the third and fourth quarters, and extending the grant of rental or fee concession for short-term tenancies and waivers to March next year, i.e. until the end of the financial year 2021-2022.

The Hong Kong Monetary Authority announced in early March that the Pre-approved Principal Payment Holiday Scheme, which covers all corporate loans including commercial vehicle loans, would be extended for another six months to October this year. Nevertheless, since it is up to the banks to decide whether loan repayment can be deferred, and the banks adopt a conservative approach to risk management, many commercial vehicle owners are concerned whether the principal payment holiday will really remain available when their LEGISLATIVE COUNCIL ― 21 April 2021 5109 loans are due in late April. Therefore, I hope the Government will enhance liaison with banks to assist vehicle owners in need as far as possible. If there is no noticeable improvement in the business environment afterwards, we certainly hope that the scheme will be extended again.

The Liberal Party is disappointed that the Government does not consider implementing the enhanced Employment Support Scheme ("ESS") again to subsidize employers to pay wages of employees. The Government allocated $80 billion to launch ESS under the second of the four rounds of Anti-epidemic Fund measures. Many operators in the shipping and logistics industries have relayed to me that the six-month wage subsidy provided for employers under ESS has been the greatest help to them and met the objectives of "supporting enterprises and safeguarding jobs". In particular, cross-boundary passenger service operators, who have had zero income due to closure of boundary control points, can still keep their companies alive and preserve the jobs of their employees with the aid of ESS.

Since ESS came to an end in November last year, a wave of staff layoffs and company closures has gradually emerged. The latest unemployment rate has climbed from 6.6% to a 17-year high of 7.2%, with over 250 000 people unemployed. We can see how severe the situation is. As I have just mentioned, the Government does not lack money and is certainly capable of rolling out another tranche of ESS to tide enterprises over the hard times.

The Liberal Party is disappointed that the Budget makes no mention of providing a business resumption allowance for the cross-boundary passenger service sector. As the epidemic has been raging for over one year since the outbreak last year, cross-boundary sea and land transport services for passengers have been suspended for over one year. This sector is one of the few sectors that have got no income at all, but service suspension does not mean no expenses. Although the Government has provided some subsidy for the sector, it is just a drop in the bucket. With vaccination underway in the Mainland, Macao and Hong Kong, resumption of cross-boundary travel will not be far away. However, since cross-boundary vehicles and ferries have lain idle for a long time, the sector has to carry out maintenance and repair works to all mechanical parts afresh for the sake of safety. Yet, after having zero income for over one year, the sector is at the end of its tether. I hope the Government may consider providing a business resumption allowance for the relevant sectors to get prepared for resumption of cross-boundary travel.

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FS has proposed to increase the first registration tax ("FRT") rates and vehicle licence fees for private cars by 15% and 30% respectively with a view to controlling the increase in the number of vehicles and alleviating the road congestion problem. The Liberal Party is of the view that the Government has made the wrong diagnosis and prescribed the wrong medicine by imposing prohibitive levies to ameliorate the road congestion problem. In fact, past experience has shown that increasing taxes is not effective in controlling vehicle growth and the effects are short-lived. Road congestion is attributable to a number of factors including illegal parking, insufficient parking spaces, inadequate public transport services, delay in road development, and the prevalence of illegal "white licence cars". The Government should first address these issues, and provide additional resources to enhance public transport services such as by providing more pick-up/drop-off points for public transport, designating "public transport-only lanes", providing toll exemption for public transport services upon the implementation of an electronic road pricing scheme, thus encouraging people to use public transport and discouraging them from driving private cars. Moreover, in these days of economic gloom, it is definitely not the right time to raise tax and licence fees. Therefore, I hope the Government will consider postponing the implementation of this proposal.

To ameliorate the roadside air pollution problem, the Government has proposed to raise the maximum FRT concession for electric vehicles ("EVs") under the "One-for-One Replacement" Scheme to $287,500. The Liberal Party welcomes this proposal. However, since the Government plans to cease the new registration of fuel-propelled private cars in 2035, it should take this opportunity to step up its effort in promoting the use of EVs in these 10-odd years. Apart from continuing to expand the EV charging network, the Government may also consider further raising the maximum FRT concession for EVs, thereby providing an economic incentive to encourage more vehicle owners to switch to EVs.

The Liberal Party also expresses support for the Government to earmark $80 million and $350 million to conduct trials on electric public light buses and electric ferries respectively. Yet, the Government must consider the practical operational issues that will arise after the successful completion of trials, and must not simply pass the ball to the court of the operators and sit on its hands after that. In fact, the preliminary view of the participating operators is that while they are happy to collaborate in the pilot use of green public transport vehicles, they are concerned about the future operating costs. As the former Secretary for the Environment Edward YAU had pointed out, environmental LEGISLATIVE COUNCIL ― 21 April 2021 5111 protection came at a cost. But should the relevant costs be solely borne by the operators? Can they afford the additional costs? I opine that the Government must consider the relevant issues when implementing the pilot schemes.

The Liberal Party supports the proposal to issue electronic consumption vouchers with a total value of $5,000 to each eligible member of the public. According to the Government, the coverage of electronic consumption vouchers does not include public transport because with the Public Transport Fare Subsidy Scheme ("PTFSS") in place, allowing the use of the vouchers on public transport would result in double subsidy. However, not all public transport operators are taking part or able to take part in PTFSS. As the consumption vouchers aim to encourage local consumption, which includes taking public transport, I hope the Government will consider relaxing the restriction on the use of the vouchers so that people can use them on the public transport which has not been covered in PTFSS.

The Budget makes little mention of the logistics industry. But as FS has remarked, if Hong Kong can seize the opportunities brought by the National 14th Five-Year Plan, the development of the Guangdong-Hong Kong-Macao Greater Bay Area and the Belt and Road Initiative, and succeeds in gaining accession to the Regional Comprehensive Economic Partnership which will come into effect, this will be conducive to reinforcing Hong Kong's role as the transhipment hub in the region and facilitating the development of the logistics industry. I hope that, to cater for the development of the logistics industry, the Government will give the industry more support, or at least provide sufficient land to the sector for development. The sector has been facing the problem of insufficient land for many years. In the past, the Government proposed to reserve sites for logistics development but has failed to honour its promise. The sector could have used brownfield sites, but many of them have been resumed for development and sizeable modern storage houses have been forced to relocate in recent years, as part of the Government's attempt to tackle the problem of housing shortage. However, the Government has not provided alternative sites, making the operation of the trade increasingly difficult. If the Government intends to develop Hong Kong into a storage, logistics and distribution hub for high-value goods, it should not neglect the needs of the logistics industry (The buzzer sounded) … in the planning of land.

5112 LEGISLATIVE COUNCIL ― 21 April 2021

DEPUTY PRESIDENT (in Cantonese): Mr Frankie YICK, your speaking time is up.

MS YUNG HOI-YAN (in Cantonese): Deputy President, under the pandemic, Hong Kong's economy has already experienced recession for two consecutive years. The unemployment rate now stands high at 7.2%, while the underemployment rate also rises to 4%. During the consultation period of this Budget, the New People's Party suggested the Government to roll out a half-year unemployment assistance scheme to provide an assistance of $6,000 per month to people who lost their jobs amidst the pandemic. But regrettably, this suggestion was not accepted by the Financial Secretary ("FS"). The Government must be thinking in this way: "Though we cannot give you an orange, we can offer a tangerine to fill your tummy instead." However, can unemployment assistance really help people? Actually, it cannot. A survey indicates that there were 130 000 unemployed persons with 13 000 applicants for unemployment assistance as in February last year; yet in this February, the number of unemployed persons increased to 260 000 with only 19 000 applicants for unemployment assistance, accounting for less than 7.5% of the overall unemployment population. That is to say, while it is not possible to give people oranges, not everyone may get a tangerine either. This is very disappointing.

The fiscal year ending soon has a deficit of over $250 billion, and next year's deficit is estimated to be over $100 billion. Even with a deficit, the fiscal reserve of the Government still stands at a robust level of $902.7 billion as at 31 March 2021, which amply indicates local Government's financial and aggregated economic strength. Certainly, in order to increase the Government's revenue, the Budget also proposes to increase the rate of stamp duty on stock transfers. This will yield to the Treasury a revenue of $12 billion, thereby enhancing the Government's strength in supporting the economy.

Very regrettably, not only does this year's Budget fail to help the middle-class people, it even victimizes them. The middle class also faced salary freeze, pay cut and even layoff during last year's adversity. However, the Budget proposes that the ceiling of the reduction of salaries tax and tax under personal assessment will be just $10,000; the rate of each tax band for the first registration tax for private cars will even be increased by 15%, and the vehicle licence fee will also be increased by 30%. This will greatly increase the burden on the sandwich class. The Government accepted our proposal to release LEGISLATIVE COUNCIL ― 21 April 2021 5113 electronic consumption vouchers of $5,000 to the citizens, with the scale reaching $36 billion. Certainly, the Government also explained that the purpose of this measure is to stimulate consumption in the local economy, so as to benefit both members of the public and enterprises. Although we are so glad about this, we notice that the Government will implement the measure in instalments with a validity period. I have asked many citizens and learnt that they all had strong views on this arrangement. They hoped that the Government can provide the electronic consumption vouchers in one go, so as to allow them to flexibly dispose of this $5,000.

Deputy President, it has been a year since the outbreak of the pandemic. During this long period of time, we have time and again reflected to the Government, including the Chief Executive, the Chief Secretary for Administration and FS, that many members of the public and families had encountered serious stress problems during the pandemic. With tremendous pressures and mental perplexities in dealing with financial issues, disciplining children, handling the relationship with spouses, taking care of ill family members, etc., they are vulnerable to be emotionally volatile. This seriously affects their mental and psychological health. I hope the Government can put in resources as early as possible to care about the mental health of citizens from different strata of society. I know the Government has already stated in the Policy Address that it will allocate $300 million to the districts to deal with mental health issues of the public. FS also allocates $147 million in the Budget for enhancing a number of psychiatry-related services. We hope the Government can implement these services as soon as possible and allocate additional resources to different district groups, so as to let them do a good job in delivering their district work.

Deputy President, a recent case in which a child died due to abuse has aroused public concern about the child abuse problem. My heart aches badly about it. I hope the Government can step up its concern about child abuse and tackle it by all means. The Law Reform Commission of Hong Kong has also advocated the introduction of the offence of "failure to protect" to make the failure to report child abuse cases a liable act. I support this so much, and hope that FS will consider setting up a dedicated fund to provide additional resources to the education sector as well as some child abuse concern groups and organizations. I also hope that proactive measures will be adopted to prevent child abuse cases through the two-pronged approach of introducing legal and protective measures.

5114 LEGISLATIVE COUNCIL ― 21 April 2021

Deputy President, in order to achieve success in reviving Hong Kong's economy, there must be a safe political and social environment. In last June, the Central Authorities stepped in and took timely action to enact and implement the National Security Law, which is followed by enhancing the electoral system to respond to the expectation of the general public. With the Central Authorities taking the initiative to throw "combination punches" by introducing two major legal and institutional measures, Hong Kong's years-long political chaos came to an end and the attempts made by anti-China disruptors to seize power were smashed. The provision of robust legal basis and institutional safeguard at the Central Government level that cannot be challenged has enabled Hong Kong to fully implement the principles of "patriots administering Hong Kong" and "one country, two systems", such that it can focus on the development of the economy and people's livelihood, thereby making a good start for Hong Kong's long-term stability and prosperity. Members of the public even describe the two major measures of the Central Authorities as the sharp sword and hard shield for maintaining social stability and safeguarding the future of Hong Kong.

The Central Authorities directly addressed Hong Kong's worries and predicaments, and even helped us develop and take on a good momentum. The SAR Government and various sectors of Hong Kong must stand united. On the one hand, the Government should make good efforts in doing its explanatory, legislative and electoral work to strive for the implementation of "patriots administering Hong Kong" and safeguard national security with full strength, so as the steadfast and successful implementation of "one country, two systems". On the other hand, the Government should make good use of the data to formulate high-quality policies, so as to win popular support and achieve reunification of people's hearts.

At the special meeting of the Finance Committee held last week, Members expressed concern about some important statistical figures and data, e.g. figures on small houses and small house concessionary rights, custody and maintenance payments involving divorce, and the number of Hong Kong residents working and starting up businesses in the Mainland. However, the Government could provide none of them. This is definitely an integral part of the formulation of good and down-to-earth policies. Hence, there are obviously deficiencies in the policy mechanism of the SAR Government, especially in respect of the application of big data, which resulted that many of our economic and livelihood policies are seemingly divorced from reality.

LEGISLATIVE COUNCIL ― 21 April 2021 5115

In fact, statistics are conducive to the Government's analysis of the social condition and understanding of the needs of different trades, enterprises, strata, etc., thereby facilitating the research, discussions and decision-making of the Government and different sectors of the community. In so doing, we can remove the obstacles for existing policies on the one hand, and on the other hand, assist the Government in formulating better policies. The SAR Government obviously possesses the biggest database in Hong Kong, but has not made good use of it. As a result, the Government has failed to respond to people's hearts and views all over the years, let alone achieved the reunification of people's hearts.

Apart from duly collecting local data, the Government should also analyse the data of the Guangdong-Hong Kong-Macao Greater Bay Area ("GBA"). Hong Kong must complement the 14th Five-Year Plan, get hold of the overall national development, seize the opportunities presented by the development of GBA, give full play to our advantages under "one country, two systems", drive GBA to become an important bridgehead in the domestic and international dual circulation, thereby maintaining our position as the world's leading financial centre and a base of innovation and technology. Therefore, it is necessary for GBA to establish an economic sharing platform, with the long-term target being the formation of an organic regime for the flow of resources, protection of interests and sharing of information in GBA. Hong Kong should do well in its big data work to facilitate the connectivity and cooperation amongst various professions in Guangdong, Hong Kong and Macao.

Deputy President, the COVID-19 epidemic situation still persists. Many people hope that cross-boundary travel can be resumed as soon as possible for the early recovery of the economy. Wage earners hope that there are still jobs for them, so they do not need to bother about housing issues. It is many people's biggest wish to be able to live peacefully, work happily and lead a stable life. Therefore, I hope that the Government will clearly find out public sentiments and gauge public views. And, by adopting a people-oriented approach and putting in more resources, it will spread love and care to each and every policy and estimate, with a view to gradually establishing a caring model that is conducive to the long-term economic development of Hong Kong.

With these remarks, I support the Appropriation Bill 2021.

5116 LEGISLATIVE COUNCIL ― 21 April 2021

MR TONY TSE (in Cantonese): Deputy President, I speak in support of the Second Reading of the Appropriation Bill 2021. Financial Secretary ("FS") Paul CHAN dressed up as a chef in the publicity videos for Budget consultation this year. Some people immediately have the thought that in the face of severe fiscal deficits this year and the year before, even the best chef of the Government can only prepare meals with limited ingredients. Some people even worried whether FS as a chef would turn out to be "Ah Mo1 making cakes", i.e. making new shapes out of none.

In fact, as I said after the Budget was announced, while there was a serious economic recession under the impacts of "black-clad violence", the epidemic and a record-breaking fiscal deficit of more than $250 billion last year, I think FS manages to "prepare good meals with limited ingredients" to help tide over difficulties together. And, following the principles of spending appropriately and "more contributions by the capable ones", he has put forward a number of measures to "stabilize the economy, create employment opportunities and relieve people's burden" as well as broaden sources of income and cut expenditures.

Under the principle of spending appropriately, the Government has responded to the views expressed by the architectural, surveying, town planning and landscape sectors and me and undertook to maintain more than $100 billion of infrastructure investment each year, so as to stimulate the economy and create jobs. The Government has also earmarked $550 million to optimize country park facilities, improve 10 popular hiking trails and carry out a number of cultural, recreational, health, environmental protection and community-based livelihood projects to help Hong Kong become a healthier and more liveable city.

The COVID-19 epidemic situation has highlighted the problems of ageing buildings and the spreading of virus by drainage pipes. The Government thus adopted another proposal put forward by the industry and I to earmark $1 billion in the Budget to provide subsidies for owners of more than 3 000 old buildings to carry out drainage repair works. It will also take the initiative to carry out the works concerned for the "three-nil" buildings. With the suspected spread of more infectious mutant strains in the community, I hope that the relevant work can be expedited. This will also help increase jobs and employment opportunities in the construction industry and ameliorate the high unemployment rate in the industry, thereby achieving multi-faceted effect.

1 "Mo" is the middle name of Paul CHAN Mo-po in Chinese. LEGISLATIVE COUNCIL ― 21 April 2021 5117

In alleviating people's hardship, the Budget of this year manages to retain a number of relief measures targeting at individuals and businesses though there are limited ingredients. For instance, it continues to provide salaries tax, profits tax and rates concessions; grant each residential electricity account a subsidy of $1,000; raise the loan ceiling of the SME Financing Guarantee Scheme and extend the repayment period. A new measure in the Budget is the issuance of electronic consumption vouchers with a total value of $5,000, but the scheme will only be rolled out in this summer vacation. The related work should likewise be expedited and the procedures for registration and use should also be streamlined as far as possible for the convenience of consumers and shop operators.

Regarding the problem of high unemployment rate, the Budget proposes to set up a 100% Personal Loan Guarantee Scheme with a loan amount ceiling of $80,000 for the unemployed people affected by the epidemic and allocate $6.6 billion for the creation of about 30 000 time-limited jobs. As the work of the former scheme has been assigned to banks, it can be implemented this month. Does this reflect a difference in efficiency between the Government and private enterprises? The industry and I strongly support the creation of time-limited jobs. When people are employed, they will naturally have money to spend and they do not need to rely on the Government's cash handouts and consumption vouchers.

The Government has previously responded to the requests of the industry and I to subsidize, through the Anti-epidemic Fund, private enterprises for the employment of graduates and assistant professionals in the architectural, surveying, town planning and landscape sectors. Last year, the Government assisted 1 400 young practitioners in the sectors. I hope that these time-limited jobs can help young practitioners who are graduating this year and are preparing to obtain professional qualifications, so that they will not be unemployed upon graduation or miss the opportunity to receive training to become professionals.

As to broadening revenue sources, the Budget has also adopted my proposal of moderately raising the rate of stamp duty on stock transfers ("stamp duty") and the first registration tax on private cars. Deputy President, tax increase has never been welcomed and it is not a question of whether the time is appropriate for tax increase. I therefore beg for the understanding of the affected people and industries.

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While the Budget proposes to study introducing a progressive element to the rating system, I think the Government should also study increasing the stamp duty on property transactions involving "super-luxurious flats" at prices of over $50 million or $100 million. At the same time, it should also lower the stamp duty on low- and medium-priced properties so that the stamp duty increases for higher-priced properties but decreases for lower-priced properties. This will increase the Government's tax revenues on the one hand, and on the other hand facilitate people to acquire their first property or replace their existing property. This is consistent with the principle of "more contributions by the capable ones" and the overall interests of Hong Kong which I have always advocated.

In regard to boosting the economy, the Budget emphasizes that Hong Kong must grasp the major changes in the world when the economic gravity is shifting from West to East; give full play to the advantages of "one country, two systems"; make good use of the development opportunities of the Motherland, and focus on the development of the financial services industry and the innovation and technology industry. The Budget also proposes a number of measures to assist the construction industry of Hong Kong to train up talents, manage costs, enhance efficiency, and promote digitalization of public works. I think the development direction is definitely right, but the Government must live up to its words and expeditiously get the job done properly.

Deputy President, I have repeatedly asked the Government to expedite its work when I spoke a while ago. The Government did propose many commendable policies and measures in the past few years, but people still have an impression that it was slow in implementation, or the policies and measures had been "deformed" and "distorted" in the course of implementation. Worse still, many projects have the problem of "deliberation without decision; decision without action; and action without effect". For example, some infrastructure projects have been delayed for seven or eight years, or they remain at the stage of study, planning, and consultation after more than a decade. How can the public be satisfied?

I touched upon the relevant matters at the previous Motion of Thanks debate in respect of the Policy Address. When Members asked about the progress, government officials often replied that the work was in progress and would be expeditiously implemented with shortened lead time, but they failed to provide clear schedules and indicators. A few years later, the officials concerned might have been transferred or retired, who would be held accountable to the public then?

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In addition to the public's impression that civil servants are slow in action, another impression is that government departments keep "passing the ball", including shirking responsibilities, rejecting work and passing work to other departments. There is a myriad of government policies and departments are doing things their own ways. In many instances, government officials were evasive in the face of difficulties, which had been fully exposed during the "black-clad violence" and the epidemic in recent years. I found that there have recently been improvements in this regard, but the most important of all is to prove to the public with facts that the Government has made major changes in this respect. Only in so doing can the Government win people's hearts.

In light of the illegal "black-clad violence" and political chaos in Hong Kong in recent years, the Central Government has thrown "combination punches" by introducing a package of legal measures. It seeks to stop violence and curb disorder in Hong Kong through the National Security Law and bring our society from chaos to governance. It also seeks to improve the Hong Kong electoral system through the Decision of the National People's Congress by plugging the loopholes for constitutional development of the SAR so as to bring order out of chaos. However, a failure to carry out fundamental reform to our bureaucratic system to enhance efficiency and strengthen accountability, or a failure to resolve the outstanding land and housing problems, would leave the quality of people's living remain unchanged. In that case, acceptance and support of the Government can hardly be enhanced and the prosperity, long-term peace and stability of Hong Kong will also be undermined. These issues must not be taken too lightly.

I so submit.

MR WONG TING-KWONG (in Cantonese): Deputy President, Hong Kong's economy has been hard hit after being dealt double blow by "black-clad violence" and the Coronavirus Disease 2019 successively in recent years. In response to the epidemic, the SAR Government has spent more than $300 billion of public coffers to introduce a large number of anti-epidemic measures, resulting in a reduction of Hong Kong's fiscal reserves from more than $1,200 billion in the year before last to the current balance of just over $800 billion.

Despite the fiscal deficit, Financial Secretary ("FS") Paul CHAN has still managed to set aside more than $30 billion in this year's Budget to hand out electronic consumption vouchers worth $5,000 to all eligible citizens aged 18 or 5120 LEGISLATIVE COUNCIL ― 21 April 2021 above. The vouchers do not only ease the financial pressure faced by the general public due to the current economic downturn, but also benefit the catering, retail and other industries which are currently facing difficulties. The multiplier effect of the vouchers may possibly become a driving force for Hong Kong's future economic recovery. I consider this initiative to be a benevolent policy. Of course, for any benevolent policy to effectively benefit the general public and achieve its intended goal, it is essential for the authorities to gauge the views of the general public extensively before its formulation. It has to go through prudent and detailed deliberations before a thorough and effective implementation approach can be mapped out. There should be no room for slapdash work. Otherwise, the policies will only become counterproductive, and may even cause widespread public grievances against the Government.

(THE PRESIDENT resumed the Chair)

In retrospect, there are quite a few deficiencies in the series of anti-epidemic policies and measures introduced by the SAR Government by deploying substantial resources in the past year. The authorities have shown a lack of careful consideration in the formulation process; and the policies and measures have been implemented in a lax and slipshod manner. For instance, the wage subsidy scheme aimed to support enterprises and safeguard jobs introduced in the middle of last year has been subject to criticism. As I understand it, the SAR Government felt obliged to introduce extraordinary measures back then to stabilize various trades and industries, so as to prevent the unemployment rate from soaring and causing social unrest. However, when formulating the measures, the authorities have failed to focus on supporting the most hard-hit industries. Instead, they have adopted a simple, across-the-board and easy-to-operate approach to providing support to all industries. Consequently, some sectors, especially supermarkets and property management companies which have remained unaffected or may have even seen a marked turnover growth during the epidemic, unexpectedly received unnecessary subsidies. Meanwhile, some hard-hit industries, such as the catering, bar, tourism and beauty industries which have been forced to close for a long time during the epidemic, have been given far from adequate assistance. The enterprises and practitioners in these industries have been left struggling to keep their heads above water, and some have even been forced to close down. The LEGISLATIVE COUNCIL ― 21 April 2021 5121 public will inevitably be discontented. In view of this, the authorities must learn from the lesson when giving out the electronic consumption vouchers to avoid reoccurrence of the aforesaid situation.

Undoubtedly, as the saying goes, "it is better to teach someone how to fish than to feed him with a fish", and "blood creation is better than blood transfusion". The SAR Government is still facing a fiscal deficit. Instead of providing continuous financial assistance to various industries, the Government should take strong and effective measures to overcome the epidemic expeditiously, so that the Hong Kong community can get back to normal and our economy can be revitalized as soon as possible. To this end, the SAR Government must step up efforts to mobilize the public to get vaccinated in order to achieve herd immunity, so as to prepare for the resumption of people-to-people exchanges with other places, as well as for full economic recovery.

The epidemic will pass one day. How can Hong Kong regain its momentum for economic development and sustain its prosperity and stability after the epidemic? This is a difficult question which the SAR Government and the Budget have to answer. However, this year's Budget has apparently failed to provide a clear answer to this question. In view of this, the SAR Government and FS should formulate a long-term plan for Hong Kong's economic development. We may follow the example of the Mainland which has been formulating comprehensive development plans every five years. By doing so, Hong Kong people and various trades and industries will have a better goal for their future life, Hong Kong's society can develop in a direction towards stability, and the SAR Government can achieve steadfast and successful administration.

In addition, an important inspiration drawn from this year's epidemic is that the revenue of the Hong Kong Government will not always go up, and that we should not always take a fiscal surplus for granted. It is high time for the SAR Government to be truly prudent in managing its finances and make strenuous efforts to increase revenue and reduce expenditure. In this year's Budget, the SAR Government has only taken some untimely measures to raise revenue, such as raising the rate of stamp duty on stock transfers, and the first registration tax and license fees for motor vehicles. The force to implement measures to cut expenditure is also inadequate.

Although this year's budget has not proposed any overly ambitious measures to increase tax, the SAR Government's proposals to increase tax will only give the public an impression that it is "taking umbrellas away on rainy 5122 LEGISLATIVE COUNCIL ― 21 April 2021 days" under the current dire economic environment of Hong Kong. The SAR Government should therefore be extremely cautious when it comes to raising taxes. After failing to live up to public expectations in boosting revenue, the SAR Government should make extra efforts to cut back on expenditure. The SAR Government has pledged not to increase the civil service establishment in the next three years by keeping it at about 180 000. However, it has been the SAR Government's common practice to create directorate posts and recruit additional civil servants upon launching a new project or introducing a new policy. Under the current situation, it is incumbent on the SAR Government to reverse this practice and rationalize departmental operations in order to enhance its operational efficiency and reduce unnecessary expenses.

Last but not least, the National People's Congress has already implemented the Law of the People's Republic of China on Safeguarding National Security in the Hong Kong Special Administrative Region and improved the electoral system in Hong Kong, which will put the local political environment back onto the right track. I hope that the Executive Authorities and the Legislature will cooperate and monitor each other in future, so that the Government can put its resources to better use, become more down-to-earth and bring more benefits to the general public.

With these remarks, President, I support the Appropriation Bill 2021.

MR VINCENT CHENG (in Cantonese): President, I wish to thank Financial Secretary ("FS") Paul CHAN for delivering such a difficult Budget in February when Hong Kong was still in a difficult time. According to FS, the Budget focuses on stabilizing the economy and relieving people's burden. It aims to alleviate the pressure caused by the economic downturn and the Coronavirus Disease 2019 ("COVID-19") epidemic through the introduction of counter-cyclical measures costing $120 billion. Of course, people are more concerned about the $5,000 consumption vouchers. I hope the Government will make good preparations to ensure the efficient distribution of the vouchers to the public, thereby benefiting the wet markets, hawker stalls and the grass roots in general and boosting grass-roots spending. The general comment of the Democratic Alliance for the Betterment and Progress of Hong Kong ("DAB") on this Budget is, "It is committed to stimulating the economy but deficient in unemployment support".

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President, there are two major structural contradictions in Hong Kong society that need to be resolved: one is poverty, and the other is housing. As mentioned in my speech on the Appropriation Bill last year, the budget is a good chance for redistribution of social resources. We are all aware of the fact the Government has spent nearly $300 billion on various relief measures during the anti-epidemic period. While the Government's resources are not unlimited, there is still room for improvement in some of the measures, especially in supporting the unemployed and underemployed.

President, as the speaker of DAB on manpower issues, I will first talk about the inadequacies of the Budget in terms of unemployment support. The Government is unwilling to introduce short-term unemployment assistance that has been agreed by a number of Members. I believe Members are disappointed. This decision may also push more families to the brink of poverty.

President, the unemployment rate for the latest quarter will be announced tomorrow. According to some academics, the unemployment rate of 7.2% is likely to rise further. The unemployment rate of 7.2% means 260 000 persons are unemployed. It is not a cold figure but represents quite a number of families. The underemployment rate has also risen to 4%, meaning that 154 000 persons are underemployed, and is a new high in 17 years. What do these figures indicate? I would like to quote from a survey analysis conducted by the Hong Kong Council of Social Service ("HKCSS") in February. HKCSS analysed the data on unemployment and underemployment in the third quarter of last year. It was found that about 40% of the unemployed and underemployed households fell into poverty, with the median duration of unemployment reaching 108 days, i.e. more than three months, and that only a quarter of the unemployed below the poverty line are receiving the Comprehensive Social Security Assistance ("CSSA").

Last week, I saw several dozens of people queuing at the entrance of a food bank in Shek Kip Mei. Quite a number of them were young persons and young families. I was really sad to see this. In contrast, in the midst of the year-long epidemic, various places such as the United Kingdom and Singapore have introduced short-term unemployment assistance on top of their existing unemployment protection systems. The Government subsequently relaxed the asset limits for the CSSA unemployment assistance, but there has been no notable increase in the number of applications so far. The Budget has introduced the 100% Personal Loan Guarantee Scheme ("PLGS") to render some help to the 5124 LEGISLATIVE COUNCIL ― 21 April 2021 unemployed, but the money borrowed has to be repaid. After the Finance Committee had approved the allocation of $15 billion for the loan, we received public enquiries about when PLGS will be open for application. We hope that the Secretary will give an account as soon as practicable. Moreover, we will not abandon the idea of introducing short-term unemployment assistance, i.e. offering a monthly subsidy of $6,000 for a period of six months. Application will be open to all unemployed persons, and the expenditure involved will only be $10 billion. I hope the Government will do some serious calculations. If it is deemed infeasible, will the Government consider using the Community Care Fund or a matching fund to solve the problem instead?

President, as regards the housing problem, the most direct approach to alleviate poverty is to increase public housing supply. Recently, I noticed that 29 years ago, there was a film called Cageman, which is the reflection of a "cage home" in Tai Kok Tsui. Almost 30 years later, there are still a lot of people residing in such inadequate housing, which is also known as subdivided unit and "space-capsule bedspaces". These are actually "cage homes", except that they have a toilet attached. After a lapse of 30 years, the community still fails to provide these people with adequate housing and improve their living conditions, though about half of them have already applied for public housing. The Budget also mentions housing supply, indicating that about 100 000 public housing units will be provided in the next five years. However, with the supply of public housing falling short of the target every year, people do not know whether they should believe the vague promise of maintaining the waiting time of three years for public housing units. Therefore, I hope the Government will try its best to catch up with this target so that members of the public can be allocated a unit as soon as possible.

At present, there are still 100 000 households, that is, 220 000 persons residing in subdivided units, cubicle apartments, "cage homes" or "space-capsule bedspaces". I am grateful to the Government for accepting DAB's proposal to increase transitional housing supply, which includes renting guesthouses for use as transitional housing, the implementation of tenancy control on subdivided units, and the introduction of a rent subsidy from June this year. We hope that these measures will be effective. The living conditions of subdivided units are poor, but the rent per square foot is higher than that of luxury flats. It is now high time for regulation, which is a social consensus. DAB agreed to the proposal that after two years of tenancy, the rate of rent adjustment shall be subject to the percentage change of the rental index of the Rating and Valuation LEGISLATIVE COUNCIL ― 21 April 2021 5125

Department. However, many members of the public considered that the cap of 15% too high. Given that the rent of subdivided units is already very high, why should this rate of increase be allowed? Will this send a wrong message?

Besides, some landlords of subdivided units have vowed to withdraw from the market or increase the rent substantially before the implementation of the measure. What I want to say is that we are not forbidding landlords of subdivided units from making profits out of rent, nor are we trying to eradicate subdivided units. However, it is really necessary to take the first step to improve the living conditions of the residents of subdivided units, at least through legislation or guidelines. Hong Kong is an international city. I do not want the problems revealed in the film Cageman to be brought up for discussion again a few years later.

President, in order to improve the living conditions of the grass roots who are not eligible for public housing, the Government shall formulate slightly tilted policies to render support to them. This Budget provides a lot of support to old buildings, including the allocation of $1 billion to subsidize drainage system repair works in old buildings. The Government has also launched the "Operation Building Bright", the Lift Modernisation Subsidy Scheme, the Fire Safety Improvement Works Subsidy Scheme, and so on, with a view to improving the living environment of old buildings. However, I would like to share some figures. The following information was obtained by me last week. In the first round of "Operation Building Bright" in 2018, the eligible applications received involved a total of 479 buildings; it has been more than two years since then, but only four of the 479 buildings have the repair works completed. The Lift Modernisation Subsidy Scheme was launched two years ago with a total of 1 800 applications, but after two years, only 45 cases have the modernization works completed. Two to three years ago, I strived to arrange lift repairs for the buildings, but after two years or so, the lifts in need of repair are still out of service and residents have to climb four to five flights of stairs. I think that after FS introduced various policies, the most important is how the various works can be implemented so that the residents will not have to face a long wait. Therefore, I hope that the Policy Bureaux, together with the relevant government departments, the Department and the Urban Renewal Authority, will join hands to explore ways to implement and expedite these works projects.

President, the COVID-19 epidemic situation remains volatile. While FS has introduced many measures in the Budget to boost the economy and the Government has introduced counter-cyclical measures in the light of the 5126 LEGISLATIVE COUNCIL ― 21 April 2021

$100 billion budget deficit, at the end of the day, we have to strive to achieve the target of "zero infection" as early as possible. Recently, there have been many cases of infection in the community, which have made Hong Kong people feel very worried. We hope the Government will implement powerful measures to deal with the epidemic as soon as possible, so that more measures can be re-introduced to support economic recovery.

With these remarks, President, I support the Appropriation Bill 2021.

DR JUNIUS HO (in Cantonese): President, as the saying goes, "all good things must come to an end". The reserves of Hong Kong were $457.5 billion in 1997, then dropped to $273 billion in the most undesirable year of 2003, but picked up year after year afterwards and in 2018, hit a historic record of $1,170.9 billion after the return of sovereignty. What followed were "black-clad violence", "mutual destruction" and the epidemic, which have brought devastation to Hong Kong. However, Hong Kong is not the only place that has been devastated, but also the rest of the world. World economies have experienced a major reshuffle, in which our country gets ahead under economic downturn. During the darkest period of the whole world, the economic growth of our country plummeted to negative growth for a short while, but then gone up to positive 6% or above.

In the Budget this year, FS has predicted that the economic growth of Hong Kong is 3% to 6% depending on the economic direction. However, according to the economic conditions of the Mainland published earlier, its growth rate in the first quarter exceeded 10%, which is simply astonishing. As the saying goes "all good things must come to an end", it happens that Hong Kong has entered a dark age, but it is lucky that our country has stretched its arms to embrace us and provided us with strong support.

At present, the two most valuable things of Hong Kong are talents and land resources. I will definitely support FS's Budget this year, just as what I did in the past years. However, his work is particularly difficult this year, not because of him but the overall market conditions. This year, the revenue of Hong Kong is $590 billion and its expenditure is $720 billion, with a difference of $136.7 billion. Therefore, in 2020, the Hong Kong economy has started to decline from a historic record of $1,100 billion in reserves and entered a deficit cycle, and deficits will still be recorded in the coming years.

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Why must I support the Budget this year? It seems that we have to exert enormous efforts to save the desperate crisis. Of course, I have not forgotten the contents of Articles 106 and 107 of the Basic Law. Let me first talk about Article 107 of the Basic Law. It stipulates that Hong Kong must follow the principle of keeping the expenditure within the limits of revenues in using money and make adjustments according to its economic growth. Hong Kong has now recorded a deficit and in the year of 2019-2020 in particular, but the situation will slightly improve this year. In that case, how can Hong Kong keep the expenditure within the limits of revenues as stipulated in Article 107 of the Basic Law? Why must it spend such a lot of money? Dishing out relief measures is to provide relief to the civilians, which is not wasting money without reason. So, judging from the concepts of keeping the expenditure within the limits of revenues and being appropriate, the Budget has basically met the required standard, so I must give my support.

What is Article 106 of the Basic Law about? Hong Kong is very lucky because it can save the money earned by itself without the need to hand it over to the Central Authorities. In comparison, Shanghai is obliged to obtain revenues for the whole country, which indeed is a heavy burden. Under such circumstances, how can Hong Kong keep the expenditure within the limits of revenues while cutting expenditure and raising revenue?

In relation to this Budget, I will not talk about the consumption vouchers, because it is a relief measure just like opening the granary to provide relief. Instead, I see two bright spots of this Budget. The question is how to make these two spots brighter. Firstly, innovation is required to develop Hong Kong into a smart city. As I have said earlier, one of the two most valuable things of Hong Kong is talent or wisdom. The Government has devoted a funding of more than $20 billion to universities, and the amount of funding devoted to the entire education system has even exceeded $100 billion, which is nearly 20% of the $500 billion. Besides, the funding devoted to social welfare is more than $100 billion. The problem is, has the Comprehensive Social Security Assistance been abused by the people?

There are adequate laws in Hong Kong, including laws on preventing secession of our country and riots as well. The problem lies in non-compliance and non-enforcement of laws, which has led to the fostering of evil propensities by being too-lenient in 2014 and the event in 2019. The Government has now devoted $110 billion to social welfare, and will definitely devote more next year, 5128 LEGISLATIVE COUNCIL ― 21 April 2021 but have the authorities checked clearly whether the target recipients of assistance are in genuine need or not? Why has the problem of poverty worsen despite the alleviation efforts? The country has achieved its poverty reduction target within nine years, even during the darkest period in 2019 when everyone thought that the country might not able to achieve and even need to defer it. However, the Central Authorities are decisive, put into practice what they say and see to it that results are achieved. This is the most important attitude.

In fact, Hong Kong has everything and the problem lies in our mindset. Hong Kong must promote innovation and technology ("I&T"). I very much support the authorities' devotion of tens of billions of dollars to the development of the Loop. However, I am dissatisfied that while the authorities brag about its remarkable achievements, they have to hire experts in every project. These experts often make things worse and prolong the time required, thereby doubling the cost incurred. This shows that the authorities have an I&T mindset, but are conservative and always stick to the own rut. As Mr Tony TSE said just now, rather than sharing common goals, they shuffle their work off, shirk their responsibilities and work for their own interests. Therefore, we must stand united to promote I&T.

Why is Hong Kong responsible for 85-hectare land only with regard to its I&T positioning as indicated in the National 14th Five-Year Plan? The country's Belt and Road initiative has gone beyond its territory, and it has also managed to sign contracts with more than 60 countries worldwide. Conversely, the authorities have failed to make good use of the 2 000-odd hectares of land released from the North District, and gone so far as to use it as a cemetery. The Government said that planning was made more than 10 years ago. This I understand, but they should still be flexible. Even if you are asked by your driving instructor to move forward when learning to drive, you will have to turn the steering wheel when a cliff is in front. Will you continue to move forward no matter what just because your instructor has asked you to do so?

Why was the planning in Hong Kong so ineffective? While it is right for the authorities to design, identify land and then use the piece of 850-hectare land identified for housing construction, land development does not simply seek to provide housing units for people to live in, but has to tie in with I&T and optimal use of manpower resources. There is such good land in the North District, but the Government now treats it as hay stacks.

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Let us look at Mr Stanley WONG's report again. In the report, he recommended three short-to-medium term options and five medium-to-long term options, but there was no feedback at all. Instead of choosing a piece of land which can be resumed within three months, the Government has developed land at a tripled cost of more than $300 billion. I find it unacceptable.

President, these are my views for FS and I support his Budget. While there are two bright spots in the Budget, there are also inadequacies, and that is, slow I&T development policies. As the Chairman of the Steering Committee on Land Supply, FS should perform his function in a fully competent manner.

I so submit. Thank you.

MR HOLDEN CHOW (in Cantonese): President, as the epidemic persists, many people are now in dire straits despite the SAR Government's generous allocation of resources to help people tide over the difficulties and introduce anti-epidemic measures. I am sure the epidemic will end someday, but how can Hong Kong regain its momentum of long-term economic growth after the epidemic is the question that the Budget has to answer.

In this year's Budget, the long-term development of industries such as financial services, innovation and technology ("I&T"), green economy and air cargo was discussed at length. Yet, only a few paragraphs were devoted to the issue of re-industrialization. President, given the division of labour among the Members belonging to the Democratic Alliance for the Betterment and Progress of Hong Kong, Budget initiatives on housing, health and transport have already been covered by my colleagues. Therefore, today, I will mainly speak on the two areas that I am responsible, namely long-term economic development and administration of justice.

I will start with long-term economic development. As I just said, the issue of re-industrialization was only briefly discussed in the Budget. Over the past 20 years or so, Hong Kong's industries have become increasingly homogenous and our four long-standing pillar industries have also been weakened. The industries that Hong Kong has long relied upon, including the financial and real estate industries, might be the cause of the worsening wealth disparity. Even though the idea of re-industrialization was first proposed early in the 2016 Policy Address, the Government has then been wasting time and failed to make any significant achievements.

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I have to make one point clear. It is true that the SAR Government has invested substantially to support I&T development in recent years, but financial support alone cannot bring success to the overall re-industrialization. Looking at the successful examples around the world, apart from the Mainland, we have Israel and Singapore. They have all formulated policies to support re-industrialization in a holistic manner. If the SAR Government wants to make some achievements in re-industrialization, there are three core issues that must be dealt with, namely "setting targets", "identifying industries" and "providing subsidies".

First of all, the Government has to set targets. In places which thrive on re-industrialization, manufacturing usually accounts for more than 20% of their Gross Domestic Products ("GDP"). For example, in Singapore, Israel, Switzerland, Germany and Austria, the manufacturing sector generally contributes some 20% or even close to 30% to GDP. From the successful stories of different places, we can see that some of them have even set specific targets. Singapore, for instance, had once set a target percentage for the contribution of the manufacturing sector to its GDP.

By contrast, in the case of Hong Kong, although the SAR Government was committed to increasing the percentage of the expenditure on research and development ("R&D") in GDP in the past few years, such as proposing in a previous policy address that the said percentage should reach 1.5%, it has not set any targets for re-industrialization. To be specific, can the Government set a target percentage for the contribution of manufacturing to GDP? With this target in place, there will be more specific goals to drive the work of the SAR Government in this respect. However, I must stress that the setting of such targets only serves as an impetus for the Government to promote industrial development evaluate performance, hence the Government may start with a more achievable target at the beginning to induce more people to take the first step.

Secondly, the Government should identify industries. The SAR Government has all along followed the positive non-intervention policy inherited from the former colonial Government, and refused to identify appropriate industries and support their development. Or it may do so only under very exceptional circumstances. Yet, the findings of my study showed that all places that have achieved success in re-industrialization had formulated policies for identifying target industries. Therefore, I think the SAR Government should establish a comprehensive mechanism for identifying priority industries and then provide support for them.

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A case in point is Israel. In the process of re-industrialization, Israel selected its traditional industry as a priority industry. According to the research publication on re-industrialization prepared by the Legislative Council Secretariat, in 2015, there were 10 754 establishments operating in the traditional manufacturing industry, accounting for as much as about 84% of the total number of manufacturing establishments in Israel. In 2016, the Israel Innovation Authority allocated HK$2.1 billion to support over 1 000 R&D projects, with the aim of improving the production technologies of the traditional industry. This is a clear example showing that the optimization and enhancement of traditional industries can also bring new job opportunities and promote re-industrialization. Therefore, apart from the development of high-tech and advanced manufacturing industries, the enhancement of traditional industries can also become the target of support and development.

President, after elaborating on the point of "identifying industries", I will now move on to next point of "providing subsidies", which I mentioned earlier on. Government subsidies and tax concessions are both indispensable. In recent years, the SAR Government has taken the first step for industries such as aircraft leasing and marine insurance by providing enterprises engaging in these businesses with tax concessions. Similarly, if the SAR Government wants to support re-industrialization, it may also provide appropriate tax concessions to eligible industries and enterprises.

Here, I would like to highlight that land support is equally important because many manufacturers have expressed their willingness to return to Hong Kong and establish their production bases here if land support is available. I raised this issue at the special meetings of the Finance Committee ("FC") to discuss the Budget. In response, the Government said that the Advanced Manufacturing Centre ("AMC") was expected to be completed in the next year or two. I urge the authorities to step up publicity for AMC to boost its occupancy rate because this is very important. Besides, I know that some manufacturing enterprises are considering to move back to Hong Kong. As I just said, after comparing the costs, some enterprises may regard Hong Kong as their future production base so long the land problem in Hong Kong can be solved. The Government should take note of this important piece of information.

Given that the Government has introduced the Re-industrialisation Funding Scheme and allocated $2 billion to subsidize the enhancement of production lines, I had raised a relevant question to the Government at a special FC meeting and 5132 LEGISLATIVE COUNCIL ― 21 April 2021 the Government replied that the scheme had received 12 applications so far. I hope the Government will further publicize this scheme and clearly inform the trade of how to apply for financial support. Hong Kong can achieve the target of re-industrialization or not depends heavily on whether the Government is determined to strive for breakthroughs. Hong Kong has all the conditions required for re-industrialization.

President, I would also like to speak on the initiatives related to the administration of justice. At the recent special FC meeting, I specifically asked about cases relating to the previous "black-clad violence". According to the Police, they had arrested over 10 000 people in total and prosecution would be instituted in 2 500 cases. As for the remaining 7 000-odd cases, they are still being processed and have yet to decide whether prosecution will be instituted. In view of this, at the FC meetings, I had repeatedly advised the Department of Justice to consider increasing its manpower or expediting the making of prosecution decisions by other means. Prolonged delay in case handling, regardless of whether prosecution will be instituted, will cause unfairness to the judicial system. I have also suggested extending the court hearing time and increasing the number of sittings to accommodate the prosecution of "black-clad violence" cases.

Lastly, I would like to highlight that, in handling cases related to the "black-clad violence" in 2019, the authorities must be quick in action, strict in law enforcement and harsh in punishment to give sufficient deterrent effect. They must expedite the handling and prosecution of these cases.

President, I so submit.

MR CHEUNG KWOK-KWAN (in Cantonese): President, DAB's response to the Budget delivered by the Financial Secretary ("FS") this year is, "It is committed to stimulating the economy but deficient in unemployment support". We opine that given a high fiscal deficit, FS is still willing to introduce a number of measures to ease people's burden, stimulate consumption and support small and medium enterprises, such as issuing electronic consumption vouchers with a total value of $5,000, this reflects that the Government has heard people's voices and responded to them. In view of the endeavours made to fight the epidemic and boost the economy, I think that the Budget exhibits a responsible attitude.

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After making this general comment, I am going to speak on a few key points of the Budget.

First, regarding the electronic consumption vouchers, FS announced that the Government has recorded a record high fiscal deficit of more than $200 billion this financial year, with a considerable reduction in its fiscal reserves, which has aroused concern over how the Budget can revive the pandemic-stricken economy while ensuring the health of public finances.

FS proposes a brand-new measure in the Budget to issue consumption vouchers to the public to revitalize the local economy. While the consumption voucher scheme is a new attempt in Hong Kong, some other Asian economies have already launched similar schemes and disburse consumption vouchers to the people in one go. They even allowed their people to transfer the consumption vouchers to others for their consumption. Furthermore, enhanced arrangements have been made in the disbursement of consumption vouchers to benefit low-income groups, pandemic-stricken industries and small and medium enterprises, as well as commodities with fewer imported contents.

However, administrative arrangements are often the magic spells undermining the effects of the SAR Government's policies. To be fair, since the Budget has been announced, FS and other officials have made all-out efforts to select e-payment providers for the digital consumption vouchers, but the administrative arrangements are very time-consuming. According to recent reports, the SAR Government aims at starting registration during the summer vacation, and members of the public will only register for the scheme but not receive the consumption vouchers then.

Looking back at the SAR Government's repeated endeavours to hand out "candies" in the past, people were always elated when such news was announced. However, by the time when the "candies" were received, they had become indifferent and calm. The Government did make efforts and spend money, but it missed the opportunity to enjoy the policy effects and people had not even displayed the slightest attitude. The SAR Government may say that they did not hand out "candies" to win applause. There is nothing wrong with this kind of attitude. However, if the Treasury doled out money not because it is flooded with cash but to help people affected by a disaster, then the timing of the disaster 5134 LEGISLATIVE COUNCIL ― 21 April 2021 relief will be a crucial factor determining the success or failure of a policy. As this is the first time that the SAR Government will establish an electronic consumption voucher system, it is understandable that more time will be needed. I nonetheless sincerely hope that the SAR Government can make good use of this opportunity to establish a sustainable system. In the future, this system may significantly reduce the time required for implementing measures beneficial to members of the public such that they can promptly enjoy these beneficial measures, whereas the SAR Government will get its due support.

I would also like to talk about the loans for the unemployed. Another new initiative in the Budget is to offer unemployed people personal loans with the Government's guarantee commitment. In fact, some developed countries have already announced or launched similar schemes, e.g. a relevant personal loan scheme introduced in Japan does not only support the unemployed, but also benefit low-income families and households whose income dropped significantly during the COVID-19 epidemic. If the income of borrowers or households keeps dropping when repayment has to be made, they may even be exempted from loan repayment.

Of course, the public are still very worried if the banks will tender loans as expected by the SAR Government to help people and households who do not have income proof or stable jobs but are in desperate need of help. I sincerely hope that the SAR Government can help people who have genuine need and stop helping those who are basically not in need of help. The Government should not repeat the mistakes made in the previous Anti-epidemic Fund, whereby hundreds of millions of public funds were not used to support employment but to guarantee dividends and bonuses.

In addition, I would like to talk about the restrictions on the social security allowance for Hong Kong people. The SAR Government currently specifies the permissible limit of absence from Hong Kong for elderly people in Hong Kong receiving various allowances, which applies across the board to those leaving Hong Kong for the Mainland and overseas countries. In other words, regardless of whether an elderly person frequently travels to and from the Mainland or has already migrated overseas with their family members, he will be treated equally by the authorities. So long as he has resided in Hong Kong for less than 60 days, he will not be able to receive allowances for the elderly in Hong Kong.

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I understand that the original intention of the authorities in specifying the permissible limit of absence from Hong Kong is to stop people who no longer usually reside in Hong Kong or do not have ties with life and various policies in Hong Kong from enjoying any welfare benefits provided by Hong Kong. I absolutely agree with this. Since Hong Kong people who are residing overseas have already left Hong Kong and the Motherland, they should certainly not enjoy any welfare benefits provided by Hong Kong. Nonetheless, when the SAR vigorously promotes integration with the Greater Bay Area, the elderly persons in Hong Kong have responded to the appeal and visited the Mainland more often, but the welfare policy of the SAR Government still sticks to the old rut and fails to break the magic spell of permissible limit of absence from Hong Kong. What policy objectives does it seek to defend?

SAR officials may think that with the implementation of the Guangdong Scheme, elderly people who choose to reside in Guangdong can receive the allowances for the elderly in the Mainland without returning to Hong Kong. Thus, the problem relating to the permissible limit of absence from Hong Kong has been addressed. I nonetheless find this explanation a bit far-fetched. I am talking about the elderly living within one country, regardless of whether they have moved to reside in Guangdong; frequently travel to and from the Mainland for consumption and entertainment, or travel to various parts of the motherland to experience local customs and practices. Why are they required to meet the requirement of the permissible limit of absence from Hong Kong in order to receive welfare benefits? Why does the SAR Government force the elderly to choose either to give up receiving the allowances in Hong Kong or apply for the Guangdong Scheme in order to continue to receive the benefits? This imposes unnecessary restrictions on the elderly. A policy should be abolished if there is downright no need to exist. There is no point of making up excuses, playing the old tunes and muddling through.

It is time for us to gain a sense of national identity and stop indiscriminately applying policy restrictions applicable to foreign countries to the Mainland. This policy-making mentality of "drawing Hong Kong as a prison" neglects the need of some Hong Kong people to travel frequently to and from the Mainland, and fails to dovetail with the SAR Government's attempts to encourage Hong Kong people to integrate into the overall development of the country. I hope the SAR Government officials will adjust their policy-making mentality; preserve their sense of national identity and expeditiously conduct a review to remove the permissible limit of absence from Hong Kong for elderly persons who often travel to and from the Mainland (The buzzer sounded) …

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PRESIDENT (in Cantonese): Mr CHEUNG Kwok-kwan, please stop speaking.

MR CHEUNG KWOK-KWAN (in Cantonese): President, I so submit.

MR KENNETH LAU (in Cantonese): President, an all-time high fiscal deficit of $257.6 billion is recorded in this year's Budget, and a fiscal deficit of as much as $101.6 billion is forecast for next year's Budget. Over the past three years, Hong Kong has suffered the impacts of the Sino-United States trade war, "black-clad violence" and the COVID-19 epidemic, which have dealt a devastating blow to Hong Kong's economy. The unemployment rate has climbed to 7.2%. The economy even contracted by 6.1% last year as a whole, the largest annual decline on record. It is also the first time for Hong Kong to register two consecutive years of negative growth. The Government has rolled out many rounds of measures to counter the epidemic, support enterprises and safeguard jobs. It is indeed a challenge to draw up a Budget that pleases everyone within the constraints of resources.

As far as the whole Budget is concerned, it is clear that people from all walks of life are given fewer benefits than before. The amount of salaries tax and profits tax concessions has been reduced by $10,000 or 50%, compared with last year. The rates concession provided for domestic properties across the territories is subject to a ceiling of $1,500 per quarter in the first two quarters and a ceiling of $1,000 per quarter in the remaining two quarters for each rateable property, as opposed to the ceiling of $1,500 per quarter throughout last year. Public rental housing tenants are not offered any rental waiver, which they were looking forward to. Comprehensive Social Security Assistance ("CSSA") and Old Age Living Allowance recipients are provided with an extra allowance equal to only half a month of payment. In contrast to the generous "candies" handed out in the past, this Budget has more or less disappointed members of the public. To be fair, the most difficult problem in public finance does not lie in scarcity but distribution. Despite offering a less generous relief package than in the past, the current Budget has endeavoured to balance the needs of various strata in the face of a massive fiscal deficit. I would like to give due recognition to the Budget in this regard.

Among the wide range of relief measures in the Budget, the focus of attention is undoubtedly the issuance of electronic consumption vouchers in instalments with a total value of $5,000 to each eligible member of the public. LEGISLATIVE COUNCIL ― 21 April 2021 5137

Although the amount is smaller than the $10,000 cash handed out last year, this practice can ensure that the funding disbursed will enter the local market, serving the dual purposes of boosting the economy and local consumption, and reducing people's living expenses. Nevertheless, issuing consumption vouchers by electronic means may make some non-tech-savvy people quite distressed. They are worried that they may not benefit from it because they have no idea of the operation of the vouchers. Besides, as electronic payment is not popular yet, quite a number of small businesses only accept cash payment. Although the operators of the four selected electronic payment systems have indicated that they will offer discounts to businesses for installing and renting their equipment, small businesses still feel worried that charges will be imposed after the expiry of the vouchers. In my view, the authorities should thoroughly examine the implementation details to prevent such people and small businesses from being excluded due to digital divide. I believe enhancing the user-friendliness of the electronic consumption vouchers will make sure the measure can benefit the whole community and ensure fairness of the policy.

President, apart from "handing out candies", members of the public are also very concerned about two controversial tax increases. Firstly, the rate of stamp duty on stock transfers ("Stamp Duty") will be raised from the current 0.1% to 0.13% to increase the Government's revenue. The financial services industry is a pillar industry of Hong Kong. Hong Kong is also expressly positioned as an international financial centre and a global offshore Renminbi business hub in the Outline Development Plan for the Guangdong-Hong Kong-Macao Greater Bay Area. I understand that while many industries have languished amid the epidemic, the financial industry is one of the few industries that remain robust. Therefore, raising the Stamp Duty may help to alleviate the fiscal deficit a bit. However, this has aroused a very strong reaction in the market. On the day the Budget was announced, the Hang Seng Index dropped by over 3% accordingly. Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect also registered the first net capital outflows this year, amounting to a record high of HK$20 billion. These market reactions have clearly shown that investors generally hold a negative view on the Stamp Duty hike.

Among the global financial markets, the rate of Stamp Duty levied in Hong Kong is on the high side. Our competitors such as Japan, Singapore and the United States do not impose any Stamp Duty, and this tax is only payable by the sellers in the Mainland. If Hong Kong adopts an opposite approach and further 5138 LEGISLATIVE COUNCIL ― 21 April 2021 raises the rate of Stamp Duty, in the long run, Hong Kong's financial market will lose its competitiveness, and investors will switch to other markets, resulting in reduced turnover in the local stock market, which probably means more loss than gain for the Government. In my view, the Financial Secretary ("FS") cannot ignore these signals. When considering the Government's revenue, he should also endeavour to reinforce and enhance Hong Kong's status as an international financial centre to facilitate investors and attract capital inflows. This should be the long-term development plan.

Another controversial tax increase concerns the vehicle licence fees and first registration tax ("FRT") for private cars. The licence fees of all vehicle licences for private cars have been raised by 30% and their FRT has been increased by 15% with a view to reducing the number of vehicles and relieving traffic congestion. However, traffic congestion does not solely hinge on the number of vehicles. Insufficient parking spaces and inadequate road planning are also major factors. I believe many people are sceptical as to whether tax hike is an effective means to contain traffic congestion. Early this year, Heung Yee Kuk New Territories ("HYKNT") and I had a meeting with FS on the Budget, during which I suggested FS to increase FRT for private cars with an engine displacement of over 2 500 cc with a view to both improving air quality and alleviating traffic congestion. Unfortunately, the Budget has not taken HYKNT's suggestion on board but adopted an across-the-board approach.

In fact, quite a number of residents living in remote areas in the New Territories have bought vehicles for transport purposes because of the insufficient public transport services in the rural areas. They drive private cars not for the sake of convenience, but out of necessity. In view of the prevailing economic difficulties, increasing the licence fees and FRT is unfair to them. I hope FS can seriously consider the actual situation of the people and do not make life even more difficult for them.

President, in the battle against the epidemic, Hong Kong has been fortunate to receive tremendous support and assistance from the Central Authorities in the implementation of the Universal Community Testing Programme, the construction of a "mobile cabin hospital" from scratch and coordination of vaccine supply to Hong Kong. Such assistance has enhanced Hong Kong's capability in countering the threat posed by COVID-19, offering a glimpse of LEGISLATIVE COUNCIL ― 21 April 2021 5139 hope in the fight against the epidemic. I believe as long as the public get vaccinated early, Hong Kong will overcome the epidemic very soon, borders will reopen before long, and normal social and economic activities will be restored.

As the epidemic has been raging for over one year, it is indeed difficult for the Budget to strike the right balance between providing relief and investing in the future. I am very glad to see that the balance is not tilted in this year's Budget. The post-epidemic times will see various changes in economic activities. As I said in my speech during the Budget debate last year, out of adversity comes opportunity, and opportunity favours the prepared mind. I hope the Government can break out of the existing framework, make advance plans with new and forward-looking thinking, and gain a good understanding of the new economic models in the post-epidemic times, thereby getting ready to reinvigorate the economy and make Hong Kong people smile again.

With these remarks, I support the Appropriation Bill 2021. Thank you.

MR CHAN HAN-PAN (in Cantonese): President, our public coffers have shrunk under the double blow of "black-clad violence" and the epidemic that have been plaguing Hong Kong. Out of our care of the situation of members of the public and various industries, I think it is now a critical moment to salvage the struggling economy under the constraints. The Financial Secretary ("FS") also cares about the situation of the people, and this is why he has allocated funding to introduce consumption vouchers. I support this measure in spite of the public reactions. Issuing consumption vouchers is different from handing out cash to members of the public. After the Government "handed out cash", people may either spend or save the money. Unlike "cash handouts", consumption vouchers can provide relief on the one hand, and on the other hand help boost the economy, thereby bailing out industries and supporting employment. I hope that when the Government introduces the consumption vouchers, it will minimize the administration cost, speed up the disbursement and cut the red tapes by all means.

I believe everyone can see for themselves FS's efforts in this regard. Sensing the public pulse, FS has also accepted the suggestion put forward by me, Mr Wilson OR, Mr Vincent CHENG and the environmentalist Mr Alex POON King-wo to provide financial support for drainage repairs of old buildings, with a view to effectively tackling the epidemic at source. On the other hand, FS has also set aside $500 million to carry out enhancement works on country park 5140 LEGISLATIVE COUNCIL ― 21 April 2021 facilities and revitalize some wartime relics by converting them into open museums. I agree with this approach very much, but I also hope that part of the funding can be used for revitalizing the relics on the periphery of country parks because relics can be found within and on the periphery of country parks. But unfortunately, since some relics are not located within the country park area, the relevant revitalization works have to be carried out in a fragmented manner.

A case in point is the heritage trail in Sha Tau Kok that commemorates the War of Resistance. In fact, some people suggested conserving this heritage trail very long ago. This relic is associated with the anti-Japanese campaigns undertaken by the Dongjiang Column. It is located partly in Wu Kau Tang, and partly in Sha Tau Kok, but this part does not fall within the country park area. If the scope of the funding can be extended to the conservation of such relics, I believe this will not only facilitate people's exploration of the countryside, but will also enable them to emulate the good role models and cherish our country and Hong Kong after visiting such relics. A report on this relic has been submitted to the Government, but unfortunately no response has been made. I hope that the $500 million funding will enable this relic to be taken care of. Moreover, organizations such as the New Territories Association of Societies and the Federation of New Territories Youth attach great importance to this relic and hope that FS and the relevant departments may take follow-up actions.

There are some questionable ideas in the Budget. For example, FS hopes to relieve traffic congestion by increasing taxes, but this measure is a "heavy dose of medicine" that will deal a heavy blow to the relevant sectors. The first registration tax rates and vehicle licence fees for private cars will be raised by 15% and 30% respectively. Although these are the first increases in 10 years and 30 years respectively, is this the right time to raise the amounts? Is tax increase the best solution to traffic congestion problem? Are there any other alternatives? In fact, increasing the tax and licence fees will add insult to injury to industries that have been hit hard by the epidemic.

As far as relieving traffic congestion is concerned, I raised a question in January and learned about the speed of vehicles travelling on the road in the past decade, which can serve as a yardstick for measuring traffic congestion. As we may see from the relevant figures, the speed of vehicles travelling on the road has remained more or less the same over the past decade, and it has even gone up in some regions. Members may be curious as to why the speed has gone up given an increase in the number of vehicles. In fact, this has something to do with LEGISLATIVE COUNCIL ― 21 April 2021 5141 road repairs. Besides, some of the newly registered vehicles are holiday cars, which will not cause any adverse impact on the traffic. For example, the overall vehicular speed went up from 21.8 km/h in 2014 to 30.8 km/h in 2018 and 2019. Therefore, despite the high year-on-year increase in the number of vehicles, the vehicular speeds have actually gone up. Traffic congestion has also improved considerably even on Hong Kong Island, which is notorious for the problem. We should not think that only Hong Kong Island is prone to serious traffic congestion nowadays. In fact, the problem is also severe in Kowloon, especially the Kwun Tong area. Redevelopment projects and increased commercial activities have invigorated the area, thus aggravating traffic congestion. The vehicular speed on Hong Kong Island during morning hours has gone up from 19 km/h in 2010 to the current 21.5 km/h. This shows an improvement in the overall vehicular speed. Therefore, as to whether traffic congestion can be improved by curbing vehicle growth, no correlation whatsoever has been established from the figures, nor is there any factor linking them.

(THE PRESIDENT'S DEPUTY, MR MA FUNG-KWOK, took the Chair)

As we all know, over 90% Hong Kong people take public transport for commuting overall. In other words, people probably only drive their cars during holidays, or for transporting their families, or for connecting with public transport especially in the case of those living in rural areas. The population of those areas has been growing, and residents need to drive point-to-point from their residences to public transport interchanges such as MTR stations where park-and-ride facilities are available. Therefore, we are of the view that increasing taxes will excessively curb vehicle growth, which may not yield ideal results.

As to whether tax increase is a viable means to contain vehicle growth, figures have shown that the number of first registrations declined from 43 000 in 2017 to 42 000 in 2018, and further to 38 000 in 2019, and there were only 37 000 first registrations last year. We can see that the figures have been dropping annually by 3% to 9%. Therefore, even if the Government does not implement any measures, the growth has actually been slowing down gradually.

As a matter of fact, vehicle growth is correlated to our economic environment and business cycle. As many people have said, if they cannot afford a property, they will buy a car and go to different places or drive their 5142 LEGISLATIVE COUNCIL ― 21 April 2021 families around. What is more, given the ageing population in Hong Kong, people sometimes need a car for transporting the elderly family members under their care. Therefore, if people buy a car just for having a better life and without causing any adverse impact on the traffic, I believe any measures that excessively curb vehicle growth would only be counterproductive.

Furthermore, in the past year or two, it has been very difficult for the relevant sectors to operate, and the survival of their businesses has become their major concern. The operation of cross-boundary vehicles has come to a standstill following the suspension of cross-boundary travel, which has been the major source of business for the relevant sectors. As cross-boundary travel has not resumed yet, there is naturally no need to replace cross-boundary vehicles and many of them have been left idle. As tax increase will deter the purchase of some products, the sectors are now covered in a cloud of gloom.

The Government has been striving to address the traffic congestion problem, but raising taxes may not be the best solution. On the contrary, I have earlier suggested that the provision of more park-and-ride facilities at a number of strategic locations so as to encourage people living in remote areas to take public transport after parking their cars. I believe encouraging the use of public transport is a more effective means to control the traffic congestion problem. I hope the relevant department will provide FS with data that can reflect the actual situation so that he can have sufficient data in hand. Amid the epidemic, I also hope that FS may consider whether there is still room for manoeuvre. There are many ways to improve traffic, but increasing taxes amid the epidemic may not be a desirable one. I implore FS to think twice.

I so submit. Thank you, Deputy President.

MS ALICE MAK (in Cantonese): Deputy President, owing to the epidemic, the economy is declining. The Government faces a sizeable fiscal deficit this year mainly because it has unveiled counter-cyclical fiscal measures to support people in need, thus leading to an increase in expenditure. The Government should be commended for not having to reduce the number of measures in this Budget.

The Hong Kong Federation of Trade Unions ("FTU") together with various political parties or political organizations have all along been proposing the introduction of a temporary unemployment assistance scheme to support people LEGISLATIVE COUNCIL ― 21 April 2021 5143 who are unemployed or suspended from work. Regrettably, the relevant bureaux have not introduced the scheme in time to support those who are unemployed or suspended from work. Instead, various reasons have been put forward, such as the potential for moral hazards, abuse by the public and low cost-effectiveness. I am not going to discuss this issue with the Secretary, otherwise he will talk profusely like a university lecturer.

Precisely because of the Secretary's reluctance to think for the interests of the public and assist the unemployed in solving their problems, the Financial Secretary ("FS") has launched the 100% Personal Loan Guarantee Scheme ("PLGS") costing $15 billion. Under PLGS, Hong Kong permanent residents aged 18 or above, who have been unemployed for at least two months, can borrow up to HK$80,000 with a maximum repayment period of six years at an interest rate of only 1% per annum. Of course, PLGS is in no way a substitute for the emergency unemployment assistance that we have been proposing all along. FTU originally proposed setting up a $15 billion unemployment assistance fund, but we failed to enlist the support of the relevant bureaux. FS was thus unable to put forward the proposal and could only offer help to the unemployed through PLGS instead. I believe PLGS can offer a certain degree of help to the unemployed. Given that many unemployed people are living on credit card debt and only manage to repay the minimum amount each month, PLGS should be able to alleviate their plight.

As the Government always includes a warning message at the end of advertisements of financial companies or loans, saying that "To borrow or not to borrow? Borrow only if you can repay", some unemployed people are probably worried about their ability to repay the $80,000 they borrow. The Secretary and government officials receiving decent salaries may not know that it is very difficult to repay $80,000. For the grass roots, borrowing $80,000 can constitute a huge burden and requires serious thoughts on how repayment can be made. Can PLGS really help the unemployed?

Besides, some people are worried if their credit records will be affected after they fail to repay the loans in future. Many unemployed people thus remarked that instead of providing unemployment assistance or loans, they preferred the Government to provide them with jobs. Unfortunately, the Government's plan for the creation of temporary jobs has all along failed to find adequate recruits and the target has only been half met. As a result, the 5144 LEGISLATIVE COUNCIL ― 21 April 2021

Government has failed to either provide jobs for workers or render assistance to the public, but can only lend money to them. Is this a genuine solution to the plight of the unemployed amid the epidemic and "black-clad violence"?

Regarding PLGS, as we have mentioned at the special meetings of the Finance Committee ("FC"), some people are not unemployed but have suffered wage cuts. Taking the catering sector as an example, there was suspension of evening dine-in services in restaurants due to the epidemic, and employees were only suspended from work without being laid off. The same applies to workers on the Airport Island. While they were kept in their posts, the number of working days has been reduced to, say, just one or two days per week, thereby resulting in a significant reduction in income. These families do share a common feature, i.e. both the husband and wife work on the Airport Island. Hence, if they suffer wage cuts, the total family income will be affected. However, PLGS is only available to the unemployed, thus people who suffered wage cuts or suspension from work are not eligible for PLGS.

As I have mentioned at the special FC meetings, I hoped the Secretary can consider the following: If this sum of $15 billion can really help the unemployed, can the authorities allocate another $15 billion to help those being suspended from work or suffering wage cuts? Of course, we have no intention to obstruct the Government and hope that this $15 billion can be approved as soon as possible to help the unemployed workers. However, since workers suffering wage cuts or being suspended from work are also in desperate need of help, I hope FS will consider this proposal.

At present, Hong Kong's economy is declining amid the epidemic and the Government has anticipated deficits in the next few years. However, the Government must not be a miser. It should allocate resources more proactively so as to boost economic recovery in Hong Kong and promote structural economic reforms.

In the past, SAR government officials, who believed in the free market principle and adopted a hands-off style of governance, were utterly resistant to active intervention by the Government, thinking that revenue from land sales over the years could sustain economic development in Hong Kong. However, it is time to abandon this belief, especially after the epidemic. For example, the United States has launched the US$190 million "American Rescue Plan" and the US$4 trillion "American Jobs Program" to allocate huge resources in creating LEGISLATIVE COUNCIL ― 21 April 2021 5145 more employment opportunities and improving the economy. Therefore, we believe the Government should take proactive actions under the current economic condition.

Today, a number of colleagues said that it was unacceptable for the Government to increase tax rates against the market trend. We certainly understand that amid the epidemic and the economic downturn, the community at large, especially the grass roots, are in need of government assistance. That is why the Government has to allocate more resources to help the grass roots. At the same time, as the Government cannot rely solely on pushing up the prices of the sites to generate revenue from land sales, it thus needs to increase revenue. While taxation is a way to increase revenue, we also hope that wealth redistribution can be achieved through a tax reform.

Upon the improvement of the electoral system in Hong Kong, the Legislative Council will move away from the previous confrontational culture, which is characterized by low efficiency and low quality, and turn into a legislature with higher efficiency, stability and quality. This will probably provide greater development space to dovetail with the reforms or policies of the Government.

Therefore, under the new circumstances, I hope that FS and his team can adopt a more proactive and positive approach, including conducting a review of the tax regime to achieve wealth redistribution, allocating more resources to foster the development of the innovation and technology ("I&T") industry and creating more jobs. When allocating resources to foster I&T development, it is also necessary to avoid creating another Cyberport, which may again end up turning digital development into real estate development.

Another issue which requires the Government's all-out efforts is land and housing. Over the years, Hong Kong's land and housing policy has been incoherent, which initially produced more subsidized housing units but then suspended when the property market slumped. We do not have a comprehensive land policy or land reserve, available sites for development are too limited and the resumption of land takes too long, thus resulting in high property prices and the prevalence of subdivided units. People are in so much hardship that even the Central Authorities cannot remain silent. In order to solve the land and housing problem, the Government must be resolute in mobilizing its financial resources by resuming and reclaiming land wherever 5146 LEGISLATIVE COUNCIL ― 21 April 2021 necessary and appropriate. If the Government needs more manpower, it should recruit more staff. The Government should not tie its hands for fear of offending certain interest groups, and refuse to take the initiative to solve the greatest livelihood issue of housing and land at present. As a matter of fact, housing and land matters are also within the purview of FS, I hope that when he deals with the issues of land development and housing, he will explore with various groups more resolute and ground-breaking measures to increase land and housing supply.

As I have mentioned during the Policy Address debate, according to the President of China, governance is to give people a sense of fulfilment, happiness and security. With regard to this Budget, I hope that FS and his team will capitalize on the new circumstances of this Council and introduce more resolute and innovative measures in respect of finance and land, so that people will have a sense of fulfilment, happiness and security. I so submit.

MR LEUNG CHE-CHEUNG (in Cantonese): Deputy President, I speak in support of the Appropriation Bill 2021 ("the Bill").

The Budget is the second budget announced under the influence of the novel coronavirus epidemic. For more than a year in Hong Kong, the environment has been particularly bad, the economy particularly poor and the situation for industries particularly tough. Many workers who became unemployed or underemployed found themselves in miserable circumstances, and the living of their families has been greatly affected. The Anti-epidemic Fund launched by the Government is to give priority to protecting the enterprises, thereby protecting the "rice bowls" of wage earners.

Fortunately, with its abundant fiscal reserves, Hong Kong has launched four rounds of fiscal measures to help all sectors and the public tide over the difficulties. Starting from 21 February last year, funds amounting to $30 billion were allocated in the first round, after which large-scale counter-cyclical measures incurring more than $120 billion were introduced in last year's budget. In the second round of measures, a total of $137.5 billion was allocated, followed by $24 billion in the third round and $6.4 billion in the fourth.

The SAR Government has spent a lot of money, but has the Hong Kong economy revived up to this day? Has the employment situation for wage earners improved? Not yet. Hong Kong is still affected by the epidemic and LEGISLATIVE COUNCIL ― 21 April 2021 5147 has to face the threat of virus variants and the fifth wave of the epidemic. In this year's Budget, certain measures to relieve the public's hardship have also been watered down. For example, the elderly, the disabled, and CSSA recipients were previously given "double pay", but the Budget only proposes to provide them with half a month's pay. The ceiling of reduction of salaries tax and tax under personal assessment has also been reduced from $20,000 to $10,000. In fact, Hong Kong cannot indefinitely dole out money from its fiscal reserves. Thus, the first and foremost task for the Government is to control the epidemic before the economy and people's livelihood of Hong Kong has a chance of recovery.

The Budget proposes to issue electronic consumption vouchers with a total value of $5,000, which will incur an estimated expenditure of $36 billion. However, the public have mixed opinions about the disbursement method and the policy intent of the initiative. In particular, since consumption can only be made by electronic means, thus small businesses will have difficulties benefiting from it and the initiative will fail to produce the effect of supporting medium and small enterprises ("SMEs"). From the perspectives of consumers, users of electronic consumption can hardly cover all elderly persons and many of them will not be able to consume in this way. This will run contrary to the original policy intent. I think that in the process of issuing electronic consumption vouchers, the Government should listen to the views of the public, including increasing the monthly consumption ceiling from $1,000 to more than 1,000, and changing the mode of consumption from electronic consumption only to partly in cash, so that the elderly can actually use the money.

I would like to discuss the welfare policy in the Budget. At present, due to a shortage of services and the impact of the epidemic, the heavy responsibility of caring for the elderly, the mentally handicapped, the disabled and the sick lies mainly on their family members. Many carers even have to give up their jobs to take care of their family members, thus directly affecting the income of the family.

The Government should not neglect the needs of these carers. The Democratic Alliance for the Betterment and Progress of Hong Kong ("DAB") has suggested that the authorities should follow the example of overseas regions and establish a "carers allowance system" to relieve the difficulties of carers. These carers may have their own difficulties as some are them may be old, suffering from illnesses themselves and have emotional from time to time. Thus, DAB 5148 LEGISLATIVE COUNCIL ― 21 April 2021 has further suggested the Government to set up carers support centres in various districts to provide carers with nursing care training, emotional support and appropriate service referrals. I believe these initiatives are more helpful to carers.

Furthermore, I would like to discuss the home-based child care service. At present, there is a shortage of subsidized child care centres for children under three. According to the Hong Kong Planning Standards and Guidelines issued by the Government, it must reserve a number of suitable premises for child care centres to operate in accordance with the population. It is estimated that it will take 10 years to achieve the planning target. The Social Welfare Department ("SWD") has made continuous effort to increase the number of child care centre facilities through public housing redevelopment or urban renewal projects. In the next three to four years, there will be an addition of only 10 child care centres and 1 000 child care service places, the supply of which can hardly catch up with the demand.

Under the circumstances, many families will choose to hire home-based child carers. There is demand for home-based child carers in the market, but this occupation also faces the problem of shortage of entrants as the Government has failed to attract new entrants. The Government should further study whether it can increase the hourly salary of home-based child carers or provide transportation allowance for them so as to increase the attractiveness of the occupation. In addition, it should also conduct a study on introducing a registration system for home-based child carers to professionalize the occupation and enhance their professional image. This will narrow the gap of matching families with home-based child carers, so that parents can feel more at ease.

As I mentioned earlier, shortage of social service facilities has affected the provision of services. SWD announced in September last year that it would purchase 160 welfare facilities in batches in the 18 districts of Hong Kong. In January this year, after renewal of agreement with Care & Services Elderly Centre was refused, the residents had to look for places at other elderly centres again. Is this incident related to the Government's purchasing plan? Nevertheless, it is a real challenge for the Government to optimize the use of public funds to purchase facilities on the one hand, and provide services as soon as possible on the other.

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In order to steadily speed up the provision of social services, the Government will purchase premises in stages to avoid falling victim to price-gouging. In fact, the Government can also consider the option of renting premises to avoid delays in providing services.

I so submit.

MR PAUL TSE (in Cantonese): Deputy President, I think it is common sense that in the face of the endless COVID-19 pandemic, the figures of unemployment, layoff, pay reduction, bankruptcy and so on will inevitably reach new highs when there is a general slump in the market for all trades.

Although several rounds of relief measures amounting to over $300 billion of public money have been implemented in Hong Kong, the economy has yet to pick up. I believe the vast majority of the public would expect that this Budget can achieve several objectives, or at least make good use of the huge reserves to implement immediate and effective short-term bail-out measures in the light of the circumstances, so as to rebuild people's confidence as well as enhance Hong Kong's competitiveness and boost the economy in the long run. I believe the Government should also understand that the longer the fight against the pandemic, the less desirable it is and the higher the costs to be paid by members of the public.

Members may recall the boundary closure in the early stage of the epidemic, or the recent imported cases from countries such as India, Pakistan or the Philippines. The Government's policies in response have been very indecisive, causing Hong Kong to miss the disease prevention opportunities they should have. Having repeatedly missed the opportunities, Hong Kong's economy is getting worse; the cost paid by the public is getting higher and the number of small and medium enterprises closing down is also increasing.

I recall that in the first three months of this year, the number of compulsory winding-up cases reached 136, accounting for a year-on-year increase of 77%. The number of personal bankruptcies was 1 986 in the first three months of this year, representing an increase of 30%. The latest overall unemployment rate has reached 7.2%. All these are objective and specific facts, leaving no room for 5150 LEGISLATIVE COUNCIL ― 21 April 2021 debate. If the authorities know a bit about their own limitations and shortcomings or ask themselves honestly, they should step up their efforts in relieving people's hardships as much as possible. Regrettably, I am afraid that the Government just listens to advice but sticks to the old rut when it comes to execution.

Deputy President, the Financial Secretary ("FS") is also present. At first, I greatly appreciated the advertisement featuring FS in a cook's costume. Some people teased him saying that he is "Ah Mo2 making cakes". It does not matter, as everyone being happy is the most important. Indeed, there are expectations in the community that he will make cakes suitable for all to eat and use. Therefore, it is very difficult for us not to make a comparison with other places or countries.

I previously cited the United States ("US") and Macao as examples, as both of them have made vigorous efforts in implementing numerous measures to appease the public. Even our neighbour, Macao, which is small in size, has handed out to permanent residents and non-permanent residents "cash handouts" of $10,000 and $6,000 respectively. The first batch of money has already reached the hands of the public, and a batch of cheques should be able to be sent by post on 21 May. However, Hong Kong is still working on the arrangement. Why does it seem that Hong Kong needs to "reshuffle" the system or set up a system afresh rather than using the established system to cut down on some procedures whenever a "cash handout" measure is proposed? I really do not understand. Is it a must to hire people to design the system so that more money can be spent? I really do not understand.

When it comes to US, it still manages to hand out US$1,400 cash to each citizen, totalling US$410 billion despite the heavy fiscal deficits. Similarly, the money has reached the hands of the public very quickly. Under the support of the "cash handout" policy, the retail sales of US in March recorded the greatest increase for 10 months, bringing about the stock market rally. These are all the results that can be seen. Contrarily, I heard just now that colleagues used the expression "recalling all the umbrellas on the rainy days" to describe the SAR Government. It is unavoidable for the public to make a comparison. Last year, the Government handed out $10,000 to the public, but the expenditure for relief

2 "Mo" is the middle name of Paul CHAN Mo-po in Chinese. LEGISLATIVE COUNCIL ― 21 April 2021 5151 measures has been slashed this year, not to mention the initiatives to increase fees. The electronic consumption vouchers to be implemented this year can be said to be a "shrunken" measure to a certain extent. No wonder Hong Kong is still full of resentment.

Deputy President, it is understandable that after spending a large sum of public money, resulting in deficits, the Government is now reluctant to be too generous. However, please forgive me for being long-winded. I have often underscored my question: Why can't we use our own money to save ourselves? The poor management of the Mandatory Provident Fund ("MPF") is something known to all. I have been using layman terms to put forward proposals on "suspending making MPF contributions", "making MPF contributions for others" or "giving the money back", but they were all neglected and the authorities have remained inaction. I really do not understand. Some friends and even staff at my office, who have years of savings in their MPF accounts, said that there was no need for the Government to worry if they have money to spend after retirement. They hoped that the Government would slightly relax the requirement and allow them to withdraw a little bit of their MPF benefits. Even if they successfully apply for flats under the Green Form Subsidized Home Ownership Scheme now, they cannot afford to pay the down payment. If the Government can help them in this respect, they will be able to resolve their housing problems in the future even without using their MPF benefits. Since housing problem is the greatest problem in Hong Kong, many problems can be resolved once this problem is addressed.

As seen from the recent figures, although property prices appear to remain stable, many of these flats have been purchased by the so-called "new Hongkongers" or civil servants who are in high positions and well remunerated. Ordinary citizens are really miserable. While the Government has spent a large sum of public money, it does not allow citizens to save themselves. The Government has still given people an impression that it is extravagant in spending, and made them furiously angry. Deputy President, please allow me to cite a few examples. Some colleagues have criticized stamp duty on stock transfers and first registration tax for motor vehicles. Although the Hong Kong Tourism Board has done some good things, their expenses are usually very high and it costs as much as $9 million for the production of a video clip. As for monorail, $92 million has been spent but nothing has been achieved all through the years, and the expenses are related to study reports or the so-called consultancy fees.

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FS, in the three "cash handouts", the Government has used $1.28 billion of administrative fees in total. While citizens have difficulty in even making ends meet, civil servants are still provided with $246 million of travel fees. Worse still, the Government has deferred the provision of the relevant benefit to next year as it is impossible to travel this year. We certainly understand that civil servants have expectations and this has something to do with contracts or policies, but the perception of the public is not good. FS, the perception is not good. When the public are jobless and cannot make ends meet, the Government has reserved $246 million of travel fees for the civil servants. Can the Government help implement measures to make citizens feel a bit at ease?

As for torture claims, $6 billion has been spent by Hong Kong for this purpose in the past six years. I once used an expression to describe Hong Kong, that is, "the capital of defaults on payments", because a lot of money cannot be recovered by the Government and this situation is getting worse.

I wish to talk about some slightly political issues. It is now required that if Legislative Council or District Council members perform any acts which are in breach of oath or fail to bear allegiance to SAR, their qualifications may be suspended immediately and even their emolument and allowances will have to be returned. How about civil servants? Not to mention the 100-odd civil servants who are unwilling to swear, some very experienced retired civil servants and government officials are scolding the Government on the one hand, and receiving pension from the Government on the other. While they are undermining the governance of the Government, they are using the pensions received to lead or seek to lead live peacefully for the rest of their life. The public are very furious about this, but they can do nothing except grumbling.

Deputy President, 10 minutes have lapsed quickly. Today, many colleagues have repeatedly discussed policies like industrial policy or the Guangdong Scheme. Basically, they are sending a message to the Government that it must not save money at this moment. Even though US is facing huge deficits, something has to be done. The one who gets the support of people wins the world. The example I have frequently cited is that when Korea faced the greatest economic crisis years ago, its citizens sold off their rings and necklaces to help the Government. When a government earns the support and trust of people, it really has nothing to worry about. Conversely, if a government fails to win the support of people and there is strong public resentment, social disturbances will inevitably emerge. Under such circumstances, it makes no difference if the Government's reserves are large or small.

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I do not want to discuss them one by one. If the Government really faces such crises, it should relax the use of reserves as much as possible. Perhaps, many policies of FS have been finalized, but I still hope that the Government can try to put more efforts, act in the interest of the people as far as possible, and try to do more things that will not make citizens that angry. I know that the civil servants are working very hard, but still many of them are in high positions, well remunerated and working from home. They must understand the plight of the people, and try to do more image engineering and pragmatic work by all means. The Government must also listen more to the voices of the public, because only in this way can Hong Kong's long-term stability and safety be ensured. Thank you, Deputy President.

MR CHUNG KWOK-PAN (in Cantonese): Deputy President, many Members said that so long as the epidemic had not been contained, it would be useless to do anything. I very much appreciate that the Financial Secretary ("FS") has produced a budget like this under such difficult circumstances. Not only has the Budget been able to strike a balance in all aspects, but has also set out the vision for future economic development. However, my comment today remains that as long as the epidemic has not been contained, it would be useless to do anything.

Certainly, when formulating the Budget, FS might be thinking that the situation in the second half of this year would probably improve, as vaccination should have been administered. If the general public here are like those of Israel or the United Kingdom, where 50% to 60% of the people are willing to be vaccinated, our economy can be opened up and the situation will also improve. However, it seems that I can hardly see any improvement in the economic situation by the end of this year. Although the epidemic situation in Hong Kong can be regarded as moderately under control, things have not improved, particularly because the policy decisions of the Government are often "detached from reality". Before the Government decides on any matter, it has never discussed with any industry or tried to understand the actual situation of the industry. For example, when the fourth wave of the epidemic began, the Government adopted a broad-brush approach and ordered all catering, beauty, and karaoke businesses to suspend business after 6:00 pm. Policies of this kind are really "utterly detached from reality".

At present, many companies and enterprises in Hong Kong will gradually close down one after another and the unemployment rate will continue to rise. I do not believe the current unemployment rate has reached its peak. These 5154 LEGISLATIVE COUNCIL ― 21 April 2021 problems are partly created by the Government. If some premises are allowed to reopen, just like businesses in the catering industry can reopen now, they can take care of themselves. However, strangely enough, it seems that premises like mahjong parlours are not allowed to reopen yet. Public officials may not play mahjong. When playing mahjong, the four players will wear face masks and move their hands only. But if four people eat together at a table in a restaurant, they must remove their face masks. I do not understand the rationale behind these measures. They are very "detached from reality". After a problem occurred at a restaurant in a shopping mall earlier, it was required to comply with the fresh air change requirement. At present, all restaurants must satisfy the requirement of introducing fresh air change six times per hour by the end of April. Who made this decision? The so-called "expert". All anti-epidemic policies in Hong Kong are invariably made by that expert or a couple of experts, but do they understand the designs of the shopping malls? Do they know if it is feasible for the malls to introduce fresh air change six times per hour? When the restaurant owners said that it was not feasible, the authorities would ask them to buy ventilators to bring in more fresh air. If they cannot even afford to buy or install ventilators, the authorities will reconsider and may grant an exemption then. What kind of policies are these? Is such approach scientific and logical?

As I mentioned earlier, there will be a wave of business closures and an unemployment rate has already been recorded. We have just one request now. We would like to ask if the Government can launch another tranche of Employment Support Scheme ("ESS"). The reason is that ESS can actually make people rest assured and give enterprises much confidence. If the authorities believe there is a chance of recovery by the end of this year, they should give the enterprises support for six or three months more so that they will hopefully survive. However, the Government will certainly explain that―Secretary Dr LAW will surely say there is no money―it has already spent $300 billion. I believe "Figures don't lie" and calculation is the most practical thing to do. If another tranche of ESS is introduced, it will cost $40 billion. If we add to this amount $15 billion, the costs of unemployment assistance for which Members are currently demanding in the Chamber, we will come to a total of about $55 billion. However, such expenditure can at least contain the unemployment rate and stop the tide of business closures to prevent the situation from getting too bad. FS will certainly say that there is no money, but figures are obtained from calculations and it all depends on whether he is willing to take action. The Budget mentions that $25 billion will be brought back from the Future Fund and the Housing Reserve. Under this mechanism, the authorities LEGISLATIVE COUNCIL ― 21 April 2021 5155 can likewise bring back funds from the Exchange Fund. The Exchange Fund made $198 billion this year, as high as $198 billion. Of course, out of this amount, $32.6 billion must be brought back to the Government as reserves and $11.5 billion will finance the costs of other funds, adding up to more than $40 billion. The remaining balance is $154 billion is the yield. If only $55 billion is spent, there will still be $100 billion to be deposited into the Exchange Fund. What is the problem? This approach will have absolutely no impact on the Budget, so it is definitely feasible and can definitely help the public. It all depends on whether FS is willing to take action. Perhaps only FS but not the Policy Bureau is willing to do so, which is not uncommon.

Furthermore, we mentioned about investment in the future, considering particularly that the Government has invested a lot of money in innovation and technology during this period. Yesterday, the Innovation and Technology Commission prepared to submit a $9 billion-plus funding application, and there should not be any problem. Spending money on R&D is not a big issue, the greatest concerns are the subject of R&D and its usefulness. Hong Kong has previously developed some very practical and useful things in the past, but no one knows about them. Certain R&D results have even attracted some interested foreign venture capital funds, but no one knows either.

The Budget has highlighted green economy, green finance, carbon reduction, waste reduction and recycling, and all of them are new industries to be developed in the future. However, speaking of the textiles and garment sector that I represent, the Government has already formulated policies on three of the four most important aspects, namely "food, housing and transportation", but nothing on "clothing" so far. Hong Kong discards 150 000 metric tons of clothing to landfills every year. What is the concept of 150 000 metric tons? It means 1 500 T-shirts are discarded every day. Sorry, not every day, but every minute; 1 500 T-shirts are discarded every minute. Think about it, will this cause a lot of wastes or pollution? However, so far, the Environment Bureau has not formulated any policy on the recycling of clothing at all. I put forward a relevant proposal three years ago and mentioned it FS as well. He said that if any Policy Bureau agreed to take up the work, he would allocate funds for it. This is another example to show that even if a policy is financially viable, but it is useless if no Policy Bureau agrees to take up the work. I do not know if there will be any change under the new situation in the future; I really do not know.

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How have resources been wasted sometimes? I just raised a question today, but perhaps no one understood what I said. The question is about the funding granted by the Innovation and Technology Bureau to the Hong Kong Research Institute of Textiles and Apparel for the development of a Pilot Scale System for the Production of (Fertiliser-containing) Cellulosic Superabsorbent Polymer. Probably no one really knows what I am saying. Given that the production of many materials, such as cotton, requires a lot of water, so a new material has been developed to minimize water consumption. But for whom is such a thing developed in Hong Kong? Is it for Mr Steven HO? I do not know the purpose of granting the relevant funding given that agriculture is absent in Hong Kong.

Due to the time restraints, let me say that I appreciate the last paragraph of the Budget most. FS said, "Deep-seated conflicts cannot be resolved instantly, nor can wounds be healed overnight. Given time, even the tightest knot can be untied". I hope that FS and the SAR Government can solve this social problem as far as possible.

Thank you, Deputy President. I so submit.

MR TOMMY CHEUNG (in Cantonese): Deputy President, I speak in support of the passage of the Second Reading of the Appropriation Bill 2021.

I am pleasantly surprised by this year's Budget because the Financial Secretary ("FS") has not reined in government spending in the face of the deficit. Instead, despite the economic downturn and record high unemployment rate in Hong Kong, FS has exhausted every possible means to formulate a Budget with a deficit of nearly $100 billion to relieve the hardship of the people. The disbursement of electronic consumption vouchers proposed by the Liberal Party ("LP"), which involves $36 billion, has the strong support of LP.

I will talk about LP's views on the electronic consumption vouchers, the 100% Personal Loan Guarantee Scheme ("PLGS"), manpower shortage of doctors and other proposals to assist SMEs. First of all, LP advocated the concept of consumer vouchers in as early as 2009 because we held that consumption vouchers have the "snowball effect" to drive economic recovery, and is more effective than cash handouts in boosting consumption and the economy. Back then, Mr Vincent FANG and I visited Taiwan to learn about LEGISLATIVE COUNCIL ― 21 April 2021 5157 their implementation of consumption vouchers, and we subsequently lobbied the SAR Government to introduce consumption vouches. However, the Government turned down our proposal on the ground of its high administrative costs and handed out cash instead.

Twelve years later in 2021, we are now experiencing an economic downturn. LP continued to lobby the Government to issue electronic consumption vouchers in January this year. Electronic consumption has become more popular thanks to technological progress over time. Amid the epidemic, cash transaction increases the risk of virus transmission, adding that the Government is promoting electronic transactions in wet markets, LP sees this as an opportunity to promote electronic consumption and electronic wallets. We therefore strongly welcome the Government's adoption of our proposal to distribute $5,000 to each eligible Hong Kong resident in the form of electronic consumption vouchers, and suggested that it should be disbursed in instalments rather than in one go.

However, LP and I are slightly disappointed because the Government has failed to take this opportunity to introduce a "real-name registration" system for Octopus cards and other electronic payment methods. Some people are worried that the real-name registration system will enable others to check their spending history, and even enable their wives to check their whereabouts or spending. However, as FS may recall that during the "black-clad riots", rioters had distributed Octopus cards to their accomplices casually on the streets. We should examine if such acts are illegal. In the absence of real-name registration, everyone can use and purchase an Octopus card anytime, which is a problem, and this has also posed a problem to law enforcement. For this reason, the implementation of a real-name registration system for electronic consumption will have a positive effect on Hong Kong's financial system. While ensuring that the use of Octopus cards will not be abused, it can also plug the loophole. LP and I think that FS has wasted the opportunity to introduce real-name registration for Octopus cards by taking advantage of the issue of electronic consumption vouchers. Anyway, the Government should also pay attention to the implementation details of the electronic consumption vouchers, and should particularly prohibit the use of electronic consumption vouchers for online purchases. Although FS has made it clear that purchases can only be made on local websites, there may still be a chance for the public to buy non-local brand products. Hence, the most effective approach is to encourage the public to go out for spending, as this would ensure that the money is spent in the local market 5158 LEGISLATIVE COUNCIL ― 21 April 2021 and the effects that this $36 billion may bring about will not be undermined. In addition, the Government should also set a validity period to prevent the public from saving the vouchers for future use, thereby maximizing the effects.

In addition, the third wave of the epidemic which came immediately after the Government handed out $10,000 to each eligible Hong Kong resident in July last year, has again led to the closure of many scheduled premises. In fact, the catering industry originally intended to offer a 30% discount in July and a 20% discount in August last year. Unfortunately, members of the public were unable to spend the money from the cash handout. Based on this experience, I must call on the Food and Health Bureau not to make the same mistake again. After the $5,000 worth of consumption vouchers is issued, the Bureau should learn from previous mistakes and show mercy by not closing restaurants and other scheduled premises "across-the-board" again. Western governments are accustomed to adopting a brutal "across-the-board" approach, thinking that closing down all premises "across-the-board" is a way to show that action has been taken. However, this is definitely ineffective. Therefore, I have been urging FS to join the epidemic prevention team so that he can make his voice heard in the discussion on anti-epidemic measures. After other team members weigh and consider the economic factors, they will have to strike a balance between the economy and epidemic prevention.

Furthermore, I would like to talk about the SME Financing Guarantee Scheme ("SME Financing Scheme"). The proposal was also made by LP during the SARS outbreak in 2003, which aimed to help SMEs tide over their difficulties. We are glad to see that the Government has introduced this timely initiative to help the people and ease their hardship after listening to LP's views and making adjustments in the light of the actual situation.

LP would like to thank the Government for raising the loan ceiling for each enterprise under the SME Financing Scheme to $6 million and extending the interest-free repayment period to 18 months. We also support the Government's introduction of PLGS, which provides an additional financial option for the unemployed. This Scheme provides to the unemployed and self-employed loans up to a maximum of $80,000, subject to a maximum repayment period of up to five years. I would like to thank many banks, such as the Bank of China, for their strong support to the catering industry when the Government provided subsidies to the industry last year. I hope that all banks will help to approve LEGISLATIVE COUNCIL ― 21 April 2021 5159 loans under PLGS this time. I understand that $80,000 is not a large amount and many people may borrow from finance companies in their personal capacity, but we hope that the banks can provide assistance to those in need of personal loans.

After praises come criticisms. In my view, some policies implemented by FS are inadequate. I hope that FS and the Administration will put my views on record for further consideration. First, I would like to talk about the manpower shortage of doctors. According to paragraph 156 of the Budget Speech, the Government will earmark funding to support the Hospital Authority in providing sufficient manpower for the public healthcare system and easing the pressure on healthcare workers. However, I must tell FS that the availability of funding is not sufficient to retain doctors. While doctors can earn $1 million a month in private practice, they can only earn $200,000 in public hospitals. Even if the Government is really willing to increase their salaries by five times, there will still be a shortage of doctors. Currently, there are only two doctors for every 1 000 people in Hong Kong, compared to 2.9 doctors for every 1 000 people in our great Motherland.

Even if the Government does raise the salaries of doctors in public hospitals, the salaries of their counterparts in private hospitals will also increase correspondingly. As such, this proposal may not necessarily bring much benefit. FS may consider granting funds to build an additional medical school to train more doctors. Unfortunately, it will take 10 years to achieve this goal even if the Government is willing to provide funding. For this reason, I hope that the Government will introduce the Medical Registration (Amendment) Bill 2021 to the Legislative Council for scrutiny earlier than scheduled, so that the Bill can be passed soon.

In addition, I would like to criticize the Government for failing to address the rent issue amid the epidemic. During the "black-clad riots" earlier, I have been writing to major landlords to urge them to reduce rent. It turned out that many landlords did reduce rent. However, some unscrupulous landlords have even increased rent, not to mention reducing a single cent of rent. In fact, under our "2 plus 2" rent waiver proposal, which has drawn reference from Singapore's practice, the Government will pay two months' rental and the landlords will be required by law to waive another two months' rental. The proposal is not applicable at any time, but only when we are in a state of public health emergency under the Prevention and Control of Disease Ordinance (Cap. 599). And yet, this will definitely be helpful to SMEs in the retail and catering industries. 5160 LEGISLATIVE COUNCIL ― 21 April 2021

These sectors are desperate to see the introduction of this "2 plus 2" rent waiver proposal by the Government. I hope that FS will rectify the situation. Despite FS's previous opposition to our proposal, I hope that he will reconsider it and play a leading role in the Government in implementing this proposal.

Lastly, I would like to express our gratitude to the Government for recently providing an additional $400 million in subsidy to scheduled premises which have been closed for business, including bars or pubs, karaoke establishments, night clubs and other scheduled premises. While $400 million is not a small amount, I urge FS to reconsider granting these premises additional subsidies as they have been closed for business for five months so far. In fact, FS may also discuss with the Chief Secretary for Administration. I have also accompanied representatives of those sectors to meet with the Chief Secretary for Administration on a number of occasions. Will the Government consider further increasing the amount of subsidies? I would like to point out that many employees of the affected scheduled premises, as well as self-employed persons working there, such as musical performers, have indeed been out of work for five months. Will the Government increase the amount of subsidies to help them tide over their difficulties? Living under miserable conditions, they have no one to borrow money from because all of their friends are also in dire straits.

Deputy President, for the above reasons, LP and I will also support the Appropriation Bill 2021. I so submit.

MRS REGINA IP (in Cantonese): Deputy President, I speak in support of the Budget of the Financial Secretary ("FS"). This Budget was announced on 24 February, and nearly two months have passed so far. During these two months, the economic development of Hong Kong has fully shown us the strengths and weaknesses of Hong Kong's economic system. No doubt the financial industry is its strength, because the flow of capital is not affected by border control. For this reason, the financial industry in Hong Kong outshines others on the strength of the continuous inflow of capital from the Mainland or other places.

Besides, it has been heard in recent months that trade has recovered. It is not because Hong Kong's performance is particularly outstanding, but rather because of the strong exports of our country. Is that so, Secretary? In view of this, as Hong Kong is a small and open economy, its booms and busts are inseparable from the development of the country.

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Currently, the financial industry is increasingly important for Hong Kong. I would like to take this opportunity to mention a few points. The first one is consumption vouchers. During the meeting with FS in January last year, New People's Party had already proposed that consumption vouchers should be issued instead of "handing out cash", and the reasons are more or less the same as those given by Mr Tommy CHEUNG. In case of "cash handouts", people can save the money or use it for other purposes or travelling abroad. In Economics, this is called leakage, meaning that the money cannot be used within the domestic economy. However, the issuance of consumption vouchers can ensure that the money is used within the domestic economy. For this reason, I think the issuance of consumption vouchers is very reasonable under the prevailing weak domestic economic conditions.

Many people have asked me: Why must the Government make it so troublesome by issuing the consumption vouchers in five months? This is because the Government's money is limited, and it is not desirable to issue consumption vouchers totalling more than $30 billion all in one go like displaying fireworks. It is hoped that by issuing the consumption vouchers in monthly instalments, the multiplier effect will slowly emerge. Some women said that $1,000 is not enough for buying a handbag, which is sold at $40,000. That being the case, they can pay the outstanding $39,000 themselves, which in effect can propel the economy. Please remember to give more money to your wives. I think the issuance of consumption vouchers is a good thing.

I remember that during our meeting with FS in January last year, he had asked the then Secretary for Financial Services and the Treasury Mr James LAU to explain to us time and again why the issuance of consumption vouchers was not feasible. I am so glad that, probably to respond to the urge of Mr Tommy CHUENG, they suddenly became smarter and did it one year later. They have even invented electronic consumption vouchers. However, I would like to ask the Government why only one type of technology has been considered. When procuring vaccines, the Government has selected vaccines developed from three different technology platforms. According to my knowledge, the authorities have listened to the advice of the Hong Kong Monetary Authority in respect of the Government's issuance of electronic consumption vouchers, but only selected Stored Value Facilities. I had approached the Innovation and Technology Bureau, but it has not participated in it at all, whereas the Government Chief Information Officer (GCIO) has not given any advice either. The Government uses one type of technology only in this regard.

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Four companies have now been selected. We believe Octopus Cards Limited ("OCL") will benefit most. I do not have strong views about which companies will benefit, but I think that the electronic consumption vouchers must meet a few requirements. First, they must be inclusive with a wide coverage. Rather than facilitating the public to spend at large chain stores and supermarkets only, the electronic consumption vouchers must be able to help the most underprivileged in the community, including the people hawking in wet markets or streets, and those who normally do not use Octopus cards. Some people have told me that by that time, OCL will be very generous and provide Octopus validators for free without charging any rental fees. However, some people said that the value deducted by tapping Octopus cards on validators in the wet markets is not accurate due to the humid environment.

Of course, OCL is willing to provide validators for free because it hopes that tenants will continue to rent their validators after using them for five months, which is a profitable business. The point is that, OCL is believed to be the most advantageous among the four contractors, so what is the commission percentage charged to make lucrative profits? OCL normally charges a commission of 3%, and many people are not willing to use it after learning its high commission. The Government told us that OCL would charge a commission of 1% to 2% by that time, but actually OCL charge zero commission to reward the public for this profitable business.

While the major shareholder of OCL is the MTR Corporation Limited ("MTRCL"), the major shareholder of MTRCL is the Government. Why can't they charge zero commission? This is a way to return wealth to the people. The Government should seek the best possible arrangements on behalf of the public. Meanwhile, the Government must implement the relevant scheme as soon as possible, and ensure that the coverage is broad enough to help the underprivileged. As for WeChat Pay, Alipay or the like, it is very troublesome or simply impossible for the elderly people who are using very simple mobile phones to use such applications.

Perhaps, the Government has a very profound intention. It has been heard that the Government will create some posts to hire unemployed people to explain to the elderly about how to use WeChat Pay. However, as the mobile phones of many elderly people are probably very basic and simple, will the Government give out mobile phones for free to the elderly just as in the case where Secretary YAU gave out television sets for free to the elderly during the switchover from LEGISLATIVE COUNCIL ― 21 April 2021 5163 analogue to digital television broadcasting in the past? I do not know. After all, the launch of electronic consumption vouchers by the Government must be at a low cost. The Government informed us so early that this scheme will cost $600 million, has it made a deal with the contractors? Can the commission be reduced to nil? OCL should charge zero commission, because it is actually the one to benefit when so many people are using Octopus cards. Second, the Government should expeditiously implement the scheme and the sooner the better. Third, assistance should be given to the Government in respect of technology innovation.

Moreover, the Government has not explained to us about one point, which we did not have time to ask during the special Finance Committee ("FC") meeting last time, and that is, the consumption items to be covered. As for goods, I can understand easily that the consumption vouchers could be used to purchase vegetables. Yet, what services will be included? Will massage be included? There are many types of services, for example, tutorial services. How about private tutors hired to teach dancing and singing? The scope must be specified. Thus, there are still many questions about electronic consumption vouchers. I hope that government officials can answer these questions.

(THE PRESIDENT'S DEPUTY, MS STARRY LEE, took the Chair)

For the financial aspects, there is also one issue that we did not have an opportunity to raise at the special FC meeting. I hope that the Government or FS can expeditiously clarify their stance on Special Purpose Acquisition Company ("SPAC"), which has stirred up quite a row in the United States. Some experts have explained to me that this is something new in the capital market. As a group of celebrities in the capital market have the trust of people, they can thus gather a huge amount of capital for listing purposes. In fact, the companies concerned are only shell companies which have nothing except for capital. With capital, these companies can conduct acquisition.

SPAC has achieved great success in gathering capital in the United States. It has been heard that up till now, SPAC has gathered US$100 billion. Recently, there is a super merger where a SPAC company merged with Southeast Asia's Grab―a company similar to Uber―at a cost of US$40 billion. Singapore has kept making eyes at SPAC by indicating that it welcomes the listing of SPAC 5164 LEGISLATIVE COUNCIL ― 21 April 2021 companies and even wishes to become a SPAC hub. Unlike Hong Kong, Singapore is not so lucky to have the inflow of capital from the Mainland from time to time. It has thus heightened its attention on such capital. How about Hong Kong? During my meeting with Mr ALDER of the Securities and Futures Commission ("SFC"), he told me that he objected the proposed listing as SPAC companies were shell companies only. SFC is specialized in combating shell companies, and does not allow reverse takeover (RTO) to take place either. How can the Government change this stance? It is impossible for Hong Kong to sit back and allow Singapore to seize all the capital without getting any. How should the Government regulate SPAC then? It can be regulated. For example, SPAC must not be split into smaller ones for sale in banks as in the case of Lehman bonds, and only professional investors―persons investing at least US$1 million―rather than those at the retail level are allowed to participate in SPAC deals. This will make a difference. I hope that FS can answer these questions on SPAC. Hong Kong should brook no delay if it wants to win the business.

Besides, I am very sympathetic towards FS because the Government's recurrent expenditure has indeed increased significantly over the past few years. As he has pointed out in the Budget, since the year of 1997-1998, the recurrent expenditure has increased by 200% or two times. The expenditure on education, welfare and health has increased by 45% over the past five years. While the one-off fiscal deficit experienced by Hong Kong this time is not a big problem, recurrent expenditure materially exceeding recurrent income is nevertheless a structural problem. I hope that FS can talk about his views on the creation of new types of taxes in his reply, especially the digital services tax (DST) which is being implemented in Europe (The buzzer sounded) …

DEPUTY PRESIDENT (in Cantonese): Mrs Regina IP, your speaking time is up.

MR CHAN HAK-KAN (in Cantonese): Deputy President, I speak in support of this Budget.

Deputy President, as the saying goes, "even the cleverest housewife cannot cook a meal without rice". I understand very well the difficulties faced by the Financial Secretary ("FS") in preparing this Budget. Of course, when the LEGISLATIVE COUNCIL ― 21 April 2021 5165 economy was thriving in the past, many Members requested FS to "hand out candies" to share the fruits of economic success with the community. However, in these hard times of epidemic, Members in this Council hope that FS will introduce more relief measures. Yet, I know that Hong Kong's economy is now having a difficult time and the Government is going through a deficit period, as FS forecasts that a fiscal deficit may be recorded in the next four years. Therefore, we need to consider one question together: Should the Government increase the magnitude of relief measures or tighten its belt now?

Many economists have divergent views on this question, which can be broadly classified into two groups. The first group advocates increasing public expenditure to stimulate the economy. On the contrary, the other group takes a diametrically opposite stance, embracing the principles of fiscal prudence and keeping expenditure within the limits of revenues. I do not know the answer to this question because I am not an expert in this area. However, I would like to cite an example. Members may recall that Greece's debt crisis led to the bankruptcy of its government several years ago. Greece is a welfare state which basically "hands out money" constantly and spends irresponsibly. Therefore, in the face of a fiscal deficit and imminent bankruptcy, there were views calling on the Greek Government to stop spending extravagantly and limit its welfare spending.

However, is Hong Kong in the same situation as Greece was? Our situation is different. Hong Kong has a very robust financial position. In the past, a huge fiscal surplus was recorded every year, and the amount of fiscal surplus even increased year by year. Former FSs finished their terms with a larger surplus than their predecessors had. Therefore, in my view, as we have more fiscal reserves and greater financial capacity than other countries, we may put more efforts in social welfare and poverty relief, on top of spurring the economy.

Overall speaking, I consider this Budget acceptable. As we said on the day the Budget was announced, FS has demonstrated a commitment to coping with the epidemic and boosting the economy in this Budget. Nevertheless, I believe FS has heard many times, and Honourable colleagues have just mentioned, that the Budget has not given enough support to the unemployed. My party, the Democratic Alliance for the Betterment and Progress of Hong Kong, or I have often requested the provision of short-term unemployment assistance, which apparently is not taken on board in the Budget. In the end, the 5166 LEGISLATIVE COUNCIL ― 21 April 2021 proposal raised by Secretary Dr LAW Chi-kwong is adopted, that is relaxing the application requirements for the Comprehensive Social Security Assistance ("CSSA") Scheme. Pardon me, Secretary Dr LAW, I do not mean to hurl criticisms at you whenever you come here, but I consider it necessary for this Council to discuss this suggestion from time to time.

While both Secretary Dr LAW and FS are well aware of the unemployment and CSSA figures, we, as Members, often see some pretty tragic cases in the community which Members may find inconceivable. Now I would like to recapitulate a television news report about the homeless.

Deputy President, I wanted to cry after watching the report that day. There was an old homeless man called Uncle Ming. The first remark I would like to make to Secretary Dr LAW is that "Secretary, please take a look and do not play with your phone". Uncle Ming said in the interview that if he had run out of drinking water, he would obtain water from the toilet managed by the Leisure and Cultural Services Department ("LCSD"). His miserable condition has struck me deeply. This old man was holding a meal box with only a tiny piece of thin meat patty and few vegetables given by a social enterprise, but he ate with great relish. This is our society. The old man used to work in a tea restaurant, but became unemployed after the outbreak of the epidemic. He was expelled from a subdivided unit after failing to pay the rent. He put his belongings in a back alley but were all stolen. So where did he sleep at night? He would sleep in a McDonald's outlet if it was opened, but had to sleep in a park when these outlets were closed at night amid the epidemic. Secretary, he did not even afford to buy drinking water when he was thirsty and had to drink the water collected from the LCSD toilets. Is this our Hong Kong? He would have obtained some support from short-term assistance if it had been in place.

Secretary, you may say that a poor soul like Uncle Ming should apply for CSSA. Why does he not apply for CSSA? Is this because he is stupid? This is because Hong Kong people do not want to apply for CSSA. Secretary, while you are sitting in an office doing your job as a Director of Bureau and dealing with cold figures, we are coming across such heartrending stories. I believe this is definitely not an isolated case and there may be many others more miserable than Uncle Ming in the community. Given the huge fiscal reserves, why does the Government not help them? It is possible that short-term unemployment assistance will be subject to abuse, or subsequently turn into long-term LEGISLATIVE COUNCIL ― 21 April 2021 5167 unemployment assistance as the Secretary has remarked, and there is no turning back. In that case, the Secretary might as well impose a cap. Is the Secretary really not going to help them?

Deputy President, in fact this Budget also has merits, which are measures that provide support for the public. For example, the issuance of consumption vouchers in five instalments with a total value of $5,000 to each member of the public will be a great help to the grass roots. However, I guess when FS was formulating this measure―pardon me, this case has made me quite emotional―he might not notice, and some Honourable colleagues have also mentioned just now, that an administration cost of some $600 million would be incurred for issuing the vouchers in five instalments, and this sum could have helped over 20 000 people like Uncle Ming. As some Honourable colleagues have just suggested, given that the Government is one of the major indirect shareholders in Octopus Cards Limited, could it request the latter not to charge any administration fees? Then the Government can really spend the money on the public, rather than allowing the electronic payment operators concerned to take this chance to expand their business and make handsome profits. This is not what FS wants to happen. Therefore, I very much hope that the Government will discuss with these operators to see if the administration fees to be charged can be rebated to the people. Actually, rebate is not a good idea. These operators should simply refrain from charging any administration fees. Otherwise, going back and forth would incur a higher administration cost.

As Secretary Frank CHAN is present, I also wish to talk about another matter, and that is, the Government will carry out a number of projects in the future. In view of the increasing project costs, the grass roots will feel very anxious if every project experiences cost overrun or involves substantial costs. It is certainly a good thing to make investment for the future and infrastructure projects. However, if the Government injects funding into the social welfare or social security budget to help more grass-roots people, it will be easier for us to support, or convince the public to support, these infrastructure projects.

Deputy President, I so submit. I have forgotten what I want to say, but I would like Secretary Dr LAW Chi-kwong to take another look at the case of Uncle Ming and help him by providing short-term unemployment assistance. Thank you.

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DR PIERRE CHAN (in Cantonese): Deputy President, the persistence of the COVID-19 epidemic has not only threatened the health of the public, but also impacted the global and local economies and reduced revenue of the Government. After last year, the 2021-2022 Budget ("the Budget") has again recorded a deficit, and it is expected in the next four consecutive years from 2022-2023 to 2025-2026, budget deficits will also be recorded. I hope that reduction in government revenue will not affect the recurrent expenditure on health, welfare and education, and undermine the rights and interests of the grass roots who rely on welfare and public healthcare services.

The estimated expenditure on healthcare is $95.943 billion, which represents an increase of about 7.9% compared to last year and accounts for 18.5% of the overall current expenditure. A funding of $80.68 billion has been earmarked for the Hospital Authority ("HA"), representing an increase of 4.7% which is smaller compared to last year. If the rate of increase fails to catch up with the demand for public healthcare services, I hope that the Financial Secretary ("FS") can adopt the proposal put forward by Prof YUEN Kwok-yung and I to establish a $10 billion public healthcare stabilization fund at the appropriate time to subsidize the insufficient healthcare funding. I hope that public healthcare services will not be affected like the past, when voluntary retirement packages were offered to cut services so as to maintain the standard.

In this deficit budget, the part concerning healthcare can be described as "old wine in old bottles". Apart from the funding of $4.7 billion allocated from the Anti-epidemic Fund to support the anti-epidemic work of HA; an additional $3.044 billion provided for HA to establish and operate two facilities, namely, the Community Treatment Facility at the AsiaWorld-Expo and Hong Kong Infection Control Centre at the North Lantau Hospital; and more than $8.4 billion earmarked for the procurement and administration of COVID-19 vaccines and other anti-epidemic measures, many items are actually repeats of the funding proposals in the previous budget. For example, the University of Hong Kong, The Chinese University of Hong Kong and The Hong Kong Polytechnic University have received a total funding of about $1.9 billion for short-term renovation works and facility enhancement in the past two financial years. In the budget of last year, funding has been earmarked to support HA in retaining talents and reducing the pressure on medical staff. The relevant measures are being implemented one after another. In addition, recurrent expenditures amounting to $650 million have been earmarked last year for setting up District LEGISLATIVE COUNCIL ― 21 April 2021 5169

Health Centres ("DHCs") in six other districts, including the two DHCs in Sham Shui Po and Wong Tai Sin that are expected to commence operation in the next two years, etc. These are all old policies.

In relation to anti-epidemic work, frontline medical personnel have taken on an important and high-risk task, and the authorities have the responsibility to ensure that they receive equal treatment, as well as adequate support and protection. The Centre for Health Protection ("CHP") requires its employees to work 30 consecutive days and work overtime for at least 30 hours in a month before they are eligible to receive Hardship Allowance. However, these conditions are not applicable to staff of other divisions of the Department of Health seconded to CHP, thus creating different requirements for obtaining Hardship Allowance for the same job, which will undermine staff morale. The Government should review the policy on overtime work for staff of different departments as soon as possible.

Since the outbreak of COVID-19, private doctors and dentists have been providing healthcare services to patients in the community during the epidemic to strictly prevent the spread of the virus. These doctors and dentists must have sufficient protective gear and disinfectants in their clinics before they can fight this protracted battle. In the past year, not only were private doctors and dentists required to finance anti-epidemic equipment themselves, they also encountered operational difficulties. Should a shortage of protective equipment occur or visitors be confirmed to be infected, many clinics will be forced to close, which will definitely increase the burden on public healthcare services. I have repeatedly suggested the Government to provide subsidies for private medical and dental clinics. Unfortunately, my suggestions have not been adopted by the Government or in the Budget. I will nonetheless continue to fight for the interests of our sector.

In subsidizing vaccination, if the Government tries to restrict the people's choices by administrative means, it may defeat its own purpose. I hope the Government will pay attention to this and not let the issue of vaccination create public resentment. I must reiterate that I have had two shots of the coronavirus vaccine, and call on everyone to get vaccinated as soon as possible.

The Government applied to earmark $800 million from the Anti-epidemic Fund last year for introducing CuMasks which eventually cost $280 million; and there is still a stockpile of 470 000 pieces now. Thus, in carrying out 5170 LEGISLATIVE COUNCIL ― 21 April 2021 anti-epidemic work, the Government must abandon its bureaucratic mentality and humbly listen to expert opinions to avoid repeating the same mistakes and waste the hard-earned money and efforts of taxpayers and Hong Kong people.

From September 2019 to 31 July 2020, the Kwai Tsing District Health Centre recorded a total of 6 000-plus members and 28 000 activity participants, the number of which was far below the expected 55 000. The Government should expeditiously review the service effectiveness of the DHCs, otherwise establishing a few more DHCs will not benefit more members of the public, nor will it solve the core healthcare problems mentioned by Members. We do not want the proposal to become another "white elephant" healthcare project.

As I said at the beginning of my speech, the coronavirus epidemic has not only threatened the health of the public, but also severely hit the economy. The Chief Executive recently said that the public would put the blame and vent their grievances on the Government for things which has nothing to do with it, such as the epidemic. But, does the volatile epidemic situation have absolutely nothing to do with the Government? In the past, not only me, but also some infectious disease experts have reminded the Government to implement anti-epidemic measures as decisively as in the Mainland, Taiwan and Macao, including implementing quarantine measures at the border ("border-closing" measures) and strict quarantine measures for people entering Hong Kong. However, the Government has adopted some opinions of the experts but not others, which resulted in the volatile epidemic situation and indirectly made the local economy unable to recover for a long time. Many businesses have come to a standstill and failed to generate any income for a prolonged period. Despite the introduction of the Employment Support Scheme, the amount of subsidies provided is limited and cannot cover all the expenses. As a result, many enterprises cannot cope and have to close down, and the unemployment rate naturally rises.

The Government recently announced that the unemployment rate was 7.2%, a record high since the SARS period; the number of unemployed was 260 000 and more than 150 000 were underemployed. There are strong voices in society and the Legislative Council demanding the Government to support the unemployed. On the 18th of last month, a Member's motion on "Supporting the unemployed and the underemployed" was passed in this Chamber. Although the motion is not binding, it reflects the consensus of the society. However, the Budget has not responded to the voices of the society, nor has it proposed to LEGISLATIVE COUNCIL ― 21 April 2021 5171 establish an unemployment assistance fund to help people who became unemployed because of the epidemic. The Budget proposes the establishment of a 100% Personal Loan Guarantee Scheme for the unemployed, under which the Government will provide a total guarantee commitment of $15 billion. Some commented that the plan was unrealistic and failed to help the unemployed. Others believed that the plan could be offered as option, but it should not replace unemployment assistance and other relief measures.

In fact, the most direct way for the Government to help people in financial difficulties is to directly pay them a sum of money, just like the proposal in the budget last year to give a direct cash handout of $10,000 to each adult resident. I do not know why electronic consumption vouchers will be issued this year instead. When I proposed my suggestions on the Budget to FS, I mentioned that in view of past experience, if the Government intended to give handouts, a more direct approach should be used. First, this could save administrative costs because just as some Members said earlier, such costs could be very high. Second, this could immediately help the people with cash flow problems. However, the payment offered this time has not only been halved, but will be issued in the form of electronic consumption vouchers. This will not only increase administrative costs, but also require that consumption be made via electronic platforms. Has it ever occurred to the Government that some people are in genuine need of that $5,000 for buying food, paying rent or emergency purposes?

The Government says that the people can choose to collect the payment with their Octopus cards. Yet, people cannot pay rent by Octopus, and not everyone will buy food in supermarkets. The grass roots may choose to buy cheaper food in the markets, and there is no reason to force them to buy more expensive things in supermarkets. Furthermore, simply put, the use of electronic consumption vouchers for consumption at large companies and small businesses is very different. Thus, the Government should think twice whether it should "dole out cash" by way of electronic consumption vouchers.

In the past year, not only members of the public have been upset by the epidemic, but major political and economic changes have taken also place in Hong Kong. Many people cast doubt on whether Hong Kong's status as an international financial centre can be maintained. In the past, Hong Kong has always served as a window to the Mainland of China and the rest of the world. The freedom and the rule of law in Hong Kong have attracted investment and 5172 LEGISLATIVE COUNCIL ― 21 April 2021 trade and now, all of these things cannot be taken for granted. The epidemic will be over one day, but the key to recovery of the economy and society is whether the authorities can rebuild mutual trust between public officers and the people on the one hand; and the confidence of the rest of the world in Hong Kong's free economy on the other. If Hong Kong cannot maintain its unique position, foreign capital will continually be withdrawn and a large number of professional people will emigrate to other countries. Hong Kong will then become an ordinary city, not only will it no longer prosper, its contribution to the country will also be reduced.

I so submit. Thank you.

MR MA FUNG-KWOK (in Cantonese): Deputy President, following the global spread of the novel coronavirus, Hong Kong has experienced four waves of epidemic. In order to fight the epidemic, the Government has repeatedly tightened social distancing measures to, among others, impose group gathering restrictions, suspend classes and close premises. Many industries and the overall economy are hence hard hit. Against this background, it is a real challenge to draw up the Budget in the midst of the epidemic.

Owing to the epidemic, the local economy contracted by 6.1% last year. To ease the hardship of the people and industries affected by the epidemic, the Government has allocated more than $300 billion for the establishment of the Anti-epidemic Fund and the introduction of measures proposed in last year's budget to support enterprises, safeguard jobs, stimulate the economy and relieve people's burden. Although the local economic growth is expected to pick up in the second half of this year, the Government continues to propose counter-cyclical measures costing $120 billion in the Budget as the epidemic persists. The budgetary direction of stabilizing the economy and relieving people's burden is worth supporting.

At the same time, in order to maintain fiscal prudence and achieve financial stability, the giveaway measures have been reduced. Apart from cutting the additional allowances which have been provided to the recipients of the Comprehensive Social Security Assistance and "fruit grant" for the past 14 years, the Government will also slash various tax concessions. What is more, the Government will, instead of giving a cash handout of $10,000 this year, issue LEGISLATIVE COUNCIL ― 21 April 2021 5173 only $5,000 of electronic consumption vouchers to each citizen. Considering the good intention of the Government to stimulate and boost the economy amid the epidemic, I agree to these initiatives.

Soon after the epidemic broke out in last February, I proposed to the Government an action plan for assisting the sports, performing arts, culture and publication sectors and the introduction of "consumption vouchers for cultural, recreational and sports activities". As a matter of fact, local performance venues and sports facilities have been required to close since the epidemic outbreak. Thus, trade members lost their main operating venues and massive job opportunities. Worse still, school closure has put a halt to many arts education and sports training activities, thereby depriving trade members of their income. Although the Government has launched the Anti-epidemic Fund to support the trade, the subsidies so provided can hardly make up for the losses of trade members. Also, many of our trade members are ineligible for such subsidies.

The trade surely supports the electronic consumption voucher scheme introduced by the Government, and hopes that they will cover consumption related to cultural, arts and sports activities so as to benefit the trade. Unfortunately, the ticketing system of the Leisure and Cultural Services Department is incompatible with the payment tools selected for the scheme. Therefore, it is essential for the Government to promptly tackle this problem, or else most of the members of the culture, arts and sports sectors will be excluded from the consumption voucher scheme. I also urge the Government to provide assistance for the small and medium-sized shops in setting up electronic payment systems, so that they can also share the pie.

Another concern over this scheme is that most of the benefits may eventually go to large consortia and enterprises because small and medium-sized shops as well as recreational and sports service providers are no match for large traders, such as chain supermarkets, convenience stores and restaurants, which enjoy market dominance. Moreover, the consumption vouchers will be issued in a way that encourages the consumption of daily necessities. At the end of the day, the big winners will still be supermarkets or chain stores, and it is likely that the same mistakes in introducing the Employment Support Scheme will repeat. The Government should therefore consider what can be done to benefit the community at large.

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Deputy President, the epidemic has caused the unemployment rate to climb to 7% in this quarter, the peak in the past 17 years. While the catering and retail industries are undoubtedly the epicentre of unemployment, unemployment rate in the arts, entertainment and recreational sectors has rocketed to 10.4%, which is way above the overall unemployment rate. A large number of trade members, especially those who work freelance, have lost their jobs and income. Worse still, many of them do not have any Mandatory Provident Fund accounts and hence cannot benefit from the Employment Support Scheme. Nor are they eligible for the subsidy schemes for the culture and sports sectors under the Anti-epidemic Fund.

Earlier on, I had advised the Government to provide short-term unemployment assistance to the trade members mentioned above, so that a certain amount of cash assistance will be granted to those who can produce proof of unemployment for up to six months to help them tide over this difficult time. The Government has instead proposed a 100% Personal Loan Guarantee Scheme to assist the unemployed, with the effectiveness yet to be known. I hope that the Government will lower the application threshold to benefit freelancers.

In order to stimulate the economy, the Budget has proposed a number of measures to support industries such as financial and innovation and technology, and allocated additional resources to promote the development of cultural and creative industries. Yet, I cannot see many creative initiatives. In fact, the local cultural and creative industries have been dealt a heavy blow by the epidemic. Some sectors are on the verge of collapse and deserve special attention from the Government. Take the film industry as an example. After the epidemic outbreak, there was a time that cinemas had been closed for over 140 days as part of the social distancing measures. Last year, the total box office revenue plunged by more than 70% to $500 million from 2019. Kiosks or food and beverage services barely generated any income. The number of local films released last year hit the decade's low of 34, and now comes a wave of closure of cinemas. The 40th Hong Kong Film Awards, which was originally scheduled to be held in 2021, has been postponed to 2022. For the first time in history, all films produced in these two years will be judged altogether.

There was previously a discussion on an audio-based social media platform about whether the Hong Kong film industry had died. Although the discussion has not reached any conclusion, I am sure there is a high chance for Hong Kong LEGISLATIVE COUNCIL ― 21 April 2021 5175 films to sadly vanish if the Government refuses to increase its support to the industry as well as help trade members cope with the epidemic and retain talents. In fact, the industry has all along been working hard in the hope of keeping Hong Kong films alive. I eagerly hope that the Government will attach greater importance to the film industry, and make good use of the $1 billion injected into the Film Development Fund to give more vigorous support in a timely manner so that it can overcome the adversity. In particular, I would like to point out that film production should not be confined to cinemas and televisions. Internet is also an important platform for people to display their talent. I hope that the Government will provide additional support for nurturing new blood and building a talent pool for the industry.

Now, I would like to talk about the West Kowloon Cultural District ("WKCD"). Although the Government has touched on the development progress of WKCD in the Budget, it seems to have shunned the worrying financial arrangement. When the West Kowloon Cultural District Authority ("WKCDA") reported its financial situation to the Legislative Council last year, it already pointed out that WKCD would incur a deficit of $3.9 billion in the next three years. The so-called ACE (Art, Commerce and Exhibitions) Project, a supposedly stable income source of WKCD, had also been suspended because of the lower-than-expected market response. In view of this situation, I cannot help worrying that WKCD may not be able to ease its financial difficulties in the short to medium run. However, this year's Budget has not given us any account on how the Government and WKCDA will jointly work out some new financial arrangements for WKCD's sustainable and stable development. This is certainly more worrying. In fact, WKCD has occupied a large area of land for an extended period of time. It seems to me that the Government has adopted the "facilities first" strategy but kept postponing the profit-making commercial development in WKCD to avoid criticism, thereby leading to a serious deficit.

Deputy President, in the 14th Five-Year Plan announced this year, the country has proposed for the first time that Hong Kong can develop into a hub for arts and cultural exchanges between China and the rest of the world in the chapter devoted to the affairs of Hong Kong and Macao. This proposal is a kind of concrete support to Hong Kong and we look forward to it. The entire society, especially the industry, is excited about it. But how can this planned vision be realized? How can we seize the opportunities? Apart from developing the cultural and arts facilities in Hong Kong, the authorities should also consider how local development can dovetail with the national development strategies to 5176 LEGISLATIVE COUNCIL ― 21 April 2021 enhance our overall soft power and contribute to the country. In this regard, I hope that the Government can plan early so as to fully capitalize on this golden opportunity.

In respect of sports, this year's Budget has continued to allocate additional resources to local sports and earmarked $318 million to implement a five-year plan for upgrading football pitches. Such initiatives show that the Government cares about sports development. However, over the past couple of years, the Government has failed to take advantage of the imminent completion of the Kai Tak Sports Park in 2023 by proposing strategies to promote the sports industry. Sports development is indeed quite mature in Hong Kong. Many people here are engaging in the sports business, event planning, sports administration, etc. Sports can readily be turned into an industry in Hong Kong. If the software support, including policies and venues, are in place, I trust that the sports industry can become a new area of growth for Hong Kong's economy. I eagerly hope that the Government will give a positive response and expeditiously formulate clear strategies and measures to promote sports industrialization and boost Hong Kong's economic development.

With these remarks, Deputy President, I support the Appropriation Bill 2021.

MR LUK CHUNG-HUNG (in Cantonese): Deputy President, I speak in support of the Appropriation Bill 2021.

Deputy President, concerning the 2021-2022 Budget, one of the points of concern of many people is that it is proposed to raise the rate of stamp duty on stock transfers ("Stamp Duty") by 30% from the current 0.1% to 0.13%, meaning that a buyer has to pay $30 extra when he invests $10,000 in stocks. Although the percentage of increase is not high, it has caused considerable repercussions in the financial services industry.

However, Deputy President, this is a bright spot in the Budget this year that I strongly support. Since late last year, though it seems that our economy has slackened under the epidemic, the stock market gets ahead under economic downturn with fierce speculation in the market. Whenever a new stock is listed, huge amounts of funds in the market will be frozen for the subscription of new shares. For example, $677.7 billion of funds were frozen for Nongfu Spring LEGISLATIVE COUNCIL ― 21 April 2021 5177 which was oversubscribed by 1 147 times. It was the stock for which the largest amounts of funds were frozen at that time. Even larger amounts of funds were subsequently frozen for Kuaishou Technology specializing in short videos, with an astronomical amount of HK$1.28 trillion being frozen. The number of listed companies increased from 1 413 in 2010 to 2 538 in 2020, representing an 80% increase; and the total market value of listed companies increased from $21 trillion in 2010 to $48 trillion in 2020, representing a 129% increase. Coupled with the successive implementation of a number of financial schemes to enhance connectivity, the new listing system has brought a lot of convenience to the market and attracted more quality companies to seek listing in Hong Kong.

The performance of the Hong Kong stock market is highly satisfactory. The average daily turnover has increased from $69 billion in 2010 to $130 billion last year. So, it can be said that the financial sector is the leading industry in Hong Kong and we must have confidence in ourselves. Some members of the financial sector have expressed their worries that the increase in Stamp Duty may affect Hong Kong's status as a financial centre. These are groundless worries and we must have confidence in ourselves and our system. Not only do we have an open and fair system, but also the rule of law and talents. These are the most important elements of the stock market and we need not worry too much about a slight increase in Stamp Duty.

Deputy President, even though the financial sector in Hong Kong is thriving, we also noticed that unemployment rate is steadily rising and the income of workers has decreased. Recently, the unemployment rate has risen to 7.2%, with 260 000 people unemployed and 150 000 people underemployed. The prosperity of a single industry has widened the wealth gap further. With the continuous influx of hot money, the rich can continue to make profits through buying stocks. They can increase their wealth by pressing a few buttons―this surely involves some investment strategies―but are not required to pay tax on stock gains. As a result, there is a growing disparity between the rich and the poor. Meanwhile, standing in stark contrast is the shrinking purchasing power of ordinary wage earners.

Therefore, the Financial Secretary ("FS") has targeted at the stock market this time and slightly raised the Stamp Duty to generate additional government revenues, i.e. additional stamp duty of about $12 billion, which is very reasonable―FS has just returned to the Chamber to listen to my speech; this measure is really superb―it is highly justified to impose tax on a well-funded 5178 LEGISLATIVE COUNCIL ― 21 April 2021 market, and it also complies with the principle of wealth redistribution. Thus, I think the increase in stamp duty is a good start indeed. I also encourage FS to look further into property speculation, which is another culprit causing the disparity between the rich and the poor. He should also study the introduction of property gains tax at appropriate juncture.

Stock trading attracted a large inflow of funds in the past, but they were excessively concentrated on the financial, real estate and speculation industries, leaving the innovation and technology and other industries with insufficient funds. Imposing additional stamp duty will facilitate the flow of funds to new industries. Coupled with other taxation or policy measures, re-industrialization or the development of other industries will be promoted.

From the perspective of public finance, "black-clad violence" in 2019 and the epidemic situation in 2020 have dealt serious blow to various industries and sectors and the fiscal revenues of the Government have also been affected. The Government has introduced a few rounds of anti-epidemic relief measures and FS has also put aside large sums for the purpose. This initiative to save the public and the market encroaches into the purview of other Bureau Directors, and involves a total of $300 billion. As a result, the fiscal reserves have been reduced to a level equivalent only to 12 months of government expenditure.

In view of this, the Government should think of ways to appropriately increase revenues and it is quite reasonable to increase stamp duty when the market is booming. However, we must seriously consider public finance from another angle and examine the Government's excessive reliance on land finance. Land sales revenues in Hong Kong account for about 20% of the overall revenue, whereas stamp duty is more than 10%. Yet, these taxes have to depend on the market situation and are not stable. The Government thus has its hands tied up when it tries to increase some recurrent expenditures and public services. With unstable revenues, it is essential for the Government to broaden the tax base further.

(THE PRESIDENT resumed the Chair)

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Broadening the tax base is definitely not flattering. It is naturally unpopular as tax increases will meet with bitter complaints from the public. And yet, we still have to deal with this issue. First of all, we must figure out the problems caused by the high land price policy. Under the high land price policy, people would inevitably have to pay high land tax, which yields no benefit at all. While half of it will go to the Government, another half will be embezzled by major owners and developers. Many people spend a lot of money, or half of the salaries saved over the years, on mortgage payments. Some family members even have to chip in to help their sons make down payment. Even though members of the public do not buy properties, they still cannot shun the real estate hegemony. At present, we pay around $10 for a bun at any chain store because of the expensive rents. President, various Department Secretaries and Bureau Directors, the burden of the public is already very heavy under the suppression of real estate hegemony and the high land price policy. It is thus very difficult to broaden the tax base. Therefore, the Government must be determined to cut off the bonds between land finance and public finance, and prevent land finance from hijacking the economy. We hope the Government will have the boldness to tackle this issue under the new situation.

Apart from the tax system, I would also like to talk about consumption vouchers, which is another bright spot of FS's Budget this year. He will spend $36 billion to issue electronic consumption vouchers with a total value of $5,000 to each eligible resident. One of objectives is to promote electronic consumption, and another objective is to boost the economy. It is expected that this will bring about a 0.7% increase in GDP.

Nevertheless, I think the Government should not be too optimistic. According to the experience of other places, Taiwan, for example, originally thought that its GDP could increase by 0.66%, but it eventually only increased by about 0.34%. In Japan, the consumption voucher scheme has not attracted much additional consumption either. In any case, I still support this measure because consumption vouchers can stimulate the desire of some people to spend after all. The Government's consumption vouchers may lure some people to buy things that are not so necessary. Some people may choose to have more sumptuous meals as they have been living frugally for some time, while some others may increase spending with the government subsidies or buy necessary items. Even if we take many steps backward and people will only use the consumption vouchers to buy daily necessities or spend them in supermarkets and markets, this 5180 LEGISLATIVE COUNCIL ― 21 April 2021 can still alleviate the heavy economic pressures of the public under the epidemic situation. What is more, members of the public will feel the Government's support for the economy and care for them in the course of consumption.

I would also like to talk about the 100% Personal Loan Guarantee Scheme for the unemployed. Although this scheme cannot completely replace unemployment assistance, FS demonstrated that he has the heart to help workers find another way out. I very much hope that FS can reconsider with the Secretary for Labour and Welfare the unemployment assistance proposal made by the Hong Kong Federation of Trade Unions. The amount of assistance can be discussed and the application method can also be studied. I beg them not to limit themselves to instrumental rationality and refuse to implement the proposal after year-long discussion, which is a drawback of this Budget. I hope that FS and the Bureau Directors concerned will come up with more measures to solve the subsistence problem of the unemployed facing livelihood challenges.

President, I so submit.

DR CHIANG LAI-WAN (in Cantonese): President, I thank the Financial Secretary ("FS") for compiling the Budget. Although I am not satisfied with many parts of the Budget, I can say that it is barely acceptable.

I thank FS for sitting in the Chamber from this morning till now. I thought FS might find an opportunity to leave when he noticed that I was about speak―some Secretaries but not FS have already left―he could have taken the opportunity of paying a visit to the bathroom to leave, but he returned.

Let us get down to business. DAB suggested long ago that the Government should make some changes, but this Budget seems like new wine in an old bottle. It has put forward a proposal similar to "cash handouts" for each person to get a slice of the cake.

I am not sure about the objectives and effectiveness of some funding allocations proposed in the Budget. To a certain extent, running the entire Hong Kong is similar to managing a large company. If someone asks me for funding allocation for the development of new projects, I will certainly ask him how much LEGISLATIVE COUNCIL ― 21 April 2021 5181 money will be needed; the purposes of the fund and how much business turnover will the fund generate. Other departments such as the personnel department will also ask for funding allocations for the provision of employee benefit or the implementation of other programmes. Moreover, funding allocations may be also required in the areas of education, health and medical services, but it is important that we must ascertain the effectiveness. I remember that Peter Ferdinand DRUCKER, the father of modern management, once said, "If you can't measure it, you can't manage it". In other words, you can't manage unless you measure. How can we tell whether a target has been achieved without using any effectiveness indicators or considering any value-for-money factors?

I wonder if Members have read the Outline of the 14th Five-Year Plan for National Economic and Social Development and the Long-Range Objectives Through the Year 2035 (Full Text) published earlier by the country; it is worth reading indeed. The contents are divided into five categories and 20 goals, and all indicators have been set out. For example, how much money will be spent and what objectives will be achieved in the next five years. Everything is crystal clear and all links are interlocking. Sometimes, when a department receives funding for certain tasks, another department may not know what that department is doing and what kind of support can be provided. For more than a decade, the Government has allocated funds amounting to more than $100 billion to science and technology. The Innovation and Technology Fund alone has been allocated more than $30 billion, and another related funding application has recently been filed. For our country, however, indicators related to science and technology have been specified. The number of high-value invention patents per 10 000 people will increase from 6.3 to 12, and the proportion of the added values of the core industries of the numerical economy in GDP will be increased from 7.8% to 10%. All these are clearly specified. We had previously considered funding applications amounting to more than $100 billion and I did ask about the percentage in GDP because I needed the relevant information, but such information was not available back then.

Are there any indicators? The only piece of information that I can dig out is that Chief Executive Carrie LAM set some indicators in 2017, and they involved spending money. She said that the proportion of expenditure on research and development in GDP should be increased to 1.5%, which again involved spending money. The Government vowed to promote the collaboration among the Government, industry, academic and research sectors, in 5182 LEGISLATIVE COUNCIL ― 21 April 2021 which industrialization is certainly very important, so what is the proportion of industrialization in GDP? There is no answer, even up till now. To be honest, I am utterly dissatisfied for sure.

I know the Secretary for Education very well, but as Members may be aware, I have recently criticized him for his work. For many years, the Government and I have supported the Secretary and we have also approved his funding applications every year. This is because we hope that students can have a clear understanding of their aspirations and personality before entering universities, identify the kind of jobs suitable for them and the kind of jobs that the future economy and market will need. In that case, they will have a clear picture before moving forward. A lot of money has been spent over the years, but what results have been achieved? The Secretary said that the funds have achieved some effects, but I hope that he can show me some indicators.

I have previously suggested that the Secretary should look into it or consider what to do. Perhaps we can have lunch and discuss together―my treat or the Secretary's and we may even adopt the "AA" system by splitting the bill. The Secretary should at least find out whether the huge sum of money spent is worth it. FS also nodded to indicate support for my suggestion. The Secretary must do so; otherwise, I will keep exhorting him.

In addition, there are also funds allocated to non-Chinese speaking ("NCS") students. We would like to enhance their Chinese proficiency, but how effective it is after so much efforts and money have been spent? NCS students live in Hong Kong, but they have relatively lower Chinese proficiency due to their family background. Hence, funds should be allocated for this purpose. If the authorities think that this is a pretty good project and another funding application will be filed again after the existing funds have been exhausted, the Secretary should provide the relevant figures or illustrate that the Chinese proficiency of NCS students has been enhanced. In that case, FS will naturally propose the allocation of additional funds. With regard to the Innovation and Technology Fund, it is also copiously covered in the Budget.

As for the healthcare allocation, is an annual increase of 5% to 10% sufficient? In fact, the Government should increase funding allocation for healthcare and education according to the rate of population growth as they are all interrelated. At present, is there one physician, or two to three physicians per 1 000 people? Have we met the standard of 3.5 physicians per 1 000 people set LEGISLATIVE COUNCIL ― 21 April 2021 5183 by the World Health Organization? The Bureau has not provided the relevant figures because they are also aware that there are inadequate physicians, they thus refuse to make it clear. We have taken pains to pursue consistently and Secretary Prof Sophie CHAN has been severely pressurized by us. I know FS once said that a lot of problems would have to be gradually improved, I very much understand that and hope that FS will make concerted efforts with us.

About funding, I think that only necessary expenditures should be made and unnecessary expenditures should be avoided. Nowadays, there are a number of infrastructure projects underway in universities. I realized after checking that the Government has increased the funding for UGC. All universities have their small vault: the University of Hong Kong has $29.2 billion; The Chinese University of Hong Kong which ranked second has $26.7 billion; The Hong Kong University of Science and Technology which ranked third has $14.3 billion and The Hong Kong Polytechnic University has $10.5 billion. Even though the universities have so much money, they continue to apply for funding allocation for repairing damaged facilities. I certainly disagree with the funding allocation, but the media made a big fuss over my comments, saying that I did not support the funding allocation. I do not care about what they said as I am open and poised, and I am not seeking personal gains. Why do those universities need to save up such a huge amount of money? They said that the money would be put aside for research and development or other purposes, but would also be used to pay for the infrastructure projects, right? There were previous requirements that after the Government provided the sites, construction should then commence. Why has the practice changed? They argued that the Government had requested the construction of additional facilities, and so it had to foot the bill. Is this appropriate?

As for the Air Mail Centre, I do not have time for a leisurely discussion now. If we anticipate that something is doomed to fail, they should not be pursued. Taking the "Lantau Tomorrow Vision" as an example, a Mainland official once asked me why we had to spend so much money on an infrastructure project covering an area of only about 10 sq km when the entire Greater Bay Area has an area of 56 000 sq km (The buzzer sounded) …

PRESIDENT (in Cantonese): Dr CHIANG Lai-wan, please stop speaking.

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MR KWOK WAI-KEUNG (in Cantonese): President, this year's Budget forecasts a fiscal deficit of over $100 billion. Against this background, some "handout" measures have still been implemented, including $5,000 consumption vouchers, $1,000 electricity subsidy, and the provision of an extra allowance to social security recipients equal to half a month of payment. Some other measures such as loan schemes are also rolled out. I cannot say the Financial Secretary ("FS") has done a bad job, but he cannot get 100 marks. Why do I say so?

As we all know, one of the Government's obligations in relation to public finance is redistributing wealth and thereby narrowing the disparity between the rich and the poor. I do not think this Budget can achieve this purpose, about which I will give a detailed explanation later.

First of all, I would like to talk about some honours Hong Kong has won recently. Last year, the Economist Intelligence Unit published a report on the worldwide cost of living, in which Hong Kong shared the top spot with Paris and Switzerland. Besides, according to some other reports, Hong Kong has been the world's priciest residential property market for several years in a row with an average price of US$1.2 million, ahead of Munich and Singapore, which rank second and third respectively. In the highest rent list, Hong Kong does not take the first place, but still comes third with an average monthly residential rent of around US$2,600. Meanwhile, Hong Kong's Gini coefficient has remained at a high level for a very long time, reaching 0.539 in 2016. In this respect, Hong Kong is second to none.

Given the prolonged wealth inequality, it is not a wonder to see social unrests, social disharmony and a lack of development direction. The Hong Kong Federation of Trade Unions ("FTU") has all along been concerned about the Government's measures to support underprivileged groups, and held the view that the Government is duty-bound to optimize the use of resources and funding to strengthen the support for the grass roots and narrow the wealth gap.

What is the situation now? According to the Hong Kong Poverty Situation Report 2019 published in late 2020, Hong Kong's poverty rate still reached 15.8% after recurrent cash policy intervention, with over 1.09 million people living in poverty. The poverty rate of working households not receiving Comprehensive Social Security Assistance ("CSSA") stood at 8.1%, with almost 150 000 poor households and 480 000 poor persons. As estimated in the Long LEGISLATIVE COUNCIL ― 21 April 2021 5185

Term Housing Strategy Annual Progress Report 2020 published by the Transport and Housing Bureau at the end of last year, among the 120 000 inadequately housed households, 70% (or 90 000 households) lived in subdivided units, and 20 000 households lived in housing units made up of temporary structures. Since the outbreak of the epidemic, the poverty situation in Hong Kong has been deteriorating. The poorer one is, the more misfortune one suffers. The unemployment rate has not reached its peak yet. The latest figure has climbed to 7.2%, and hopefully it will go down later. Hong Kong's household debt-to-GDP ratio rose from 85% in the second quarter of last year to a new high of 87.7% in the third quarter. Will the figure for the fourth quarter go up again? In addition, there has been a surge in the number of people seeking assistance from food banks. No increase or only a slight increase has been noted in the wages, and some people have even lost their jobs, whereas public transport fares have risen.

Unfortunately, the relief measures proposed in the Government's Budget are hardly adequate. The Employment Support Scheme is over in the blink of an eye. Since then, some departments have sounded an optimistic note, saying that the future employment situation will improve, but we all know that the employment situation is correlated to the epidemic situation. In fact, the epidemic situation in Hong Kong seems volatile, and asymptomatic cases with unknown sources still exist in the community. As a result, people have to remain vigilant and cannot resume their previous normal lives. Many grass roots are even desperately hard up. As they have been unemployed for some time, they can only live on savings, thus losing a pillar of retirement protection.

According to the latest report published by Oxfam, the fortunes of the rich will return to pre-epidemic levels in nine months after the epidemic. In contrast, after the poor have exhausted their savings, they will not have any capital to snowball into a fortune. Instead, their liabilities such as credit card debts and loans from families and friends will snowball. Their assets may not return to the pre-epidemic levels even by 2030. Amid the epidemic, the disparity between the rich and the poor in Hong Kong has become more prominent and more striking, which will bring a more profound impact.

FS has repeatedly whined about being broke in the Budget. Nevertheless, the fiscal reserves of the Government still stand at some $800 billion, equivalent to one year of recurrent expenditure. Even with the fiscal reserves of some $800 billion, the Government still whines about being broke. Let us think about 5186 LEGISLATIVE COUNCIL ― 21 April 2021 those poor people who have no jobs and no money in their pockets. In no way can they sustain their living for a year. Perhaps they can only last a week, so it is only natural that they whine about being broke. When the people have whined for quite some time, the Government should provide emergency unemployment assistance to help them, but so far it has still turned a deaf ear and only rolled out a loan scheme. This scheme is not bad as it can give us another option. However, towards the end of television commercials, there is often the warning that "borrow only if you can repay." Those who need to apply for this loan scheme are worried about when they will have a job again, because they can afford to make repayments only if they have a job. To be frank, if there is still uncertainty about the epidemic situation and their employment, they may not dare to apply for loans because their personal credit records will be affected if they fail to repay the loans.

As to how the Budget may narrow the wealth gap, FTU's position has been very clear, i.e. we support a progressive tax regime, under which higher income earners have to pay more tax. In my view, the Government has to study how the existing tax regime can be further adjusted as the grass roots will still lead hard lives in the days to come. Given that some people have made more income, for example, supermarkets have seen sales growth, and large consortia have made more profits, why does the Government not consider this suggestion?

This Budget also contains "handout" measures, including reducing salaries tax subject to a ceiling of $10,000, providing rates concession, and providing an extra allowance equal to half a month of payment. Despite not being offered rental waiver, public rental housing tenants still have some "sweeteners" such as $1,000 electricity subsidy. However, as I have just mentioned, the Budget has not introduced unemployment assistance but only proposed to review the rating system. If the rates percentage charge is to be adjusted, it seems to indicate that the Government wants to do something about the rich-poor divide. Nevertheless, all I can say is that the current rate is indeed too low, perhaps only several hundred dollars or $1,000 per month and just over $10,000 per year. Even if the rate in respect of the new rateable value zones is double or triple the current rate, the amount to be paid by those who own a number of properties will only be limited. This may not be an effective means to narrow the wealth gap. Therefore, we suggest that the Government should come up with more targeted measures to deal with the issue.

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Moreover, the Budget further allocates $6.6 billion to create 31 000 temporary jobs. I hope that the temporary jobs created previously have all been filled. Since the authorities indicated last month that only 20 000 people had been recruited, if another 30 000 jobs are to be created, these jobs should be filled as soon as possible without much delay as it is very miserable to be out of work.

We may compare the measures implemented in Hong Kong and Singapore. The latter has introduced a short-term measure to support unemployed families, involving S$7 billion or HK$35 billion. In contrast, the unemployment assistance we have been asking for would be subject to a cap of only $15 billion. Why is the Government unable to allocate more funding? At the end of the day, this Budget is not bad, but sorry, it cannot get 100 marks. I hope that the Government can work harder to do more and do better in narrowing the disparity between the rich and the poor, so that the whole community of Hong Kong can ride out the hard times and survive this epidemic; and in the future, there will be a fairer distribution of the wealth generated by the hard work of the community.

I so submit.

PRESIDENT (in Cantonese): This Council will continue the Second Reading debate on the Appropriation Bill 2021 at the meeting of 28 April 2021 during which public officers will respond to Members' views. If the motion for the Second Reading of the Bill is passed, this Council will proceed to conduct the remaining proceedings on the Bill at that meeting.

NEXT MEETING

PRESIDENT (in Cantonese): I now adjourn the Council until 11:00 am on Wednesday, 28 April 2021.

Adjourned accordingly at 5:31 pm.