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Minutes Have Been Seen by the Administration) Ref : FC/1/1(1) 立法會 Legislative Council LC Paper No. FC254/14-15 (These minutes have been seen by the Administration) Ref : FC/1/1(1) Finance Committee of the Legislative Council Minutes of the special meeting held at Conference Room 1 of the Legislative Council Complex on Monday, 16 March 2015, at 8:30 am Members present: Hon Tommy CHEUNG Yu-yan, SBS, JP (Chairman) Hon CHAN Kin-por, BBS, JP (Deputy Chairman) Hon Albert HO Chun-yan Hon LEE Cheuk-yan Hon James TO Kun-sun Hon LEUNG Yiu-chung Hon Emily LAU Wai-hing, JP Hon TAM Yiu-chung, GBS, JP Hon Abraham SHEK Lai-him, GBS, JP Hon Vincent FANG Kang, SBS, JP Hon WONG Kwok-hing, BBS, MH Prof Hon Joseph LEE Kok-long, SBS, JP, PhD, RN Hon Jeffrey LAM Kin-fung, GBS, JP Hon Andrew LEUNG Kwan-yuen, GBS, JP Hon WONG Ting-kwong, SBS, JP Hon Ronny TONG Ka-wah, SC Hon Starry LEE Wai-king, JP Dr Hon LAM Tai-fai, SBS, JP Dr Hon Priscilla LEUNG Mei-fun, SBS, JP Hon CHEUNG Kwok-che Hon WONG Kwok-kin, SBS Hon IP Kwok-him, GBS, JP Hon Mrs Regina IP LAU Suk-yee, GBS, JP Hon Paul TSE Wai-chun, JP - 2 - Hon Alan LEONG Kah-kit, SC Hon Albert CHAN Wai-yip Hon WONG Yuk-man Hon Claudia MO Hon James TIEN Pei-chun, GBS, JP Hon NG Leung-sing, SBS, JP Hon Steven HO Chun-yin Hon Frankie YICK Chi-ming Hon WU Chi-wai, MH Hon YIU Si-wing Hon Gary FAN Kwok-wai Hon MA Fung-kwok, SBS, JP Hon Charles Peter MOK, JP Hon CHAN Chi-chuen Hon CHAN Han-pan, JP Dr Hon Kenneth CHAN Ka-lok Hon CHAN Yuen-han, SBS, JP Hon LEUNG Che-cheung, BBS, MH, JP Hon Kenneth LEUNG Dr Hon KWOK Ka-ki Hon KWOK Wai-keung Hon Dennis KWOK Hon Christopher CHEUNG Wah-fung, SBS, JP Hon SIN Chung-kai, SBS, JP Hon IP Kin-yuen Dr Hon Elizabeth QUAT, JP Hon Martin LIAO Cheung-kong, SBS, JP Hon POON Siu-ping, BBS, MH Hon TANG Ka-piu, JP Dr Hon CHIANG Lai-wan, JP Ir Dr Hon LO Wai-kwok, BBS, MH, JP Hon CHUNG Kwok-pan Hon Christopher CHUNG Shu-kun, BBS, MH, JP Hon Tony TSE Wai-chuen, BBS Members absent: Hon CHAN Kam-lam, SBS, JP Dr Hon LAU Wong-fat, GBM, GBS, JP Hon Frederick FUNG Kin-kee, SBS, JP Hon Cyd HO Sau-lan, JP Hon CHAN Hak-kan, JP - 3 - Dr Hon LEUNG Ka-lau Hon LEUNG Kwok-hung Hon Michael TIEN Puk-sun, BBS, JP Hon Alice MAK Mei-kuen, JP Dr Hon Fernando CHEUNG Chiu-hung Dr Hon Helena WONG Pik-wan Public officers attending: Professor K C CHAN, GBS, JP Secretary for Financial Services and the Treasury Ms Elizabeth TSE Man-yee, JP Permanent Secretary for Financial Services and the Treasury (Treasury) Ms Esther LEUNG, JP Deputy Secretary for Financial Services and the Treasury (Treasury)1 Mr Alfred ZHI Jian-hong Principal Executive Officer (General), Financial Services and the Treasury Bureau (The Treasury Branch) Clerk in attendance: Ms Anita SIT Assistant Secretary General 1 Staff in attendance: Mr Jimmy Y T MA, JP Legal Adviser Ms Connie FUNG Senior Assistant Legal Adviser 1 Mr Derek LO Chief Council Secretary (1)5 Mr Daniel SIN Senior Council Secretary (1)7 Mr Raymond SZETO Council Secretary (1)5 Mr Frankie WOO Senior Legislative Assistant (1)3 Ms Michelle NIEN Legislative Assistant (1)5 Miss Yannes HO Legislative Assistant (1)6 ________________________________________________________________ Action - 4 - Item No. 1 – The arrangement for creating and increasing expenditure ceilings for commitment items by including relevant provisions in the Estimates of Expenditure 2015-2016 instead of submitting relevant funding proposals to the Finance Committee for approval 1. 1. The Chairman said that at the meeting on 23 January 2015, some members questioned the propriety of the Administration's withdrawing from the agenda of the Finance Committee ("FC") four outstanding items deferred from the 2013-2014 session and including them in the 2015-2016 Estimates of Expenditure for consideration and approval by the Legislative Council ("LegCo") in the context of the Appropriation Bill 2015. In response to members' queries, the Administration provided a written explanation on 4 February 2015 (entitled "Management of Finance Committee agenda items" issued vide LC Paper No. FC98/14-15(1)). In his letters to the Chairman dated 3 and 26 February 2015, Mr LEE Cheuk-yan raised further queries about the legal and procedural issues involved in the Administration's inclusion in the 2015-2016 Estimates of the above-mentioned four and another 21 commitment items. Mr Dennis KWOK raised similar issues in his letter dated 4 February 2015 requesting for holding a special meeting to follow up on those issues. The Administration provided a supplementary note on "Inclusion of new commitment items into the 2015-16 Estimates" (LC Paper No. FC121/14-15(01)) on 11 March 2015. The Chairman said that the present meeting was convened to enable members to discuss relevant issues without affecting the Committee's progress in deliberating funding proposals at its regular meetings. 2. At the invitation of the Chairman, Secretary for Financial Services and the Treasury ("SFST") gave a brief introduction. 3. At the invitation of the Chairman, Senior Assistant Legal Adviser 1 ("SALA1") introduced the paper LC Paper No. LS50/14-15, which provided information on the legal and constitutional framework relating to the control and management of the public finances of Hong Kong and set out the Legal Service Division's ("LSD") views on the relevant issues arising from the Administration's proposal to include items of expenditure in the Appropriation Bill 2015 instead of seeking FC's approval of those items. 4. SALA1 said that by virtue of sections 5 and 6 of the Public Finance Ordinance (Cap. 2) ("PFO"), it would seem open to the Financial Secretary ("FS") to include an item of expenditure under a relevant head or subhead to be included in an Appropriation Bill, if at the time of preparation of the estimates of the Government's expenditure for a financial year, it was known to the - 5 - Action Government that the relevant expenditure had to be incurred in that financial year. 5. SALA1 also pointed out that the LegCo Rules of Procedure ("RoP") and the Finance Committee Procedure had set out the procedure by which LegCo, the committee of the whole Council and FC examined the Appropriation Bill and the Estimates. 6. At the invitation of the Chairman, the Clerk introduced LC Paper No. FC123/14-15(01), which outlined the role and practices of FC in examining the Government's Estimates of Expenditure and approving public expenditure. 7. The Chairman invited members to speak on the agenda item and directed that members' speaking time should not exceed five minutes each. Constitutional convention in authorizing public finances 8. Mr Dennis KWOK referred to a constitutional convention of the Parliament of the United Kingdom ("UK") as expounded in "Erskine May Parliamentary Practice" 1, which suggested that there should be a separate process for the UK Parliament to examine new funding proposals in addition to the annual enactment of an Appropriation Ordinance. He said that as it had been customary for LegCo, and the Committee on Rules of Procedure in particular, to draw reference from the UK Parliament for procedural guidance, the UK Parliament's practice should be relevant. Mr KWOK queried why LSD had not highlighted this convention in its paper. 9. Legal Adviser ("LA") said that LegCo's practices and procedure in handling legislative and other matters had evolved over time. Unlike contravening a statutory provision, deviation from an established practice would not give rise to legal consequences. LA further explained that the system on the management of public finances in Hong Kong was governed under PFO and was different from that of the UK. 10. In response to Mr Dennis KWOK's further query on whether the constitutional convention on public financial authorization as described in "Erskine May Parliamentary Practice" was not applicable to LegCo, LA said that in the UK, any charge on the public revenue should be authorized by a 1 The passage that Mr Dennis KWOK quoted, which was also quoted in his letter of 4 February 2015, reads, "It is a general principle of constitutional propriety that new functions which are to be exercised on a continuing basis and which are to be financed out of 'money to be provided by Parliament' through the annual Appropriation Acts should be authorized by specific Act, supported by a financial resolution, and not by the Appropriation Act alone." - 6 - Action financial resolution of the House of Commons, whereas in Hong Kong, there was no comparable procedure and expenditure was charged on the General Revenue Account in the manner prescribed under sections 3 and 4 of PFO. 11. Mr WONG Kwok-kin asked whether the constitutional convention and the practice established by the Committee could be changed and if there was deviation, what the implications would be. Mr WONG commented that as some members had abused the procedure by way of filibustering, resulting in heavy backlog of items awaiting funding approval, it was reasonable for the Administration to adopt extraordinary measures to expedite the funding approval process. Mr TANG Ka-piu, Dr Priscilla LEUNG, Mr IP Kwok-him and Mr WONG Kwok-hing expressed similar views. 12. LA said that there was no explicit procedure for changing a practice established between the legislature and the executive authorities other than through consensus reached between them over time in the light of the prevailing circumstances and practical necessity.
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