OFFICIAL RECORD of PROCEEDINGS Wednesday, 15 February 2017 the Council Met at Eleven O'clock

Home , Aberdeen Country Park, Aberdeen Sports Ground, Hong Kong Rugby Union, Tanya Chan

LEGISLATIVE COUNCIL ― 15 February 2017 3615

OFFICIAL RECORD OF PROCEEDINGS

Wednesday, 15 February 2017

The Council met at Eleven o'clock

MEMBERS PRESENT:

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

THE HONOURABLE JAMES TO KUN-SUN

THE HONOURABLE LEUNG YIU-CHUNG

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

PROF THE HONOURABLE JOSEPH LEE KOK-LONG, S.B.S., J.P.

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

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

3616 LEGISLATIVE COUNCIL ― 15 February 2017

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

THE HONOURABLE LEUNG KWOK-HUNG#

THE HONOURABLE CLAUDIA MO

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

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

THE HONOURABLE WU CHI-WAI, M.H.

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

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

THE HONOURABLE CHARLES PETER MOK, J.P.

THE HONOURABLE CHAN CHI-CHUEN

THE HONOURABLE CHAN HAN-PAN, J.P.

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

THE HONOURABLE KENNETH LEUNG

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

DR THE HONOURABLE KWOK KA-KI

THE HONOURABLE DENNIS KWOK WING-HANG

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

DR THE HONOURABLE HELENA WONG PIK-WAN

# According to the Judgment of the Court of First Instance of the High Court on 14 July 2017, LEUNG Kwok-hung, Nathan LAW Kwun-chung, YIU Chung-yim and LAU Siu-lai have been disqualified from assuming the office of a member of the Legislative Council, and have vacated the same since 12 October 2016, and are not entitled to act as a member of the Legislative Council. LEGISLATIVE COUNCIL ― 15 February 2017 3617

THE HONOURABLE IP KIN-YUEN

DR THE HONOURABLE ELIZABETH QUAT, J.P.

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

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

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

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

THE HONOURABLE CHUNG KWOK-PAN

THE HONOURABLE ALVIN YEUNG

THE HONOURABLE ANDREW WAN SIU-KIN

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

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

THE HONOURABLE HO KAI-MING

THE HONOURABLE LAM CHEUK-TING

THE HONOURABLE HOLDEN CHOW HO-DING

THE HONOURABLE SHIU KA-FAI

THE HONOURABLE SHIU KA-CHUN

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

THE HONOURABLE YUNG HOI-YAN

DR THE HONOURABLE PIERRE CHAN

3618 LEGISLATIVE COUNCIL ― 15 February 2017

THE HONOURABLE CHAN CHUN-YING

THE HONOURABLE TANYA CHAN

THE HONOURABLE CHEUNG KWOK-KWAN, J.P.

THE HONOURABLE HUI CHI-FUNG

THE HONOURABLE LUK CHUNG-HUNG

THE HONOURABLE LAU KWOK-FAN, M.H.

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

DR THE HONOURABLE CHENG CHUNG-TAI

THE HONOURABLE JEREMY TAM MAN-HO

DR THE HONOURABLE YIU CHUNG-YIM#

DR THE HONOURABLE LAU SIU-LAI#

MEMBERS ABSENT:

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

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

THE HONOURABLE KWOK WAI-KEUNG

DR THE HONOURABLE FERNANDO CHEUNG CHIU-HUNG

THE HONOURABLE CHU HOI-DICK

THE HONOURABLE KWONG CHUN-YU

THE HONOURABLE NATHAN LAW KWUN-CHUNG#

PUBLIC OFFICERS ATTENDING:

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

PROF THE HONOURABLE ANTHONY CHEUNG BING-LEUNG, G.B.S., J.P. SECRETARY FOR TRANSPORT AND HOUSING

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

THE HONOURABLE GREGORY SO KAM-LEUNG, G.B.S., J.P. SECRETARY FOR COMMERCE AND ECONOMIC DEVELOPMENT

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

THE HONOURABLE NICHOLAS W. YANG, J.P. SECRETARY FOR INNOVATION AND TECHNOLOGY

THE HONOURABLE ERIC MA SIU-CHEUNG, J.P. SECRETARY FOR DEVELOPMENT

MR GODFREY LEUNG KING-KWOK, J.P. UNDER SECRETARY FOR COMMERCE AND ECONOMIC DEVELOPMENT

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

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

CLERKS IN ATTENDANCE:

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

MISS ODELIA LEUNG HING-YEE, DEPUTY SECRETARY GENERAL

MS ANITA SIT, ASSISTANT SECRETARY GENERAL

MISS FLORA TAI YIN-PING, ASSISTANT SECRETARY GENERAL

MS DORA WAI, ASSISTANT SECRETARY GENERAL

MR MATTHEW LOO, ASSISTANT SECRETARY GENERAL

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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)

TABLING OF PAPERS

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

Subsidiary Legislation/Instruments L.N. No.

Road Traffic (Public Service Vehicles) (Amendment) Regulation 2017 ...... 20/2017

Employees Retraining Ordinance (Amendment of Schedule 2) Notice 2017 ...... 21/2017

Other Papers

No. 65 ― Education Scholarships Fund Trustee's Report on the Administration of the Fund and Financial Statements for the year ended 31 August 2016

No. 66 ― Report of the Public Accounts Committee on the Reports of the Director of Audit on the Accounts of the Government of the Hong Kong Special Administrative Region for the year ended 31 March 2016 and the Results of Value for Money Audits (Report No. 67) (February 2017 ― P.A.C. Report No. 67)

Report No. 11/16-17 of the House Committee on Consideration of Subsidiary Legislation and Other Instruments

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ADDRESS

PRESIDENT (in Cantonese): Address. Mr Abraham SHEK will address the Council on the "Public Accounts Committee Report No. 67".

Public Accounts Committee Report No. 67

MR ABRAHAM SHEK: President, on behalf of the Public Accounts Committee ("the Committee"), I have the honour to table our Report No. 67 today.

Out of the 10 chapters covered by the Director of Audit's Report No. 67, the Committee has decided to hold hearings on two chapters that contain more serious allegations of irregularities or shortcomings. These chapters are "Funding of universities by University Grants Committee ('UGC')", and the "Maintenance and safety-related improvements of public rental housing flats".

The Committee has also studied the other seven chapters by asking the relevant bureaux and departments to provide written replies to Members' questions on how they addressed the inadequacies raised in the Director of Audit's Report No. 67. We would like to take this opportunity to express our appreciation to these bureaux and departments in providing detailed replies to our questions. The Committee was satisfied with these replies, and decided that no public hearing on these chapters was necessary.

Regarding the issues relating to the Research Grants Council ("the Council") raised in Chapter 6 of the Director of Audit's Report, the Committee has conducted a visit to the Council and received a detailed briefing on the Council's mechanisms to assess research proposals and to avoid conflict of interests of its members. On behalf of the Committee, I would like to extend my heartfelt thanks to the Council and its Secretariat for arranging such a useful briefing to enhance members' understanding.

The Committee's Report tabled today covers our conclusions and recommendations on the chapter "Funding of universities by University Grants Committee" only. For the chapter on the "Maintenance and safety-related improvements of public rental housing flats", as voluminous information has been provided by the witnesses on the issue relating to excess lead in drinking water in some public rental housing estates, the Committee has decided to defer the tabling of the report on this chapter to allow ourselves more time to consider the issues.

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I will now report the conclusions and recommendations on the chapter "Funding of universities by University Grants Committee". In the 2016-2017 financial year, the Administration's recurrent expenditure on education amounted to HK$74.7 billion, the largest spending area of the Administration. Out of this sum, around HK$18 billion was earmarked for grants and reimbursements provided to the eight universities funded by UGC.

Given the substantial amount of resources involved in tertiary education, UGC and the UGC Secretariat should exercise good governance and be transparent and accountable in using public resources. The Committee expresses grave concern and dissatisfaction, and finds it unacceptable about UGC's management of conflicts of interests. An example is that 26 Register of Interests forms of members of UGC and the Quality Assurance Council of UGC were found missing. The Committee urges UGC to rectify the irregularities and the inadequacies expeditiously.

The Committee also expresses grave concern and dissatisfaction about the lack of useful statistics to evaluate the cost-effectiveness of the internationalization of universities. UGC and the Education Bureau have not compiled statistics on whether non-local graduates of UGC-funded undergraduate and post-graduate programmes would study or work in Hong Kong. The Committee agrees on the importance of internationalization of universities and demands UGC and the Education Bureau to compile the relevant statistics in order to evaluate the cost-effectiveness of the existing policy. Furthermore, UGC and the Education Bureau should also regularly review whether the present mix of non-local students and public grants to the universities have achieved the intended objectives of internationalization. UGC and the Education Bureau should continue to monitor the UGC-funded universities' programmes performance on internationalization.

Lastly, President, I wish to record my appreciation of the contributions made by members of the Committee. Our gratitude also goes to the witnesses who attended the hearings held by the Committee. I would like to express our gratitude to the Director of Audit and his colleagues for their support. Last but not least, I would like to thank wholeheartedly the Legislative Council Secretariat for their unfailing support.

Thank you, President.

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WRITTEN ANSWERS TO QUESTIONS

Breastfeeding-friendly environment and privacy of passengers on public transport

1. DR PRISCILLA LEUNG (in Chinese): President, it has been reported that recently a taxi driver uploaded onto the Internet a secretly taken photograph of a female passenger breastfeeding a baby inside the taxi compartment. The driver was subsequently arrested by the Police under the charge of access to computer with criminal or dishonest intent. The aforesaid incident has aroused public concern that some people have poor understanding and level of acceptance of breastfeeding and that the privacy of passengers on public transport lacks protection. In this connection, will the Government inform this Council:

(1) whether the Government will provide more babycare rooms and relevant ancillary facilities in recreational and cultural venues under its management, to facilitate women to breastfeed their babies; if it will, of the details; if not, the reasons for that;

(2) of the Government's publicity and promotion plans in the coming five years to enhance the public understanding of and support for breastfeeding, so as to create a breastfeeding-friendly society; and

(3) given that the Guidance on CCTV Surveillance and Use of Drones ("the Guidance") published by the Office of the Privacy Commissioner for Personal Data provides that people should be explicitly informed that they are subject to surveillance by closed-circuit television ("CCTV") (including devices that are capable of capturing images of individuals), and that the ways of informing people include putting up conspicuous notices, whether the authorities have grasped the present situation about (i) the installation of CCTVs in vehicle compartments and (ii) the display of notices in accordance with the Guidance, by operators of various modes of public transport?

SECRETARY FOR FOOD AND HEALTH (in Chinese): President, the Government has all along endeavoured to promote, protect and support breastfeeding. The Food and Health Bureau set up the Committee on Promotion LEGISLATIVE COUNCIL ― 15 February 2017 3625 of Breastfeeding ("the Committee") in early April 2014 under the chairmanship of the Under Secretary for Food and Health. Members include representatives from relevant professional health care bodies, academia as well as representatives of the organizations that have participated in the promotion of breastfeeding. The Committee provides specific recommendations on strategies and action plans to strengthen the promotion, protection and support for breastfeeding. Its objectives are to enhance the sustainability of breastfeeding and promote breastfeeding as the norm for babycare widely accepted by the general public. My reply to the various parts of the question, in consultation with the Transport and Housing Bureau, the Department of Health ("DH") and the Leisure and Cultural Services Department ("LCSD"), is as follows:

(1) Government departments have been encouraged to provide babycare facilities in the public places under their management. In line with the policy, LCSD endeavours to provide more babycare rooms at its existing and new venues for the convenience of the public. At present, there are 81 babycare rooms in the LCSD venues. If there is no babycare room, venue staff will provide an appropriate place or space to meet the public's needs as far as practicable. LCSD has also included babycare room as a standard provision. Wherever feasible, consideration will be given to providing babycare rooms in planning for major new leisure facilities or venue renovation works.

(2) In 2014, the Committee formulated a three-year work plan to enhance publicity and education on breastfeeding, further encourage the adoption of a "Breastfeeding Friendly Workplace" policy and promote "Breastfeeding Friendly Premises". The work plan has been jointly implemented by the Government and a number of organizations. With their concerted efforts over the past two years, some of the measures have achieved significant results. The key areas of work include:

(I) Breastfeeding Friendly Premises

DH has been promoting "Breastfeeding Friendly Premises" in public places of the community, where breastfeeding mothers and their families feel welcome and are supported to breastfeed anytime, anywhere.

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Among others, DH and the Hong Kong Committee for the United Nations Children's Fund collaborated with the Hong Kong Catering Industry Association to introduce and promote "Breastfeeding Friendly Premises" measures to the catering industry in 2015. As at October 2016, more than 80 restaurants had implemented "Breastfeeding Friendly Premises" measures.

Moreover, the Food and Health Bureau issued letters to more than 470 private organizations and enterprises in June 2016 to encourage them to implement "Breastfeeding Friendly Premises" policy in public places owned or managed by them.

(II) Breastfeeding Friendly Workplace

To provide appropriate support for lactating mothers when they return to work and promote an inclusive culture for breastfeeding in the workplace, the Food and Health Bureau has been issuing advice on public health to individual government bureaux and departments since 2013, encouraging them to implement the "Breastfeeding Friendly Workplace" policy by putting in place the measures below so as to facilitate lactating staff to continue breastfeeding after returning to work:

(i) allowing lactation breaks (two breaks of about 30 minutes each during an eight-hour shift) to lactating staff for expression of breastmilk for at least one year after childbirth. Supervisors should discuss with the lactating staff who continue with breastfeeding beyond the first year to make flexible arrangements for lactation breaks;

(ii) providing a private space with a comfortable chair with table and an electric outlet for operating the breast pump; and

(iii) providing refrigerating facilities for safe storage of expressed breastmilk.

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At present, over 75 bureaux and departments have implemented the policy.

As the largest employer in Hong Kong, the Government hopes to set an example in promoting the "Breastfeeding Friendly Workplace" policy and encourage private enterprises to implement the same policy.

(III) Publicity and education on breastfeeding

DH has been actively promoting and supporting breastfeeding through different channels. These include:

(i) providing training for maternal and child health personnel and producing a training VCD on breastfeeding for their reference;

(ii) providing health information on breastfeeding for parents through workshops, production and distribution of educational materials such as booklets and videos, and web page of the Family Health Service of DH;

(iii) providing guidance and skill support for breastfeeding mothers through the Maternal and Child Health Centres ("MCHCs") and the breastfeeding hotline; and

(iv) organizing publicity activities (e.g. showing of promotional videos on TV and buses and in MTR, advertising on bus bodies and attending media interviews) to enhance public awareness of the benefits of breastfeeding.

DH has also produced and uploaded relevant guidelines such as "Guide to Establishing Breastfeeding Friendly Premises", "Employers' Guide to Establishing Breastfeeding Friendly Workplace" and "An Employee's Guide to Combining Breastfeeding with Work" onto its Family Health Service web page for reference by the public as well as those organizations and public premises interested in implementing breastfeeding friendly measures.

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Furthermore, DH launched the "Info for Nursing Mum" App in February 2016 to provide relevant online information, including breastfeeding policy, breastfeeding news, FAQs on breastfeeding and community resources.

(IV) Baby Friendly Hospital Initiative

To echo the Baby Friendly Hospital ("BFH") Initiative, a worldwide programme launched by the World Health Organization and the United Nations Children's Fund, the Hospital Authority has been implementing the initiative in its eight public hospitals with maternity wards and encouraging them to become BFH in phases. The Queen Elizabeth Hospital was accredited internationally as Hong Kong's first BFH in May 2016. The objective of the BFH Initiative is to remove elements obstructing breastfeeding in medical institutions, including hospitals, clinics and mother and baby centres, and to support more mothers to sustain breastfeeding through the provision of services and guidance.

In June 2016, DH launched a pilot scheme of Baby-Friendly MCHC Accreditation in three MCHCs, namely, Sai Ying Pun MCHC, Kowloon City MCHC and Yaumatei MCHC. The target is to complete the accreditation of the pilot scheme within three years.

In the future, the Government will continue to work with the relevant parties and sectors in the community to implement the measures of the work plan.

(3) At present, the MTR Corporation Limited, franchised bus operators, some ferry operators, some non-franchised buses, some public light buses and some taxi owners/drivers, having regard to their operational needs, have installed closed circuit television ("CCTV") systems with recording function in some of their vehicle or vessel compartments so that their staff can monitor the situation of the vehicle and vessel compartments through the systems with a view to providing timely assistance to passengers and handling emergencies, or enhancing services. Notices are generally put up in the vehicle or vessel compartments to inform passengers that CCTV systems LEGISLATIVE COUNCIL ― 15 February 2017 3629

have been installed. Trams are also installed with CCTV systems without recording function at the rear of all compartments to monitor passengers' access and provide assistance. In any case, public transport operators must comply with the requirements of the Personal Data (Privacy) Ordinance (Cap. 486) and make reference to the "Guidance on CCTV Surveillance and Use of Drones" published by the Office of the Privacy Commissioner for Personal Data if they have installed CCTV systems in their vehicle or vessel compartments.

Protection of the labour rights and interests of the ethnic minorities

2. MR KWOK WAI-KEUNG (in Chinese): President, recently, some members of the ethnic minorities ("EMs") have relayed to me that some employers, taking advantage of their weakness of being unfamiliar with labour rights and interests, have hired them on employment terms which are inferior to the statutory requirements. In this connection, will the Government inform this Council:

(1) in the past five years, (i) of the respective numbers of enquiries and complaints received by the authorities from EMs about their employers' alleged failure to offer them the labour rights and interests as prescribed by the law, (ii) how the authorities had dealt with such cases, and (iii) the number of cases in which employers who had allegedly breached the law were prosecuted;

(2) of the measures taken by the authorities in the past five years to safeguard EMs of their labour rights and interests; and

(3) whether the authorities will consider stepping up the following measures so as to protect the labour rights and interests of EMs: (i) inspecting those work places with relatively more EMs employees in order to check if the terms of employment of such employees comply with the statutory requirements, (ii) promoting the knowledge of labour rights and interests as well as of occupational safety among EMs, and (iii) providing more convenient channels for EMs to report law-breaking employers, as well as widely publicizing such channels among EMs?

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SECRETARY FOR LABOUR AND WELFARE (in Chinese): President, my reply to the question raised by Mr KWOK Wai-keung is as follows:

(1) Members of the public, irrespective of their ethnicity, have access to the free enquiry services provided by the Labour Department ("LD") in respect of legislation on employees' rights and benefits as well as occupational safety and health ("OSH") and may lodge complaints against suspected offences. LD will promptly follow up and conduct investigation upon receipt of a complaint. If there is sufficient evidence, LD will initiate prosecution against those law-defying employers. LD does not keep a breakdown of enquiries/complaints/prosecution cases by the ethnicity of the enquirers/complainants.

(2) LD has all along been adopting multi-pronged measures to protect the statutory rights and benefits of employees under labour laws. Through proactive workplace inspections, LD endeavours to safeguard employees' entitlements and minimize hazards at workplaces. Investigation of suspected offences will be conducted and employers who violate the law will be prosecuted. LD also provides consultation service in relation to the Employment Ordinance, the Minimum Wage Ordinance and employment contracts, and renders voluntary conciliation service to assist employers and employees in establishments outside the government sector to resolve their employment claims and disputes. Criminal investigation will be conducted for breaches of labour legislation detected in the course of conciliation.

To ensure that statutory rights and benefits of ethnic minorities ("EMs") will not be jeopardized by language barriers, LD will arrange translation and interpretation services for EMs who speak neither Chinese nor English when rendering consultation and conciliation services, or during complaint investigations and law enforcement actions.

(3) Labour Inspectors ("LIs") of LD initiate surprise inspections to workplaces in various sectors to monitor employers' compliance with labour laws, in order to safeguard the rights and benefits of LEGISLATIVE COUNCIL ― 15 February 2017 3631 employees including EMs. Subject to operational exigencies, LIs interview EM workers during inspections to enquire about their employment terms and conditions, and explain to them the protection and rights which they are entitled to under the labour laws.

LD also produces a large number of publications in major EM languages to publicize major provisions of labour legislation, employees' statutory rights and protection and the channels for reporting on law-defiant employers. In addition to dissemination through various channels, the e-versions of these publications have been uploaded to the Multi-Language Platform of the Gov.HK website and LD's homepage to facilitate EMs to browse the information. Other promotional efforts include publicizing on radio programmes for EMs, and advertising on public transport and in newspapers for EMs, etc.

In respect of publicity and promotion on OSH, LD produces simple and reader-friendly promotional leaflets and materials for EMs, organizes regional roving exhibitions and site visits/talks in collaboration with workers' unions/organizations/trade associations, and promulgates work safety messages in local weekly EM newspapers to enhance their safety awareness. A list of leaflets/pamphlets on labour legislation and related services published by LD in EM languages is at Annex.

Moreover, LD widely publicizes its 24-hour Enquiry Hotline: 2717 1771 through its homepage, the Gov.HK website, various leaflets on labour laws and during promotional activities. The hotline, operated by 1823, answers enquiries on labour legislation and makes referral on complaints received. When EMs call the hotline, the Centre for Harmony and Enhancement of Ethnic Minority Residents ("CHEER Centre"), funded by the Home Affairs Department, provides prompt telephone interpretation service and conducts three-way conference call to help the callers obtain the necessary information.

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Annex

Leaflets/Pamphlets on Labour Legislation and OSH Legislation with Related Services in EM Languages

Titles of leaflets/pamphlets in EM languages 1. Employment Ordinance at a Glance 2. A Concise Guide to Paternity Leave under the Employment Ordinance 3. A Concise Guide to the Employment (Amendment) Ordinance 2010 4. Part-time Employment―Know More about Labour Legislation 5. Statutory Minimum Wage : Latest Revision 6. Concise Guide to Statutory Minimum Wage 7. Concise Guide to Productivity Assessment for Employees with Disabilities under the Statutory Minimum Wage Regime 8. A Concise Guide to the Employment of Children Regulations 9. A Guide to the Employment of Child Entertainers 10. A Concise Guide to the Employment of Young Persons (Industry) Regulations 11. A Guide on Civil and Criminal Proceedings Related to the Employment Ordinance 12. Fact Sheet on Employment Claims Investigation Division, Labour Department 13. Important Information for Employers and Employees on Compensation for Work Injuries and Occupational Diseases 14. How to Apply for Employees' Compensation for Death 15. Notes for Construction Workers 16. Industrial Safety (General Duties of Persons Employed) 17. Safety at Work―A Guide to Personal Protective Equipment 18. Falling a Few Feet Can Be Fatal Use Suitable Working Platform 19. Common Unsafe Conditions when working at Height on Construction Sites (1) 20. Common Unsafe Conditions when working at Height on Construction Sites (2) 21. A Casebook of Fatal Accidents Related to work-at-Height 22. Fatal Accidents Related to Work-at-height―Case 1 23. Fatal Accidents Related to Work-at-height―Case 3 24. Fatal Accidents Related to Work-at-height―Case 7 25. Common Unsafe Electrical Facilities on Construction Sites―Exposed Live Conductors LEGISLATIVE COUNCIL ― 15 February 2017 3633

Titles of leaflets/pamphlets in EM languages 26. Common Unsafe Electrical Facilities on Construction Sites―Exposed Live Conductors on Switchboards 27. They Hold a Family's Fortunes 28. It Can Save a Life 29. Never mix cleansing agents haphazardly 30. 3 steps to electrical work safety 31. Protect your Hearing (High Noise Jobs can Cause Permanent Damage) 32. Make Every Step Safe When Working At Heights 33. Guard Your Eyes―Use Proper Eye Protection at Work 34. Guidance Notes for the Safe Isolation of Electricity Source at Work 35. Dangerous Parts of Machinery or Plant 36. Operational Guide for Air Receivers 37. Prevention Against Fall From Height 38. To Play Safe, Lift Heavy Objects Properly 39. Occupational Health Clinic (Poster) 40. Prevent Heat Stroke When Working in a Hot Weather (Construction Worker) (Poster) 41. Prevention of Heat Stroke at Work in a Hot Environment 42. Work-related Neck and Back Pain 43. Decompression Illness

Accommodation allowance for non-refoulement claimants

3. MR LEUNG CHE-CHEUNG (in Chinese): President, since 2006, the Government has offered various kinds of humanitarian assistance for people who lodge torture claims/non-refoulement claims under the Convention against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment immediately upon entry into Hong Kong unlawfully ("claimants") so that they will not become destitute while awaiting screening. Such assistance includes accommodation allowance (including rents, rental deposits and property agent fees). It is learnt that quite a number of claimants moved out of their rented units after living there only for several months, resulting in the rental deposits being forfeited by the landlords on the ground that the claimants had breached the tenancy agreements. Some members of the public suspect that in some cases, the claimants might have colluded with the landlords to deceive public money. In this connection, will the Government inform this Council:

3634 LEGISLATIVE COUNCIL ― 15 February 2017

(1) whether the authorities have formulated guidelines for granting accommodation allowance to claimants; if so, of the details;

(2) in each of the past three years, of (i) the number of cases in which accommodation allowance was granted to claimants and the respective total amounts of rents and rental deposits involved, and (ii) the number of cases in which the claimants reported that the rental deposits had been forfeited by the landlords on the ground of the claimants having breached the tenancy agreements, and the total amount of money involved;

(3) of the countermeasures taken by the authorities to prevent collusion between claimants and landlords in deceiving rental deposits; and

(4) whether the authorities will consider setting up detention centres with designated time rules for entering and leaving the centres to accommodate claimants while they are awaiting screening, so as to solve their accommodation problem; if so, of the details?

SECRETARY FOR SECURITY (in Chinese): President, since 2006, the Government has commissioned a non-governmental organization ("NGO") to offer humanitarian assistance to non-refoulement claimants ("claimants") to prevent them from becoming destitute during their presence in Hong Kong, whilst avoiding any magnet effect which may have serious implications on the sustainability of the assistance programme and on our immigration control.

All along, the NGO to operate the said humanitarian assistance programme has been selected by the Social Welfare Department ("SWD") through open and fair tendering exercises. At present, the assistance programme is operated by the International Social Service Hong Kong Branch ("ISS-HK"). Items covered by the assistance include:

Assistance received by each service Assistance Item user per month Food $1,200 Accommodation (Rent Allowance) $1,500 (adult); $750 (child) Utilities $300 LEGISLATIVE COUNCIL ― 15 February 2017 3635

Assistance received by each service Assistance Item user per month Transportation Allowance $200 to $420 (depending on the service user's location of residence and the number of routine journeys) Other Basic Necessities Provided to service users in kind

From 2012 to 2013, concerns were raised by some Legislative Council Members, concerned NGOs, etc. that given the unique background of claimants (e.g. language barriers, difficulties in securing long-term tenancy agreements with landlords), they faced hurdles in finding suitable homes. After considering all relevant issues, the Government agreed to provide service users with rental deposits ($3,000 or an amount equivalent to two months of the rent, whichever is the less) and property agent fees ($750 or an amount equivalent to the rent for half a month, whichever is the less), starting from 1 February 2014. Such arrangement has been maintained till now.

Besides, ISS-HK provides counselling services to service users based on individual needs.

Our response to various parts of the question raised by Mr LEUNG Che-cheung is as follows:

(1) On accommodation assistance, service users can generally identify suitable accommodation on their own. ISS-HK also provides service users with genuine needs with temporary accommodation equipped with electricity and water supplies and other basic utilities. At present, over 90% of all service users choose to identity accommodation by themselves. Rents are paid to landlords by ISS-HK direct.

Before making rent payments, ISS-HK will assess whether the concerned premises are of conditions suitable for accommodation assistance. Where necessary, ISS-HK will require landlords to provide supporting documents on the conditions of the premises. ISS-HK will also conduct spot checks and home visits to assess the hygiene, home environment and safety conditions of the premises. As and when premises are assessed to be below standard, or if there are signs of irregularities, ISS-HK will inform service users 3636 LEGISLATIVE COUNCIL ― 15 February 2017

concerned and advise them to move, and stop the relevant rental payments. If service users encounter difficulties in securing alternative accommodation, they may approach ISS-HK for assistance.

Generally speaking, each service user is eligible for rental deposit for one time only. If the rental deposit is returned upon completion of a tenancy agreement, it can be used by the service user under a new tenancy agreement. However, if the rental deposit is forfeited because of failure to complete a tenancy agreement or violation of relevant terms, the service user will not be provided with further rental deposit under the new tenancy agreement. He or she may make use of any remaining rental deposit which has not yet been forfeited under the new tenancy agreement. Different situations may lead to failure to complete a tenancy agreement, including departure from Hong Kong, or a need to move due to domestic violence, safety reasons or worsening health conditions, etc.

(2) From 2013-2014 to 2015-2016, the number of service users receiving humanitarian assistance is 5 953, 8 594 and 12 671 respectively; the expenditure is $204 million, $254 million and $485 million respectively. SWD does not maintain the number of service users receiving rent allowance and the corresponding expenditure. As at end of December 2016, 98.9% of all service users were receiving accommodation assistance under the assistance programme.

On rental deposit, the total amount of rental deposit rendered between 1 February 2014 (when the arrangement to provide rental deposit assistance began) and end of December 2016 is $23 million. The total amount of rental deposit forfeited or paid out as compensation for various reasons is $5 million. Since rental deposits can be carried forward for use under new tenancy agreements in part or in full according to individual case circumstances and the actual accommodation assistance provided varies amongst individual service users, SWD does not maintain further breakdowns of the causes of forfeiture or compensation and the accommodation assistance.

LEGISLATIVE COUNCIL ― 15 February 2017 3637

(3) ISS-HK and SWD make rental deposit arrangements for each individual case to ensure prudent use of public money and providing service users in need with suitable accommodation.

Currently, tenancy agreements are entered into between service users and landlords; whereas rental deposit agreements are entered into between ISS-HK, service users and landlords. If landlords request to forfeit rental deposits according to tenancy agreements, they must provide justifications and relevant proofs for the consideration and approval by ISS-HK. If there are suspicious situations between service users and landlords regarding rental deposits, ISS-HK will investigate, and seek legal advice and the advice of the Police where necessary. ISS-HK will report any collusion and frauds to law enforcement agencies.

(4) The suggestion of setting up detention centres involves challenges from legal, land and manpower resources perspectives. Since the 1980s to the 1990s, the Court has made multiple rulings in relation to the detention of illegal immigrants. That being said, we will look into proposals to detain more illegal immigrants (including non-refoulement claimants) and strengthen support to the management of detention facilities, taking into account legal, resources and public security implications.

Air pollution and traffic congestion problems caused by vehicles

4. MR DENNIS KWOK (in Chinese): President, since its release of the Clean Air Plan for Hong Kong in 2013, the Environment Bureau has implemented one after another a number of measures which aim to improve roadside air quality. However, there are comments that the growth in the number of vehicles and the shortage of parking spaces in recent years have caused motorists to drive their vehicles in circles on roads in search of parking spaces or queuing up for entry into a car park, which exacerbates traffic congestion. As a result, the emissions from vehicles have increased and the roadside air pollutants in built-up areas (e.g. Central) are often difficult to disperse. In this connection, will the Government inform this Council:

3638 LEGISLATIVE COUNCIL ― 15 February 2017

(1) of the respective average daily vehicular flows of Aberdeen Tunnel, Lion Rock Tunnel, Shing Mun Tunnels, Tseung Kwan O Tunnel, Sha Tin Heights Tunnel, Eagle's Nest Tunnel, Tai Wai Tunnel, Kai Tak Tunnel, Cheung Tsing Tunnel and Nam Wan Tunnel last year, with a breakdown by vehicle category and the respective percentages of such figures in their total vehicular flows; the quantities of various types of air pollutants (including nitrogen oxides and respirable suspended particulates) emitted by various categories of vehicles in various tunnels during that period and the respective percentages of such quantities in the total emission of air pollutants; if such information is unavailable, of the reasons for that;

(2) of the respective average daily vehicular flows on the sections of Des Voeux Road Central, Connaught Road Central and Queen's Road Central in Central in the past three years, with a breakdown by vehicle category and the respective percentages of such figures in their total vehicular flows; the quantities of various types of air pollutants emitted by various categories of vehicles at such road sections during that period and the respective percentages of such quantities in the total emission of air pollutants; if such information is unavailable, of the reasons for that;

(3) of the respective numbers of public parking spaces currently available at the three road sections mentioned in (2) and in Central district; among them, the respective numbers of parking spaces in government car parks, in private car parks and on government lands rented out on short-term tenancies; and

(4) of the respective numbers of fixed penalty tickets issued by the Police in the past three years in respect of illegal parking at those three road sections and in Central district; if such information is unavailable, of the reasons for that?

SECRETARY FOR TRANSPORT AND HOUSING (in Chinese): President, the Government has launched a number of measures to improve roadside air quality, including launching an incentive-cum-regulatory scheme to phase out some 82 000 pre-Euro IV diesel commercial vehicles progressively, strengthening emission control for petrol and liquefied petroleum gas vehicles, and retrofitting LEGISLATIVE COUNCIL ― 15 February 2017 3639 emission reduction devices and setting up low emission zones for franchised buses. During the period, although road traffic congestion resulted in increased vehicle emission has offsetted some of the effects of the above measures, roadside air quality has still improved significantly. From 2012 to 2016, the concentrations of major pollutions recorded by the Environmental Protection Department ("EPD")'s roadside monitoring stations, viz. respirable suspended particulates and nitrogen dioxide, have decreased by 28% and 31% respectively.

My reply to the various parts of Mr Dennis KWOK's question is as follows:

(1) The average daily vehicular flows of Aberdeen Tunnel, Lion Rock Tunnel, Shing Mun Tunnels, Tseung Kwan O Tunnel, Eagle's Nest Tunnel, Sha Tin Heights Tunnel, Tai Wai Tunnel, Kai Tak Tunnel, Cheung Tsing Tunnel and Nam Wan Tunnel in 2015(1), with a breakdown by vehicle class and the respective percentages, are set out in Annex 1.

EPD's preliminary estimates on the amount of respirable suspended particulates and nitrogen oxides emitted by various classes of vehicles at the above mentioned tunnels in 2015(2), as well as the respective percentages, are set out in Annex 2.

(2) Based on the Transport Department ("TD")'s information, the respective average daily vehicular flow on the sections of Des Voeux Road Central, Connaught Road Central and Queen's Road Central within Central District in the past three years (i.e. from 2013 to 2015)(3), and the percentage of vehicular flow for various classes of vehicles on certain sections of the above roads derived from sampling, are set out in Annex 3. TD does not keep the actual

(1) As EPD has not yet completed the analysis of the detailed statistics required for estimating the vehicle emission for 2016 (e.g. vehicle population distribution by age, diurnal variation of ambient temperature and relative humidity, etc.), we have provided only the estimates of vehicle emission for 2015 for comparison purpose for this part of the reply.

(2) The emission level is deduced from the hourly traffic flow of each tunnel provided by TD, travel speed during rush hours, speed limit, vehicle class in the Annual Traffic Census, the overall vehicle age of the year and emission standard distribution, etc.

(3) As mentioned in footnote (1), EPD's figures for 2016 are still being collated. 3640 LEGISLATIVE COUNCIL ― 15 February 2017

figures of the total vehicular flows by vehicle class for the road sections concerned.

EPD's preliminary estimates(4) on the amount of respirable suspended particulates and nitrogen oxides emitted by various classes of vehicles on the above mentioned road sections from 2013 to 2015, as well as the respective percentages are set out in Annex 4.

(3) The numbers of public parking spaces along Connaught Road Central, Des Voeux Road Central and Queen's Road Central, as well as within Central District, are tabulated below:

Number of Public Parking Spaces Privately Location Government Operated Subtotal Car Park* Car Park# Connaught Road Central 1 597 226 1 823 Des Voeux Road Central - 97 97 Queen's Road Central - 1 605 1 605 Central district^ 2 757 5 850 8 607

Notes:

* For this reply, Government car parks include car parks managed by TD and Government Property Agency, as well as on-street parking spaces.

# There is no short-term tenancy car park in Central District.

^ Central District means the Chung Wan constituency of the Central and Western District Council, which covers the above three roads.

(4) The fixed penalty tickets issued in the past three years in respect of illegal parking at Connaught Road Central, Des Voeux Road Central and Queen's Road Central, and in the Central Police District are tabulated below:

(4) The emission level is deduced from the traffic flow data in the Annual Traffic Census, data of The Third Comprehensive Transport Study, vehicle speed during rush hours surveyed by journey time, the overall vehicle age of the year and emission standard distribution, etc. LEGISLATIVE COUNCIL ― 15 February 2017 3641

Location 2014 2015 2016@ Des Voeux Road Central 564 569 801 Connaught Road Central 1 251 1 723 2 017 Queen's Road Central 2 473 2 910 3 574 Central Police District 50 358 58 135 65 409

Notes:

@ Provisional figures.

 The Central Police District covers an area running from Arsenal Street to the east, up until the peak and the Aberdeen Country Park to the south. It is delineated by the Eastern Street to the west and extends along the waterfront. Its coverage is larger than the Chung Wan constituency of the District Council, and covers the three above mentioned roads.

Annex 1

Average Daily Vehicle Flow of Various Tunnels in 2015 Mentioned in the Question in 2015

Medium-size Small-size vehicles vehicles Heavy-size vehicles (Private cars, (single-deck buses, (double-deck buses Taxis, Motor minibuses and and goods vehicles Vehicle Cycles) goods vehicles of of over 5.5 tones) Total 5.5 tones or below) Vehicle Vehicle Vehicle Percentage Percentage Percentage Flow Flow Flow Aberdeen Tunnel 43 608 67.5% 10 708 16.5% 10 321 16.0% 64 637 Lion Rock Tunnel 67 209 73.1% 14 617 15.9% 10 133 11.0% 91 959 Shing Mun Tunnels 33 394 63.4% 11 541 21.9% 7 711 14.7% 52 646 Tseung Kwan O Tunnel 65 474 73.1% 14 909 16.7% 9 171 10.2% 89 554 Eagle's Nest Tunnel, 34 432 68.7% 7 937 15.8% 7 772 15.5% 50 141 Sha Tin Heights Tunnel Tai Wai Tunnel These four tunnels are not tolled-tunnels. The Government 39 570 Kai Tak Tunnel has not installed toll system to record the classes of vehicles 53 160 Cheung Tsing Tunnel passing through, and hence cannot provide the breakdown of 73 985 Nam Wan Tunnel the vehicle classes. 47 510

3642 LEGISLATIVE COUNCIL ― 15 February 2017

Annex 2

Respirable Suspended Particulates and Nitrogen Oxides emitted by Various Classes of Vehicles at the Tunnels mentioned in the Question in 2015 and the Respective Percentages (Preliminary Estimates)

Emission (Tonnes) and Percentage Tunnels Vehicle Classes Respirable Nitrogen Suspended Oxides Particulates Aberdeen Motor Cycle <1 1% <1 1% Tunnel Private Car 1 3% <1 4% Taxi 4 8% <1 0% Goods Vehicle of 5.5 tonnes or below 9 17% <1 21% Goods Vehicle over 5.5 tonnes 6 12% <1 16% Private Light Bus <1 1% <1 2% Public Light Bus 3 6% <1 11% Non-franchised Bus 5 11% <1 12% Franchised Bus 22 42% <1 33% Lion Motor Cycle <1 1% <1 1% Rock Private Car 2 4% <1 6% Tunnel Taxi 4 9% <1 0% Goods Vehicle of 5.5 tonnes or below 8 19% <1 26% Goods Vehicle over 5.5 tonnes 9 21% <1 26% Private Light Bus <1 1% <1 1% Public Light Bus 1 3% <1 4% Non-franchised Bus 5 11% <1 13% Franchised Bus 14 32% <1 24% Shing Motor Cycle <1 1% <1 1% Mun Private Car 1 2% <1 3% Tunnels Taxi 3 5% <1 0% Goods Vehicle of 5.5 tonnes or below 16 26% <1 29% Goods Vehicle over 5.5 tonnes 15 25% <1 30% Private Light Bus <1 0% <1 0% Public Light Bus 2 4% <1 6% Non-franchised Bus 3 5% <1 5% Franchised Bus 20 33% <1 25% LEGISLATIVE COUNCIL ― 15 February 2017 3643

Emission (Tonnes) and Percentage Tunnels Vehicle Classes Respirable Nitrogen Suspended Oxides Particulates Tseung Motor Cycle <1 1% <1 1% Kwan O Private Car 1 4% <1 5% Tunnel Taxi 2 10% <1 0% Goods Vehicle of 5.5 tonnes or below 5 20% <1 24% Goods Vehicle over 5.5 tonnes 8 32% <1 38% Private Light Bus <1 1% <1 1% Public Light Bus 1 6% <1 9% Non-franchised Bus 2 7% <1 7% Franchised Bus 5 19% <1 14% Eagle's Motor Cycle <1 0% <1 0% Nest Private Car 2 3% <1 4% Tunnel, Taxi 5 8% <1 0% Sha Tin Goods Vehicle of 5.5 tonnes or below 11 20% <1 22% Heights Goods Vehicle over 5.5 tonnes 30 52% <1 60% Tunnel Private Light Bus <1 0% <1 0% Public Light Bus <1 0% <1 0% Non-franchised Bus 3 6% <1 6% Franchised Bus 6 11% <1 8% Tai Wai Motor Cycle <1 1% <1 1% Tunnel Private Car <1 4% <1 4% Taxi <1 8% <1 0% Goods Vehicle of 5.5 tonnes or below 2 20% <1 22% Goods Vehicle over 5.5 tonnes 4 50% <1 59% Private Light Bus <1 0% <1 0% Public Light Bus <1 0% <1 0% Non-franchised Bus <1 6% <1 6% Franchised Bus <1 10% <1 7% 3644 LEGISLATIVE COUNCIL ― 15 February 2017

Emission (Tonnes) and Percentage Tunnels Vehicle Classes Respirable Nitrogen Suspended Oxides Particulates Kai Tak Motor Cycle <1 2% <1 2% Tunnel Private Car <1 3% <1 4% Taxi 3 16% <1 0% Goods Vehicle of 5.5 tonnes or below 5 22% <1 29% Goods Vehicle over 5.5 tonnes 6 26% <1 35% Private Light Bus <1 1% <1 1% Public Light Bus <1 0% <1 0% Non-franchised Bus 2 9% <1 11% Franchised Bus 4 20% <1 17% Cheung Motor Cycle <1 1% <1 1% Tsing Private Car 1 3% <1 3% Tunnel Taxi 3 6% <1 0% Goods Vehicle of 5.5 tonnes or below 10 19% <1 21% Goods Vehicle over 5.5 tonnes 19 35% <1 42% Private Light Bus <1 0% <1 0% Public Light Bus <1 0% <1 0% Non-franchised Bus 5 10% <1 11% Franchised Bus 15 27% <1 21% Nam Motor Cycle <1 1% <1 1% Wan Private Car <1 3% <1 4% Tunnel Taxi 2 11% <1 0% Goods Vehicle of 5.5 tonnes or below 3 14% <1 15% Goods Vehicle over 5.5 tonnes 10 49% <1 58% Private Light Bus <1 0% <1 0% Public Light Bus <1 0% <1 0% Non-franchised Bus 4 17% <1 18% Franchised Bus 1 6% <1 5%

LEGISLATIVE COUNCIL ― 15 February 2017 3645

Annex 3

Traffic Flow of Sections of Des Voeux Road Central, Connaught Road Central and Queen's Road Central within Central District

1. The average daily traffic flow of the following road sections from 2013 to 2015:

Average Daily Traffic Flow Road From To during the Whole Year Section* 2013 2014 2015 Connaught Queen Street Cleverly Street 29 500 31 020 31 780# Road Cleverly Street Gilman Street 39 440 43 670 42 680 Central Gilman Street Queen Victoria 129 320 111 460 114 160# Street Queen Victoria Harbour View 124 620# 130 240 132 460 Street Street Pedder Street Cotton Tree 136 030 112 760 137 350 Drive Queen's Des Voeux Road Ice House Street 22 220# 21 930# 22 470# Road Central Central Ice House Street Wyndham Street 27 540# 27 170# 24 400 Wyndham Street D'Aguilar Street 16 180# 15 970# 16 820 D'Aguilar Street Queen Victoria 9 420# 9 290# 9 520# Street Queen Victoria Bonham Strand 14 010 12 870 11 920 Street Des Voeux Morrison Street Queen Victoria 6 230 6 550 6 360 Road Street Central Queen Victoria Pedder Street 16 140 15 590# 15 890# Street Pedder Street Garden Road 6 650# 6 420# 6 540#

Notes:

* TD conducted traffic flow survey for each road section.

# Deduced by vehicle growth rate.

3646 LEGISLATIVE COUNCIL ― 15 February 2017

2. The percentage of vehicular flow for various classes of vehicles in the following road sections from 2013 to 2015:

Bus

d - deck - deck Year and - deck Bus Taxi Non

Road Section Vehicle Single Private Car Light Goods Goods Light Motor Cycle Double Private Light Goods Vehicle Goods franchise Medium/Heavy Medium/Heavy Franchised Bus Franchised Bus Franchised Public Light Bus 2013 Connaught Road 1.8 29.2 42.5 0.8 1.8 10.1 0.8 2.1 0.3 10.5 Central (Cleverly Street to Gilman Street) Queen's Road 2.3 30.5 39.7 0.6 2.7 15.4 1.3 0.9 0.0 6.6 Central (Queen Victoria Street to Bonham Strand) Des Voeux Road 1.2 28.0 18.2 0.2 0.0 9.6 0.9 0.6 1.2 40.1 Central (Morrison Street to Queen Victoria Street) 2014 Connaught Road 2.1 31.8 38.3 0.7 1.9 11.3 1.1 2.4 0.3 10.2 Central (Cleverly Street to Gilman Street) Queen's Road 2.7 33.6 38.3 0.8 2.3 13.5 1.3 0.7 0.0 7.0 Central (Queen Victoria Street to Bonham Strand) Des Voeux Road 0.7 30.2 18.4 0.4 0.0 9.2 0.8 0.4 0.9 39.0 Central (Morrison Street to Queen Victoria Street) 2015 Connaught Road 1.9 35.2 34.9 0.4 1.6 12.4 0.8 2.2 0.2 10.5 Central (Cleverly Street to Gilman Street) LEGISLATIVE COUNCIL ― 15 February 2017 3647

Bus

d - deck - deck Year and - deck Bus Taxi Non

Notes:

(1) Percentage of various classes of vehicles is calculated from the traffic flow survey of weekdays (Monday to Friday) from 7:00 am to 11:00 pm.

(2) For the above years, the vehicle class survey was conducted only in Connaught Road Central (Cleverly Street to Gilman Street), Queen's Road Central (Queen Victoria Street to Bonham Strand) and Des Voeux Road Central (Morrison Street to Queen Victoria Street).

Annex 4

Respirable Suspended Particulates and Nitrogen Oxides emitted by Various Classes of Vehicles on Sections of Des Voeux Road Central, Connaught Road Central and Queen's Road Central within Central District and the Respective Percentages (Preliminary Estimates)

Emission (Tonnes) and Percentage Respirable Year Road Vehicle Class Nitrogen Oxides Suspended Particulates 2013 Connaught Motor Cycle <1 0% <1 1% Road Private Car 8 4% <1 4% Central Taxi 149 70% <1 0% Goods Vehicle of 5.5 7 3% <1 20% tonnes or below 3648 LEGISLATIVE COUNCIL ― 15 February 2017

Emission (Tonnes) and Percentage Respirable Year Road Vehicle Class Nitrogen Oxides Suspended Particulates Goods Vehicle over 5.5 12 5% 1 32% tonnes Private Light Bus 1 1% <1 3% Public Light Bus 2 1% <1 9% Non-franchised Bus 4 2% <1 6% Franchised Bus 31 14% <1 25% Des Voeux Motor Cycle <1 0% <1 0% Road Private Car <1 2% <1 1% Central Taxi 9 29% <1 0% Goods Vehicle of 5.5 <1 1% <1 7% tonnes or below Goods Vehicle over 5.5 <1 3% <1 12% tonnes Private Light Bus <1 0% <1 0% Public Light Bus <1 0% <1 0% Non-franchised Bus <1 1% <1 3% Franchised Bus 20 64% <1 76% Queen's Motor Cycle <1 0% <1 1% Road Private Car <1 3% <1 3% Central Taxi 23 67% <1 0% Goods Vehicle of 5.5 2 6% <1 31%

tonnes or below Goods Vehicle over 5.5 <1 2% <1 10%

tonnes Private Light Bus <1 0% <1 1% Public Light Bus <1 2% <1 21% Non-franchised Bus <1 2% <1 5% Franchised Bus 6 18% <1 29%

LEGISLATIVE COUNCIL ― 15 February 2017 3649

Emission (Tonnes) and Percentage Respirable Year Road Vehicle Class Nitrogen Oxides Suspended Particulates 2014 Connaught Motor Cycle <1 0% <1 1% Road Private Car 2 2% <1 5% Central Taxi 28 28% <1 0% Goods Vehicle of 5.5 10 10% <1 23% tonnes or below Goods Vehicle over 5.5 9 9% <1 20% tonnes Private Light Bus <1 1% <1 1% Public Light Bus 2 2% <1 9% Non-franchised Bus 9 9% <1 11% Franchised Bus 39 39% <1 30% Des Voeux Motor Cycle <1 0% <1 0% Road Private Car <1 1% <1 2% Central Taxi 2 6% <1 0% Goods Vehicle of 5.5 <1 2% <1 6% tonnes or below Goods Vehicle over 5.5 <1 3% <1 10% tonnes Private Light Bus <1 0% <1 0% Public Light Bus <1 0% <1 0% Non-franchised Bus <1 1% <1 2% Franchised Bus 25 86% <1 79% Queen's Motor Cycle <1 0% <1 1% Road Private Car <1 2% <1 4% Central Taxi 5 27% <1 0% Goods Vehicle of 5.5 2 13% <1 27% tonnes or below Goods Vehicle over 5.5 <1 5% <1 11% tonnes Private Light Bus <1 1% <1 1% Public Light Bus <1 4% <1 19% Non-franchised Bus <1 3% <1 4% Franchised Bus 8 46% <1 34%

3650 LEGISLATIVE COUNCIL ― 15 February 2017

Emission (Tonnes) and Percentage Respirable Year Road Vehicle Class Nitrogen Oxides Suspended Particulates 2015 Connaught Motor Cycle <1 1% <1 1% Road Private Car 2 2% <1 7% Central Taxi 13 16% <1 0% Goods Vehicle of 5.5 10 13% <1 21% tonnes or below Goods Vehicle over 5.5 8 10% <1 15% tonnes Private Light Bus <1 1% <1 1% Public Light Bus 2 3% <1 7% Non-franchised Bus 9 11% <1 13% Franchised Bus 35 44% <1 34% Des Voeux Motor Cycle <1 0% <1 0% Road Private Car <1 1% <1 2% Central Taxi <1 3% <1 0% Goods Vehicle of 5.5 <1 3% <1 6% tonnes or below Goods Vehicle over 5.5 <1 3% <1 6% tonnes Private Light Bus <1 0% <1 0% Public Light Bus <1 0% <1 0% Non-franchised Bus <1 1% <1 2% Franchised Bus 20 89% <1 83% Queen's Motor Cycle <1 0% <1 1% Road Private Car <1 2% <1 6% Central Taxi 2 16% <1 0% Goods Vehicle of 5.5 2 16% <1 26% tonnes or below Goods Vehicle over 5.5 <1 6% <1 9% tonnes Private Light Bus <1 1% <1 1% Public Light Bus <1 3% <1 10% Non-franchised Bus <1 5% <1 6% Franchised Bus 6 50% <1 40%

LEGISLATIVE COUNCIL ― 15 February 2017 3651

Law enforcement against unfair trade practices

5. DR HELENA WONG (in Chinese): President, the Trade Descriptions (Unfair Trade Practices) (Amendment) Ordinance 2012 amended the Trade Descriptions Ordinance (Cap. 362) to crack down on common unfair trade practices such as false trade descriptions or representations in relation to goods or services. The relevant amendments came into full operation on 19 July 2013. In December last year, the findings of a test conducted by a Hong Kong university, which was commissioned by an environmental group, showed that among the seven seafood samples taken from supermarkets, four of them had labels bearing incorrect names or places of origin of food. For example, an areolated coral grouper was labelled as leopard coral grouper, the retail price of which is more than double that of the former. Regarding the enforcement of the aforesaid legislative amendments by the Customs and Excise Department ("C&E"), will the Government inform this Council:

(1) since the aforesaid legislative amendments came into operation, whether C&E has inspected supermarkets (i) proactively and (ii) upon receipt of complaints each year for the purpose of enforcing the provisions concerned; if C&E has, of the respective numbers of inspections; if not, the reasons for that;

(2) since the aforesaid legislative amendments came into operation, whether C&E has invoked the provisions concerned to institute prosecutions against supermarket operators who allegedly committed the relevant offences; if C&E has, of the number of convictions and the penalties generally imposed on the convicted persons;

(3) given that section 30L of Cap. 362 provides that an authorized officer may, with the consent in writing of the Secretary for Justice, accept a written undertaking given by a person who has committed the relevant offences not to continue or repeat the unlawful conduct covered by the ordinance or not to engage in conduct of that kind, or any conduct of a substantially similar kind, in the course of any trade or business, as an alternative to criminal prosecution, and that sections 30P and 30Q respectively provides that an authorized officer may apply to the District Court for an injunction or interim injunction to prohibit a trader from continuing or repeating the 3652 LEGISLATIVE COUNCIL ― 15 February 2017

unlawful conduct, whether C&E has invoked such provisions since the legislative amendments came into operation; if C&E has, of the details; if not, the reasons for that; and

(4) whether C&E has other measures in place to prevent supermarket operators from contravening the requirements of the aforesaid legislative amendments, so as to safeguard the rights and interests of consumers; if C&E does, of the details; if not, the reasons for that?

SECRETARY FOR COMMERCE AND ECONOMIC DEVELOPMENT (in Chinese): President, the Government attaches great importance to protecting consumer rights. The Trade Descriptions Ordinance ("the Ordinance") criminalizes some commonly seen unfair trade practices. The Customs and Excise Department ("C&ED") adopts a three-pronged approach to implement the Ordinance proactively, including law enforcement actions, compliance promotion and public education.

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

(1) Since the amendments to the Ordinance which prohibit unfair trade practices came into effect on 19 July 2013, as at end 2016, C&ED initiated 46 inspections in relation to supermarkets' trade practices suspected of breaching the Ordinance. It also commenced investigation into 274 cases in response to complaints.

(2) From 19 July 2013 to end 2016, C&ED prosecuted eight cases in relation to supermarkets breaching the Ordinance. All of these cases resulted in convictions, with fines handed down by the Court ranging from $1,000 to $90,000.

(3) C&ED has so far not invoked sections 30L, 30P or 30Q of the Ordinance to deal with supermarkets suspected of breaching the Ordinance. As to other traders, C&ED has, under section 30L of the Ordinance and with the written consent of the Secretary for Justice, accepted from traders in 10 cases a total of 11 written undertakings to cease the relevant trade conduct.

LEGISLATIVE COUNCIL ― 15 February 2017 3653

Following investigation, C&ED decides on the appropriate enforcement tool or measure (such as criminal prosecution or civil enforcement actions) to be used by duly considering all relevant circumstances of the case, including the evidential proof, the nature and severity of the offence, the number of consumers affected, the extent of impact, whether the trader has any conviction record, etc.

(4) C&ED adopts a three-pronged approach in its implementation of the Ordinance, including law enforcement actions, compliance promotion and public education.

On enforcement, C&ED has all along been handling complaints proactively. It conducts in-depth investigation and evidence gathering, and takes appropriate enforcement actions in accordance with the particular facts and evidence of cases. Apart from processing complaints, C&ED also conducts risk and intelligence assessment, and initiates inspections in relation to the sales practices of supermarkets as and when necessary.

On compliance promotion, C&ED has organized six seminars for supermarket operators to date, with a view to strengthening understanding of the Ordinance among frontline staff and managers, and reminding them of the importance to comply with the fair trading provisions. Management staff are also urged to adopt suitable measures to prevent inappropriate trade conduct that would jeopardize consumer rights.

On public education, C&ED works with the Consumer Council and makes use of a variety of media to promote the concept of "smart consumption" in the community.

Law enforcement actions against the use of mobile phones by drivers while driving

6. MR WONG TING-KWONG (in Chinese): President, to enhance road safety, the Government implemented legislation in 2000 to prohibit drivers from using mobile phone by holding it in their hands or between their heads and shoulders while the vehicle is in motion, and extended the legislation in 2001 to 3654 LEGISLATIVE COUNCIL ― 15 February 2017 cover the use of other hand-held telecommunications equipment. I have received quite a number of complaints from members of the public that incidents of drivers contravening the aforesaid legislation while driving has become more common in recent years. In this connection, will the Government inform this Council:

(1) whether it has studied the reasons why the aforesaid illicit acts have become more common in recent years; if so, of the outcome, and whether such reasons include the failure of the authorities to take law enforcement actions vigorously; if it has not studied, the reasons for that;

(2) of (i) the number of cases in which prosecutions were instituted against drivers for such illicit acts and (ii) the number of persons prosecuted in each of the past five years; the (iii) general and (iv) maximum penalties imposed on the convicted persons;

(3) of the number of repeated offenders among the convicted persons mentioned in (2), and the highest number of times for which they repeated the offences;

(4) whether it will consider increasing the relevant penalties to enhance the deterrent effect; if so, of the details; if not, the reasons for that; and

(5) whether it has plans to step up promotional and educational efforts with a view to improving drivers' safety awareness and driving attitude, thereby eradicating such illicit acts; if so, of the details; if not, the reasons for that?

SECRETARY FOR TRANSPORT AND HOUSING (in Chinese): President, my consolidated reply to Mr WONG Ting-kwong's question is as follows:

Under section 42 of the Road Traffic (Traffic Control) Regulations (Cap. 374G), if a motor vehicle being driven by a driver is in motion, he shall not use a mobile telephone while holding it in his hand or between his head and shoulder, or use any other telecommunications equipment or any accessory to LEGISLATIVE COUNCIL ― 15 February 2017 3655 such a mobile telephone or such equipment while holding it in his hand. A driver who contravenes the section is liable on conviction to a maximum fine of $2,000. The Police may also issue a fixed penalty notice pursuant to the Fixed Penalty (Criminal Proceedings) Ordinance (Cap. 240) imposing a fine of $450.

The table below sets out the numbers of cases, in each of the past five years, where the Police instituted prosecution against a driver who, whilst driving, used a mobile telephone while holding it in his hand or between his head and shoulder, or used any other telecommunications equipment or any accessory to such a mobile telephone or such equipment while holding it in his hand:

2012 2013 2014 2015 2016 Number of prosecution 28 762 27 254 22 015 22 270 17 749 cases

The Police have not maintained any data on the numbers of persons involved in the prosecution cases above, the penalties imposed on conviction, the recidivism rate, and the highest number of times the offenders repeated the offences.

Data of the Transport Department show that in the past five years there were only three traffic accidents involving death or injury relating to drivers using mobile telephones whilst driving. The Government will continue to closely monitor the prosecution statistics, accident trends and other factors, and will review the penalties for the relevant offences where necessary.

The Government attaches great importance to promoting road safety through publicity and educational efforts. One of the themes of the publicity campaigns launched by government departments and the Road Safety Council is "driving attentively", which is promoted by means of announcements in the public interest, promotional flyers and carnivals. The message of attentive driving includes a reminder to drivers that, whilst driving, they should not use hand-held mobile devices which hamper their driving. This will continue to be a highlight in the publicity efforts in 2017.

Although the Government has not conducted the type of study referred to in the question of Mr WONG, we believe that drivers' use of hand-held mobile devices whilst driving is largely a matter of their driving attitude and safety awareness. We will continue to make targeted publicity and educational efforts to change the improper behaviour and attitude of some drivers and to raise their 3656 LEGISLATIVE COUNCIL ― 15 February 2017 road safety awareness. At the same time, the Police will, according to their "Selected Traffic Enforcement Priorities", continue to accord priority to combating drivers who hold in their hands and use hand-held mobile devices whilst driving, and will step up enforcement action accordingly.

Nomination of representatives of arts interests for appointment as members of the Hong Kong Arts Development Council

7. MR MA FUNG-KWOK (in Chinese): President, according to the Hong Kong Arts Development Council Ordinance (Cap. 472), the Chief Executive may appoint up to a total of 10 persons nominated by 10 specified arts interests as members of the Hong Kong Arts Development Council ("HKADC") for a term not exceeding three years. The exercise to nominate representatives of arts interests ("nomination exercise") is to be conducted in four phases. In Phase 1, eligible arts organizations and individual arts workers may apply for registration to take part in the nomination exercise. In Phase 2, members and the relevant employees of registered arts organizations may apply for registration as voters, while registered individual arts workers become voters automatically. Registered voters may seek candidature in Phase 3 and elect representatives for the Chief Executive's appointment in Phase 4. The nomination exercise for the new term of HKADC, which commenced on 1 January this year, was held from May to November last year. In order to ensure that the organization applicants were closely associated with the specified arts interests, the authorities implemented two new criteria ("new criteria") in Phase 1 of that nomination exercise, requiring organization applicants to meet the following conditions in 2016: (i) their principal business/work must fall within one of the 10 specified arts interests, and (ii) they must have conducted works or activities related to the relevant arts interests during the three years preceding the commencement of the nomination exercise. In this connection, will the Government inform this Council:

(1) whether it has assessed the reasons why there was a significant drop in the number of arts organizations registered in the nomination exercise last year as compared with that of 2013; of the number of arts organizations registered in the 2013 nomination exercise which did not reapply for registration in the nomination exercise last year and the reasons for that; the measures in place to boost the number in the next nomination exercise;

LEGISLATIVE COUNCIL ― 15 February 2017 3657

(2) of the number of arts organizations newly registered in the nomination exercise last year; the respective numbers of arts organizations which were unsuccessful in registration due to (i) their failure to substantiate that they had conducted works or activities related to the relevant arts interests during the preceding three years, and (ii) other reasons (please specify);

(3) of the measures taken by the Home Affairs Bureau ("HAB") in the past three years and the publicity work undertaken by the nomination agent after being appointed in December of the preceding year to enable the arts organizations to have a clear understanding of the new criteria;

(4) of the publicity work undertaken by HAB and the nomination agent during Phase 2 of the nomination exercise to enable members and the relevant employees of registered arts organizations to have a clear understanding of the related procedure for voter registration, and encourage them to register as voters;

(5) whether HAB will consider extending the applicability of the new criteria to individual arts workers in future nomination exercises, or consider abolishing the requirement that organization applicants must fulfil the new criteria, so as to ensure consistency between the application conditions to be met by arts organizations and those by individual arts workers;

(6) whether HAB will consider allowing winners of overseas or Mainland honours or awards and graduates having equivalent qualifications conferred by recognized overseas or Mainland institutions to register as individual arts workers in future; if HAB will not, of the reasons for that; and

(7) as there are views that the coverage of the current 10 specified arts interests is not comprehensive, for example, not including stage design and technology, whether HAB will consider reviewing the need to expand the scope of the arts interests; if HAB will not, of the reasons for that?

3658 LEGISLATIVE COUNCIL ― 15 February 2017

SECRETARY FOR HOME AFFAIRS (in Chinese): President, established in 1995, the Hong Kong Arts Development Council ("HKADC") is a statutory body set up to promote the development of arts in Hong Kong. Under section 3 of the Hong Kong Arts Development Council Ordinance (Cap. 472), HKADC comprises 27 members, of which a Chairman, a Vice-chairman and not more than 22 other members shall be appointed by the Chief Executive(1). Pursuant to section 3(4) and (5) under the Ordinance, of the 22 other members, the Chief Executive may appoint up to 10 members nominated by the specified arts interests (viz. arts administration, arts criticism, arts education, Chinese opera (Xiqu), dance, drama, film arts, literary arts, music and visual arts).

The Chief Executive may by notice in the Gazette specify organizations or individuals for the 10 specified arts interests to participate in the nomination of representatives for the arts interests concerned. The organizations or individuals representing the specified arts interests shall be, in the opinion of the Chief Executive, representative of that arts interest.

The Home Affairs Bureau has been assisting the arts sector in conducting an exercise to nominate representatives of the specified arts interests ("the Nomination Exercise") by administrative arrangements for the Chief Executive's consideration of appointment as members for the new term of HKADC pursuant to the Hong Kong Arts Development Council Ordinance. The Nomination Exercise is conducted every three years.

Eligibility criteria for arts organizations

For Nomination Exercises conducted in 2010 and earlier, in applying for participation in the exercise concerned, arts organizations would be eligible provided that they were registered with the aim of promoting the development of arts(2), and they had been set up for at least one year prior to the commencement of the Nomination Exercise concerned. Arts organizations successfully

(1) The remaining three members are ex-officio members, i.e. the Secretary for Home Affairs or his representative; the Permanent Secretary for Education or his representative; and the Director of Leisure and Cultural Services or his representative.

(2) The organization shall be a statutory arts organization in Hong Kong, or have registered under the Societies Ordinance, the Companies Ordinance or the Trade Unions Ordinance in Hong Kong; and be formed and operated under a constitution or a memorandum and articles of association. LEGISLATIVE COUNCIL ― 15 February 2017 3659 registered in the Nomination Exercises before 2010 were automatically eligible for subsequent exercises without the need to submit application afresh.

In response to the recommendations made by HKADC on the review of the 2013 Nomination Exercise, the Home Affairs Bureau has implemented new measures from the 2013 Nomination Exercise onwards to adjust the eligibility criteria applicable to arts organizations gradually, in order to remove arts organizations registered in previous Nomination Exercises but are no longer active in their respective arts interests. These measures include:

(a) from the 2013 Nomination Exercise onwards, arts organizations already registered in previous exercises are required to submit a declaration in each exercise to reaffirm that their organizations continue to "aim at promoting the development of arts"; and

(b) implementing new criteria from the 2016 Nomination Exercise to require that the principal business/work of the arts organizations must be related to their respective arts interest(s), and that the organizations must have conducted works or activities related to the respective arts interest(s) during the three years preceding the commencement of the Nomination Exercise, in order to ensure that the organizations are more closely related to the arts interest(s) concerned and that they are, to a certain extent, representative of such arts interest(s).

My reply to the questions raised by Mr MA Fung-kwok is as follows:

(1) and (2)

A total of 679 arts organizations have successfully registered under Phase 1 (Registration of Arts Organizations and Individual Arts Workers) of the 2016 Nomination Exercise (a 7% decrease from 730 organizations in 2013), including 210 newly registered arts organizations. Another 61 applications made by new arts organizations were not approved, including 11 organizations which failed to substantiate that they had conducted works or activities related to the relevant arts interest(s) during the preceding three years. Other major reasons for unsuccessful registration by organizations include failure to substantiate their principal 3660 LEGISLATIVE COUNCIL ― 15 February 2017

business/work of the arts organization in relation to the specified arts interest(s); not being a statutory arts organization, or not registered under the Societies Ordinance, the Companies Ordinance, the Business Registration Ordinance or the Trade Unions Ordinance in Hong Kong operating under a constitution or articles of association; set up for less than one year and late application, etc.

For the 2016 Nomination Exercise, the application results of arts organizations previously registered in the 2013 Nomination Exercise are as follows:

Application result Number of organizations Successfully registered again 469 (64%) Did not apply for registration 227 (31%) Failed to register due to reasons such as 34 (5%) late applications or failure to meet the eligibility criteria# Total 730 (100%)

Note:

# For example, the activity records provided by arts organization failed to demonstrate their direct relationship with the arts interests under application, no activities related to the relevant arts interests were conducted during the three years preceding the commencement of the exercise, etc.

(3) In the past, we have facilitated arts organizations in gaining a clear understanding of the new criteria mentioned above through different channels, and arranged publicity for the Nomination Exercise:

(a) The new eligibility criteria to be implemented from the 2016 Nomination Exercise onwards was announced in January 2013 when the Home Affairs Bureau briefed the Panel on Home Affairs of the Legislative Council on the arrangements for the 2013 Nomination Exercise. Moreover, the Nomination Agent had issued letters to arts organizations participated in the past exercise to inform them that the above new criteria would be implemented starting from the 2016 Nomination Exercise;

LEGISLATIVE COUNCIL ― 15 February 2017 3661

(b) HKADC conducted a one-month public consultation in August 2015 on the arrangements for the 2016 Nomination Exercise. The consultation document has included a reminder to arts organizations about the new criteria to be implemented;

(c) A month prior to the commencement of the 2016 Nomination Exercise (i.e. February 2016), the Nomination Agent issued letters to all arts organizations registered to participate in the 2013 Nomination Exercise to inform them of the arrangements and eligibility criteria for the 2016 Nomination Exercise, invite them to attend briefing sessions and register for the Nomination Exercise. The letter clearly indicated that all arts organizations participated in the previous exercises must register again and provide documentary proof; and

(d) As in past exercises, we had implemented various publicity measures during the 2016 Nomination Exercise to enable arts organizations and individual arts workers to take note of the arrangement and eligibility criteria for the Nomination Exercise. These measures include dissemination of up-to-date information of the exercise through a dedicated website; organizing briefing sessions to introduce the arrangements for the exercise; publicizing the exercise and disseminating latest messages through press releases, radio announcements, mails, electronic mails and SMS messages, placing advertisements at a number of newspapers and magazines; and putting up posters and leaflets on the exercise at major arts and cultural venues. In fact, among the arts organizations successfully registered in the 2016 Nomination Exercise, over 200 are newly registered arts organizations.

(4) During the phase of voter registration by arts organizations, the Nomination Agent had issued letters, application guidelines and voter registration forms to all eligible arts organizations successfully registered under Phase 1. Through press releases, the dedicated website for the exercise, publicity posters, advertisements on newspapers and magazines and radio announcements, eligible arts organizations were encouraged to register their members/employees 3662 LEGISLATIVE COUNCIL ― 15 February 2017

as voters. Among the 5 863 registered voters for the 2016 Nomination Exercise, around 3 600 voters were registered through arts organizations.

(5) to (7)

HKADC will consult the arts sector and the public on the arrangements for the Nomination Exercise around one year before the commencement of the exercise, and make recommendations to the Government.

HKADC has consulted its 10 art-form groups on the recommendation of adding a new arts interest on "Theatre and Entertainment Arts/Technical Arts" and different views were received. After discussion, HKADC considers that it has to further study the justifications for adding the new arts interest, it also has to review HKADC's long-term development direction and examine how the development of the relevant sector can be facilitated, in order to facilitate further discussion. We will keep in view the progress of HKADC's work in respect of the addition of a new arts interest.

We will consider whether adjustment should be made to the respective eligibility criteria currently applicable to arts organizations and individual arts workers in the light of the review to be carried out by HKADC in preparation for the next Nomination Exercise and HKADC's comments.

Hospital Authority's arrangements for healthcare manpower, services and meetings to tackle influenza surges

8. DR PIERRE CHAN (in Chinese): President, regarding the arrangements for healthcare manpower, services and meetings made by the Hospital Authority ("HA") to tackle influenza surges, will the Government inform this Council:

(1) whether it knows the respective total numbers of (i) additional beds, (ii) additional doctors, (iii) additional nurses, and (iv) additional LEGISLATIVE COUNCIL ― 15 February 2017 3663

allied health professionals, for each specialty/department in public hospitals in each of the past five years (set out such information in the table below);

2012 … 2016 Specialty/Department (i) (ii) (iii) (iv) (i) (ii) (iii) (iv) Accident and Emergency ("A&E") Internal Medicine Paediatrics Laboratories … Total:

(2) if it knows whether HA accorded, in the past five years, priorities in allocating additional beds and healthcare staff to those specialties/departments which were most affected by influenza surges (including the A&E, Internal Medicine and Paediatrics departments as well as Laboratories);

(3) whether it knows, regarding the various types of meetings held in the HA headquarters and various public hospitals in each of the past two years, the (i) total number of meetings, (ii) total number of meeting hours involved and (iii) total attendance of healthcare staff at such meetings; among such meetings, the (iv) total number of meetings which were dedicated to discussions on matters relating to tackling influenza surges, (v) total number of meeting hours involved, and (vi) total attendance of healthcare staff at such meetings (set out such information in a table); and

(4) as the Steering Committee on Review of Hospital Authority put forward in its report published in July 2015 that "HA should coordinate with relevant specialties to address the serious access block problem in A&E Departments in concerned hospitals", whether it knows the progress made by HA in implementing the recommendation?

3664 LEGISLATIVE COUNCIL ― 15 February 2017

SECRETARY FOR FOOD AND HEALTH (in Chinese): President, my reply to the question raised by Dr Pierre CHAN relating to the health care manpower and measures for coping with influenza surges is as follows:

(1) The numbers of hospital beds and health care personnel in the Hospital Authority ("HA") in the past five years are set out in Annex 1 and Annex 2 respectively.

(2) HA develops annual plans for the number of additional beds and health care personnel to be provided based on service demand, estimated service provision and availability of resources. In the past five years, the additional beds and personnel provided were mostly allocated to those departments responsible for tackling winter surges.

A total of 833 additional beds were provided by HA from 2012 to 2016, of which 542 (65%) were provided for the specialty of medicine and 156 (19%) for that of orthopaedics and traumatology. On manpower front, during the same period, the number of doctors increased by 499, of which 239 (48%) were deployed to the specialties of accident and emergency ("A&E"), medicine, paediatrics and pathology, while the number of nurses increased by 3 686, of which 1 811 (49%) were deployed to the specialties of A&E, medicine and paediatrics.

(3) The number of internal meetings related to the specialties of medicine, orthopaedics and traumatology, paediatrics and A&E held at the HA Head Office during the winter surge from January to March and the average attendance of health care personnel in each of the meetings in the past five years are set out at Annex 3. HA does not maintain statistics on the total number of hours of these internal meetings.

In addition, the Task Force on Winter Surge under HA will generally hold meetings before the winter surge to discuss preparatory work. When there is a surge in service demand, the Task Force will convene emergency meetings to discuss response measures having regard to the actual situation and needs.

LEGISLATIVE COUNCIL ― 15 February 2017 3665

HA has also advised the specialties of medicine, paediatrics, orthopaedics and traumatology and A&E to avoid convening major internal meetings during annual winter surge period from January to March as far as possible, especially after long holidays.

(4) To better address the access block problem in A&E departments, HA has formulated specific key performance indicators, including preparing monitoring reports on access block to reflect the frequency and severity of such problem in individual hospitals. In addition, HA has enhanced the dissemination of information at different levels for hospital management and relevant health care personnel, so as to keep hospitals abreast of the latest situation in a more effective way and enable them to make prompt response. For example, hospital management will be informed of the latest access block data through emails every day, and preliminary data on access block will be disseminated via emails every week during winter surge to facilitate formulation of response measures by hospitals. As for information system, frontline staff can check the utilization of beds in their respective hospitals and other related hospitals through the hospital bed management system in order to arrange bed deployment among hospitals.

The HA Head Office also provides policy and resource support for all clusters, including formulating the A&E Support Session Programme, relaxing the application criteria for the Special Honorarium Scheme and the Continuous Night Shift Scheme, and hiring undergraduate nursing students and part-time staff. Meanwhile, to meet service demand, all clusters also strive to provide additional beds and ensure flexible use of their existing facilities by, for example, transferring patients with milder conditions to convalescent hospitals to improve patient flow. Besides, new mode of service delivery (e.g. enhancing geriatric team support for A&E departments) is adopted to facilitate timely referral of patients to the most appropriate caring settings.

3666 LEGISLATIVE COUNCIL ― 15 February 2017

Annex 1

Number of hospital beds in HA

Number of hospital beds 2012 2013 2014 2015 2016 (as at 31 March of the year) All specialties 27 062 27 153 27 440 27 645 27 895 Major specialties: Gynaecology 463 478 474 488 481 Medicine 8 474 8 488 8 660 8 762 9 016 Obstetrics 809 809 834 831 808 Orthopaedics and traumatology 2 278 2 310 2 360 2 387 2 434 Paediatrics 1 077 1 078 1 099 1 092 1 088 Psychiatry 3 607 3 607 3 607 3 607 3 607 Surgery 2 938 2 940 2 940 2 957 2 979

Annex 2

Number of health care personnel in HA

Number of health care personnel Specialties Total (as at 31 March of the year) A&E Medicine Paediatrics Pathology 2012 Doctors 5 165 404 1 125 308 195 Nurses 20 901 817 5 450 1 179 NA Allied health professionals 5 944 NA NA NA NA 2013 Doctors 5 260 410 1 149 309 190 Nurses 21 816 853 5 597 1 229 NA Allied health professionals 6 302 NA NA NA NA 2014 Doctors 5 376 437 1 171 331 193 Nurses 22 759 961 6 140 1 340 NA Allied health professionals 6 609 NA NA NA NA 2015 Doctors 5 475 444 1 202 342 198 Nurses 23 791 993 6 480 1 392 NA Allied health professionals 6 888 NA NA NA NA LEGISLATIVE COUNCIL ― 15 February 2017 3667

Number of health care personnel Specialties Total (as at 31 March of the year) A&E Medicine Paediatrics Pathology 2016 Doctors 5 664 462 1 253 351 205 Nurses 24 587 1 079 6 756 1 422 NA Allied health professionals 7 268 NA NA NA NA

Notes:

(1) The manpower figures are calculated on full-time equivalent basis including permanent, contract and temporary staff in HA.

(2) The doctor manpower figures do not include interns and dental officers.

(3) No classification of Pathology specialty for nursing manpower.

Annex 3

Number of internal meetings held at the HA Head Office and average attendance of health care personnel (January to March of the year)

Number of meetings Average attendance of health care personnel 2012 5 22 2013 5 21 2014 5 23 2015 4 26 2016 4 24

Proposed policy to raise the eligible age for elderly Comprehensive Social Security Assistance

9. DR LAU SIU-LAI (in Chinese): President, in his Policy Address delivered last month, the Chief Executive proposed a new policy for the Comprehensive Social Security Assistance ("CSSA") Scheme, under which the eligible age for elderly CSSA will be raised from 60 to 65, so as to align with the direction of the population policy to extend the retirement age. Upon the implementation of that policy, the monthly CSSA payment that new CSSA applicants who are single able-bodied persons aged between 60 and 64 may receive will be reduced by over $1,000, from the current $3,435 to $2,420 (i.e. the amount for single able-bodied adults aged under 60). In addition, the supplements and certain special grants for the elderly are not applicable to them. In this connection, will the Government inform this Council:

3668 LEGISLATIVE COUNCIL ― 15 February 2017

(1) of the respective (i) employment rates, (ii) unemployment rates and (iii) numbers of CSSA recipients among the various age groups of the population in each of the past five financial years (set out separately in tables of the same format as the table below);

Financial Age group year 15-19 20-29 30-39 40-49 50-59 60-64 65-70 Over 70 2011-2012 2012-2013 2013-2014 2014-2015 2015-2016

(2) of a breakdown of the number of CSSA recipients aged between 60 and 64 in each of the past five financial years, by their reasons for receiving CSSA payments;

(3) of the new measures that the authorities have put in place to raise the employment rate for people aged between 60 and 64, so as to dovetail with the implementation of the aforesaid policy;

(4) whether the authorities have assessed the impacts on the living standard of new CSSA applicants who are able-bodied persons aged between 60 and 64 arising from their not being granted, upon the implementation of the aforesaid policy, the various supplements and special grants which CSSA recipients of the same age group are receiving under the existing CSSA system; if they have assessed, of the details, and whether the authorities will make special arrangements to ensure that those people can still receive the various supplements and special grants offered under the existing system; if they have not assessed, the reasons for that; and

(5) given that non-elderly able-bodied CSSA recipients are required to participate in the Support for Self-reliance Scheme so that they may find paid employment as soon as possible, whether the authorities will, upon the implementation of the aforesaid policy, require new CSSA applicants who are able-bodied persons aged between 60 and 64 to participate in the Scheme; if they will, of the details; if not, the reasons for that?

LEGISLATIVE COUNCIL ― 15 February 2017 3669

SECRETARY FOR LABOUR AND WELFARE (in Chinese): President, my reply to the question raised by Dr LAU Siu-lai is as follows:

(1) According to the General Household Survey conducted by the Census and Statistics Department, the unemployment rate with a breakdown by age groups from 2011 to 2015 is tabulated below:

Table 1: Unemployment rate with a breakdown by age groups^ (%) # Age group Calendar year 15-19 20-29 30-39 40-49 50-59 60-64 65-69 ≥70 2011 15.8 5.3 2.5 2.7 3.3 2.4 1.6 * 2012 13.9 5.3 2.4 2.8 2.9 2.5 0.8 * 2013 14.5 5.6 2.3 2.9 3.1 2.7 1.7 * 2014 12.5 5.4 2.2 2.7 3.0 3.0 2.6 2.4 2015 14.2 5.9 2.1 2.8 2.8 2.8 2.1 *

Notes:

^ Unemployment rate refers to the proportion of unemployed persons in the labour force.

# The relevant unemployment rate refers to the yearly average of the calendar year.

* The figures are not published due to large sampling error.

According to the record of the Social Welfare Department ("SWD"), the number of Comprehensive Social Security Assistance ("CSSA") recipients with a breakdown by age groups over the past five financial years is tabulated below:

Table 2: Number of CSSA recipients with a breakdown by age groups^ Financial Age group year* 15-19 20-29 30-39 40-49 50-59 60-64 65-69 ≥70 2011-2012 38 491 13 611 26 254 50 107 50 961 28 512 27 701 129 857 2012-2013 32 533 11 418 24 344 45 618 49 133 28 131 28 226 126 965 2013-2014 28 412 10 690 24 017 42 651 46 429 27 428 28 081 122 938 2014-2015 25 112 10 165 23 379 40 888 43 954 26 678 28 585 119 528 2015-2016 22 657 9 349 21 764 38 392 41 692 25 902 29 339 115 673

Notes:

^ The numbers refer to the overall numbers of recipients in the relevant age groups, i.e. including recipients who are able-bodied, disabled and in ill health.

* The numbers reflect the position as at 31 March of the relevant financial years. 3670 LEGISLATIVE COUNCIL ― 15 February 2017

(2) The objective of the CSSA Scheme is to provide a safety net of last resort to families that cannot support themselves financially owing to old age, sickness, disability, single-parenthood, unemployment, low-earnings, etc. so as to help them meet their basic needs. SWD does not keep breakdown statistics on the reasons of applying for CSSA by recipients aged 60 to 64 in each of the past financial year.

(3) Based on the findings of the "Study on the Training Needs of Mature Persons", the Employees Retraining Board ("ERB") develops training and support services to cater for the needs of mature persons aged 50 or above, including organizing the "Workplace Re-entry" course and activity series, so that mature persons may participate in accordance with their aspirations, interests and training needs. ERB provides placement follow-up services for mature persons who have completed full-time placement-tied courses. On the other hand, the Government will continue to adopt a multi-pronged strategy to provide employment services for mature persons and promote their employment among employers through various means such as setting up special counters at the job centres of the Labour Department ("LD"), providing priority registration and job referral services for mature job seekers, conducting employers' experience sharing sessions, organizing employment briefings and job fairs targeted at mature persons, etc. LD also implements the Employment Programme for the Middle-aged to encourage employers, through offering them on-the-job training allowance, to hire job seekers aged 40 or above and provide them with on-the-job training.

(4) Under the CSSA Scheme, elderly persons/disabled persons/persons in ill health will receive higher standard rates than able-bodied recipients. Moreover, eligible elderly persons/disabled persons/persons in ill health will be granted supplements, such as Community living supplement, Long-term supplement, etc., and may, in accordance with their needs and circumstances, apply for special grants which are normally not applicable to able-bodied adults, such as the grants to costs of medical, rehabilitation, surgical appliances and hygienic items, etc.

LEGISLATIVE COUNCIL ― 15 February 2017 3671

Elderly persons aged between 60 and 64 who are receiving CSSA before the Government implements the new policy of raising the eligibility age for elderly CSSA from 60 to 65 will not be affected, except when they re-apply for CSSA after having left the CSSA net, in which case the revised definition of old age will apply to them. Meanwhile, the CSSA payments of disabled persons or persons in ill health will not be affected by the new policy, i.e. they will, regardless of their age, receive CSSA payments which are higher than those applicable to able-bodied adults.

(5) SWD implements the "Support for Self-reliance Scheme" under the CSSA Scheme. It commissions non-governmental organizations ("NGOs") to assist in implementing the Integrated Employment Assistance Programme for Self-reliance ("IEAPS") to provide employable able-bodied CSSA recipients with employment assistance services. According to the needs of individual recipients, the relevant NGOs provide multifarious and one-stop employment assistance services, including assisting them in formulating job search plans, and providing them with information on employment, suitable training as well as post-employment support services, with a view to enhancing their employability and assisting them to sustain employment. The relevant arrangements do not apply to CSSA recipients who are in old age, disabled or in ill health.

New CSSA applicants aged 60 to 64 will be required to participate in IEAPS (except for those who are disabled or in ill health) after the implementation of the policy of raising the eligible age for elderly CSSA from 60 to 65.

Promotion of free trade and economic development of Hong Kong

10. MR CHAN CHUN-YING (in Chinese): President, in recent years, various nations have entered into new bilateral or multilateral free trade agreements with their trading partners one after another for promoting economic cooperation and development. However, the new President of the United States ("US") signed a presidential memorandum immediately upon assumption of office last month, confirming the withdrawal of the US from the Trans-Pacific Partnership, an agreement which the US had reached with 11 nations after years 3672 LEGISLATIVE COUNCIL ― 15 February 2017 of negotiations. There are comments that this will be conducive to the establishment of a Free Trade Area of the Asia Pacific ("FTAAP") and the negotiations on the Regional Comprehensive Economic Partnership, which China has been actively promoting in recent years. In this connection, will the Government inform this Council:

(1) whether it has assessed the impact on Hong Kong's overall economy brought about by the latest development in global trade liberalization; if it has assessed, of the outcome and the Government's counter measures; and

(2) whether it has studied the possible impact of the successful establishment of FTAAP on Hong Kong's overall economy; if it has studied, of the details; if not, the reasons for that?

SECRETARY FOR COMMERCE AND ECONOMIC DEVELOPMENT (in Chinese): President, my reply to the question raised by Mr CHAN Chun-ying is as follows:

(1) World trade has remained sluggish since the global financial crisis in 2008. According to the estimates by the International Monetary Fund, the volume of global trade in goods and services grew at an average rate of 2.8% annually during 2009 to 2016, showing a sharp deceleration as compared to the average rate of 6.1% between 2001 and 2008. Moreover, the deteriorated economic performance of advanced markets, with an average annual economic growth of merely 1.2% from the financial crisis in 2008 to last year, also awakened trade protectionist sentiments and fueled the flame of de-globalization, casting further uncertainties over the global economic and trade outlook. In particular, the stance of the new United States administration towards free trade has attracted the most attention, though details of such policy have yet to be revealed. If the trend of protectionism further intensifies to the extent which hampers global trade performance, Hong Kong, being a small and open economy, will inevitably be affected. We will continue to closely monitor the policy developments of various economies on the front of trade protectionism.

LEGISLATIVE COUNCIL ― 15 February 2017 3673

Insofar as Hong Kong is concerned, the Government upholds the belief that free trade is conducive to global economic development. Free trade does not only facilitate commodity and capital flow, and hence reduces transaction costs and lowers operating expenses; it also increases choices for consumers and gives full play to market competition. As a small and open economy, Hong Kong has all along participated actively in the World Trade Organization ("WTO") to staunchly support and promote trade liberalization, as well as to strengthen the rule-based multilateral trading system. With the globalization of the world economy, it has become a major trend for trading partners to enter into Free Trade Agreements ("FTAs") and regional economic cooperation arrangements. While committing to the multilateral trading system as the foundation, the Government also actively participates in the establishment of high-standard FTAs in line with WTO rules, with a view to enshrining the complementarity of FTAs and the multilateral trading system which can provide impetus to global trade liberalization, thus presenting new opportunities for Hong Kong's economic development. So far, Hong Kong has concluded FTAs with the Mainland China, New Zealand, the Member States of the European Free Trade Association (i.e. Iceland, Liechtenstein, Norway and Switzerland) and Chile, and is currently conducting FTA negotiations with the Association of Southeast Asian Nations ("ASEAN"), Maldives, Georgia and Macao.

(2) The eventual realization of a Free Trade Area of the Asia-Pacific ("FTAAP") is one of the key initiatives of the Asia-Pacific Economic Cooperation ("APEC"). As a member economy of APEC, Hong Kong, together with other member economies, completed in 2016 a collective strategy study on issues related to the realization of FTAAP to assess the potential economic and social costs and benefits of FTAAP, and analyse the challenges associated with the various potential pathways towards the establishment of FTAAP. The result of the study showed that advancing towards FTAAP would accelerate regional economic integration as well as enhance trade and investment growth through removal of trade barriers, thus driving long-term economic development. The recommendations of the study which set out the way forward towards the eventual 3674 LEGISLATIVE COUNCIL ― 15 February 2017

realization of FTAAP have been endorsed by APEC Leaders in the form of the Lima Declaration on FTAAP ("Lima Declaration") in November 2016 in Lima, Peru.

A dedicated working group has been set up by APEC to take forward the issues related to FTAAP. According to the Lima Declaration, the next steps of APEC are to address areas of divergence and convergence in regional and bilateral FTAs, and also to embark on work programmes to assist member economies in building consensus, deepening member economies' understanding in such agreements and enhancing their capacity to participate in high-quality and comprehensive FTAs.

As a free and open economy, Hong Kong welcomes the Lima Declaration. We will work closely with APEC member economies and participate actively in the relevant work plans of APEC so as to facilitate the early realization of FTAAP.

Moreover, we have been closely monitoring the development of regional FTAs, including the Regional Comprehensive Economic Partnership ("RCEP") which is one of the potential pathways to realize FTAAP. RCEP is currently the largest FTA negotiation in the Pan-Asia region. The combined Gross Domestic Product ("GDP") of the 16 RCEP participating economies(1) represents nearly one third of the world's GDP. All these economies are also important trading partners of Hong Kong. Hong Kong will continue to exchange views with its trading partners on the development of regional FTAs on different occasions and platforms.

(1) Including ASEAN, Mainland China, Japan, Korea, Australia, New Zealand and India.

Office of the Chief Executive-elect

11. MR MICHAEL TIEN (in Chinese): President, in the middle of last month, the Government entered into a tenancy agreement, with a rental period from late January to mid-August this year, for renting an office in a commercial building at Garden Road, Central as the Office of the fifth-term Chief LEGISLATIVE COUNCIL ― 15 February 2017 3675

Executive-elect ("CE-elect's Office"). Subsequently on the 25th of last month, the Government briefed the Panel on Constitutional Affairs of this Council on the relevant arrangements. In this connection, will the Government inform this Council:

(1) of the detailed process and the relevant records regarding the work carried out by the relevant government departments to prepare for the setting up of the CE-elect's Office, including the commencement dates, completion dates and results of the various items of the preparatory work, and the work for which the various officers were responsible (listed by the government departments to which they belonged and their post titles);

(2) of the non-private properties that had been considered by the Government as the potential location of the CE-elect's Office, and the detailed reasons why such properties were not chosen in the end;

(3) of the detailed estimated works expenditure (including the expenditures on fitting-out and reinstatement) and the detailed estimated operating expenditure (including the expenditures on security services and on the salaries and fringe benefits of directorate and non-directorate officers) for the CE-elect's Office;

(4) whether it can provide a layout plan of the CE-elect's Office showing its partitioning as well as the areas and uses of various sections; of the details of the fitting-out materials that have been chosen and whether the authorities have taken into account the principles of environmental protection in choosing such materials; and

(5) given that the estimated expenditure of the CE-elect's Office is as high as $39.96 million, which has far exceeded the estimated expenditure of some $8.29 million for the CE-elect's Office set up for the fourth-term Chief Executive five years ago, why the authorities did not take the following approach: separately submit the former to the Finance Committee of this Council to seek its approval, and enter into the tenancy agreement only after approval has been obtained?

3676 LEGISLATIVE COUNCIL ― 15 February 2017

CHIEF SECRETARY FOR ADMINISTRATION (in Chinese): President, the fifth-term Chief Executive will be elected on 26 March 2017, and will assume office on 1 July. To support the Chief Executive-elect in forming a governing team for the new term of Government, drawing up a policy plan for the new Government and making arrangements with the incumbent Government for a smooth transition, we have made reference to the arrangements for setting up the Chief Executive-elect's Office ("CEEO") upon election of the fourth-term Chief Executive in 2012. We plan to set up a CEEO which will formally commence operation once the fifth-term Chief Executive is elected, and will cease to operate by 30 June 2017.

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

(1) and (2)

The Government has been preparing for the establishment of CEEO since mid-December last year. Concerning the choice of location, Central, Admiralty and Wan Chai North are suitable areas for CEEO where executive, legislative and commercial institutions of Hong Kong are congregated, hence facilitating the Chief Executive-elect's liaison with the incumbent Government and different sectors of the community and ensuring a smooth transition. In this regard, when the preparatory work commenced, the Government first tried to identify government premises in these areas as the location for the upcoming CEEO.

The former CEEO was located at 12th floor of the West Wing of the former Central Government Offices which was vacated upon the completion of the Central Government Offices at Tamar and suitable office space thereat was immediately available for use as CEEO after minor refurbishment. However, the former Central Government Offices have now been allocated to the Department of Justice and the West Wing where the former CEEO was situated, is undergoing large-scale refurbishment work which is expected to be completed by the end of 2018. Therefore, it cannot be used to accommodate the upcoming CEEO.

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We have considered using the offices of the Murray Road Multi-storey Carpark Building. However, the dilapidated condition of the facilities there requires a long period of time for refurbishment, rendering it impossible to meet the need of CEEO in a timely manner. We have also considered the Queensway Government Offices where some office spaces are temporarily unused. However, these have been allocated to the Judiciary for the reprovisioning of supporting (e.g. human resources, training and administration) staff of the Judiciary currently working in the High Court Building, with a view to vacating space for the High Court's addition or expansion of court facilities or related services including the chambers, the Competition Tribunal, the Hong Kong Judicial Institute and the Probate Registry. The relevant comprehensive refurbishment works are almost completed. To avoid disrupting the expansion of judicial services, those offices should not be used as CEEO. In addition, we have considered the Central Government Offices at Tamar, but vacating office space for CEEO would involve temporary removal of other bureaux elsewhere or renting commercial premises, which is both costly and ineffective.

In the absence of suitable government premises that can be vacated for use in Central, Admiralty and Wan Chai North, the Government had been identifying suitable commercial premises in the vicinity as CEEO since early January, and subsequently signed a tenancy agreement with the relevant landlord on 17 January 2017.

As regards the scope of responsibilities of departments in setting up CEEO, please refer to Annex 1.

(3) and (4)

In an information paper submitted to the Panel on Constitutional Affairs in January, the Government stated that the estimated cost for fitting out CEEO and reinstatement is about $16.95 million (including $14.95 million being the preliminary estimate of the fitting-out work), and the operating expense is $23.01 million.

3678 LEGISLATIVE COUNCIL ― 15 February 2017

The estimate for the above fitting-out cost has taken into account the short-term nature of the office and the principle of simplicity in planning the specifications and project cost of the office. Upon possession of the rented premises, the relevant departments further conducted detailed assessments, and it was ascertained that the existing electrical and mechanical installations there could be used as far as possible without the need for major alteration, and the principle of simplicity could be further pursued for the fitting-out design and choice of materials for CEEO. For instance, instead of wallpapering, painting was used for refurbishment, and an open-plan layout was adopted for the office of non-directorate officers. We also strived to use demountable items and reuse some of the fitting-out materials such as carpets, wooden doors and lighting fittings in order to lower the cost of works, making the best use of materials and facilitating reinstatement in future. Accordingly, we are able to trim the estimated fitting-out cost to $10.32 million, representing a reduction of about 31%. The estimated cost of works is $9,400 per sq m, which is less than the average fitting-out cost of $14,000 per sq m for a general government office. We have set aside 10% of the estimate of the fitting-out cost as contingency provision (about $900,000). Should there be no unforeseen circumstances arising from the work process, such contingency provision will not be used and the actual expenditure will be further lowered. In respect of the current estimate of $2 million for reinstatement, we will take appropriate measures to minimize the actual cost. The breakdown of the revised estimate of the cost is as follows:

Item Revised estimate of cost ($'000) (A) Fitting-out works (1) Building works 3,040 (2) Building services 6,380 (3) Contingency provision 900 Subtotal 10,320 (B) Reinstatement 2,000 Total (A)+(B) 12,320

LEGISLATIVE COUNCIL ― 15 February 2017 3679

The breakdown of the operating expense is as follows:

Item Estimated expenditure ($'000) (A) Salaries# 6,630 (B) Rent 12,920 (C) Other general departmental expenses (1) Security 720 (2) Cleansing 140 (3) Duty visits, entertainment, 150 etc (4) Procurement of furniture, 1,930 computer and office equipment (5) Electricity charges, 520 maintenance and others Subtotal 3,460 Total (A)+(B)+(C) 23,010

Note:

# Details of the remuneration of the directorate officers and non-directorate officers are set out in Annex 2. Civil servants deployed to work in CEEO are remunerated according to the pay scales of their respective grade and rank and they enjoy fringe benefits appropriate to their rank and terms of appointment.

For security reasons, we are unable to provide the layout plan of CEEO. Details of fitting-out materials are set out in Annex 3.

(5) The operating expense of CEEO prior to 1 April 2017 can be offset by some of the savings of the Administration Wing in 2016-2017. The funds required by CEEO for 2017-2018 will be included in the 2017-2018 Estimates.

3680 LEGISLATIVE COUNCIL ― 15 February 2017

Annex 1

Preparation for Setting up the Chief Executive-elect's Office―Responsibilities of Departments

Department Scope of responsibilities Administration Wing Providing housekeeping and resource management for the Chief Executive-elect's Office ("CEEO"), coordinating bureaux and departments to deploy civil servants of the grades under their purview to work at CEEO. Architectural Services Department Carrying out fitting-out works for CEEO. Civil Service Bureau Deploying civil servants of the grades under its purview to work at CEEO. Government Logistics Department Deploying cars and civil servants of the grades under its purview to serve CEEO. Government Property Agency Identifying vacant government properties/commercial premises for office use according to the operational needs of CEEO. Information Services Department Deploying civil servants of the grade under its purview to work at CEEO. Hong Kong Police Force Advising CEEO on security matters, and providing security services to the Chief Executive-elect.

Annex 2

Pay Scale for Directorate Officers of the Chief Executive-elect's Office:

Post/Rank Number Salary/Pay Scale Director of the Chief 1 Equivalent to Director of Bureau Executive-elect's Office Secretary-general of the Chief 1 D6 Executive-elect's Office (Administrative Officer Staff Grade A) LEGISLATIVE COUNCIL ― 15 February 2017 3681

Post/Rank Number Salary/Pay Scale Private Secretary to the Chief 1 D4 Executive-elect (Administrative Officer Staff Grade B1) Deputy Private Secretary to the 1 D2 Chief Executive-elect (Administrative Officer Staff Grade C) Press Secretary to the Chief 1 D2 Executive-elect (Assistant Director of Information Services)

Pay Scale for Non-Directorate Officers of the Chief Executive-elect's Office:

Post/Rank Number Salary/Pay Scale Assistant Private Secretary to the Chief 2 MPS 45-49 Executive-elect (Senior Administrative Officer) Special Assistant to the Chief 1 MPS 45-49 Executive-elect (with reference to the rank of (senior professional level) Senior Administrative Officer) Principal Information Officer 1 MPS 40-44 Information Officer 1 MPS 28-33 Senior Official Languages Officer 1 MPS 34-44 Chief Executive Officer 1 MPS 45-49 Senior Executive Officer 1 MPS 34-44 Executive Officer I 1 MPS 28-33 Senior Personal Assistant 1 MPS 34-39 Personal Assistant 1 MPS 28-33 Senior Personal Secretary 2 MPS 22-27 Personal Secretary I 2 MPS 16-21 Personal Secretary II/ 2 MPS 4-15/ Assistant Clerical Officer MPS 3-15 Personal Chauffeur 1 MPS 11-12 Chauffeur 1 MPS 5-10 Driver 2 MPS 5-8 Assistant Clerical Officer 1 MPS 3-15 Office Assistant 1 MPS 1-6

3682 LEGISLATIVE COUNCIL ― 15 February 2017

Annex 3

Major fitting-out materials

Item Fitting-out materials Floor Fabric carpet tiles for office areas; and vinyl tiles for non-office areas (such as the store room and server room) Wall Gypsum board partition walls and painting Ceiling Mineral wool acoustic ceiling tiles (open-plan office areas and non-office areas will not be fitted with false ceiling in order to save the fitting-out cost) Building services For fire service and air-conditioning installations, existing building services provision in the premises will be used without major alteration. For lighting installation, fluorescent tubes will mainly be used. Other installations include new electrical, LAN, telephone and security systems.

Marine refuse

12. MR WU CHI-WAI (in Chinese): President, it has been reported that in recent months, vessels were frequently found illegally dumping various kinds of refuse in Mainland waters near Lantau, and some of the refuse was carried into Hong Kong waters by ocean currents, causing heavy pollution. Despite the follow-up actions taken by the Government and the Mainland authorities, marine refuse with packaging printed with simplified Chinese characters has still been found on a number of beaches in Hong Kong. In this connection, will the Government inform this Council:

(1) of the quantity of marine refuse collected by the government departments concerned in Hong Kong waters in each of the past six months (with a tabulated breakdown by eastern waters and western waters);

(2) of the number of complaints received by the authorities in the past 24 months about illegal dumping of refuse in Hong Kong waters, and the number of prosecutions instituted against the persons concerned;

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(3) as the Government has indicated that it would discuss issues relating to marine environment with the Mainland authorities through the Hong Kong-Guangdong Marine Environmental Management Special Panel set up in October last year, of the details of the relevant efforts; and

(4) whether it received, in the past 12 months, any notification from the Mainland authorities regarding illegal dumping of refuse found in Mainland waters near Hong Kong; if it did, of the details, including the law enforcement efforts made by the Mainland authorities, as well as the respective numbers of such cases uncovered and those in which the law-breakers were prosecuted?

SECRETARY FOR THE ENVIRONMENT (in Chinese): President,

(1) As pointed out in the Marine Refuse Study conducted by the Government of the Hong Kong Special Administrative Region in 2013-2014, shorelines in Tuen Mun, Tsuen Wan, Southern and Islands Districts in general tend to accumulate more refuse in the wet season. Moreover, refuse accumulated at local shorelines would be washed to sea more easily during the summer when rainfalls are high, and certain refuse would be carried by the outflow of the Pearl River into the waters and coasts of Hong Kong. The Marine Department ("MD"), the Leisure and Cultural Services Department, the Agriculture, Fisheries and Conservation Department, and the Food and Environmental Hygiene Department are responsible for collecting and cleaning up floating refuse and shoreline refuse washed ashore. During the period between July and December 2016, the total amount of marine refuse collected(1) each month is tabulated below.

Total Amount of Marine Refuse Collected Month (Tonnes) July 2016 2 084 August 2016 1 905 September 2016 1 491

(1) Regarding the statistics on the total amount of marine refuse collected by the departments concerned, a breakdown by eastern waters and western waters of Hong Kong is not available. 3684 LEGISLATIVE COUNCIL ― 15 February 2017

Total Amount of Marine Refuse Collected Month (Tonnes) October 2016 1 364 November 2016 1 174 December 2016 1 066

(2) MD is responsible for handling complaints regarding floating refuse in Hong Kong waters and enforcement against marine littering at sea. Over the past two years (from January 2015 to December 2016), MD received 526 and 888 relevant complaints respectively, and instituted 30 prosecutions against marine littering at sea.

(3) and (4)

Hong Kong and Guangdong agreed in September 2016 to set up the Hong Kong-Guangdong Marine Environmental Management Special Panel, under the framework of the Hong Kong-Guangdong Joint Working Group on Sustainable Development and Environmental Protection, to enhance exchange and communication on various regional marine environmental matters. These would include, among other things, setting up a notification and alert system on marine refuse issues and combating illegal marine dumping activities. The Special Panel was formally established and convened its first working meeting in October 2016 to discuss matters concerning the setting up of the notification and alert system on marine refuse as well as the follow-up actions on combating illegal marine dumping activities. Relevant work has been started proactively. In last October, the Department of Environmental Protection of Guangdong Province advised the Environmental Protection Department ("EPD") of Hong Kong that before the Special Panel was established, Mainland law enforcement agencies had already commenced operations both at sea and on land to proactively track down the illegal dumping activities. Patrol had also been stepped up to vigorously combat such activities. Vessels and personnel suspected of illegal activities had been detained and illegal marine dumping curbed. EPD will continue to enhance exchange and communication with relevant Mainland authorities on various regional marine environmental matters via the Special Panel.

LEGISLATIVE COUNCIL ― 15 February 2017 3685

Provision of public parking spaces in the Central and Western District

13. MR FRANKIE YICK (in Chinese): President, the Government has consulted the Central and Western District Council ("C&WDC") twice on the plan to rezone the site of Murray Road Multi-storey Carpark ("MRMCP") in Central for commercial development, and some C&WDC members raised objections on each occasion. Upon demolition of MRMCP, the number of public parking spaces for private cars and motorcycles in the Central and Western District will be reduced by 388 instantly (286 of which permanently) and 55 respectively. It has been reported that the Government also plans to rezone the sites of Rumsey Street Carpark and Star Ferry Carpark for commercial development. Some C&WDC members and local residents are worried that such carpark demolition plans will aggravate the problem of insufficient parking spaces in the district, thus worsening the problems of illegal parking, traffic congestion and roadside air pollution, etc., which increase social costs. In this connection, will the Government inform this Council:

(1) of the respective numbers and utilization rates of parking spaces for various categories of vehicles in the Central and Western District during daytime peak hours and evening non-peak hours in each of the past three years; and the respective numbers of parking spaces in the Central and Western District for various categories of vehicles to be added in the coming three years;

(2) as the authorities have indicated that due to a lack of land and existing site constraints, there is no suitable site for the provision of temporary public parking spaces in the vicinity during the redevelopment of MRMCP site to make up for the shortfall in parking spaces caused by the demolition of the carpark, whether the Government has assessed if the parking spaces provided by nearby carparks can meet the demand for parking spaces in the district during the redevelopment; if it has assessed, of the details; if not, the reasons for that;

(3) given that only 102 public parking spaces for private cars (286 fewer than the existing number) and 69 public parking spaces for motorcycles will be provided at MRMCP site after redevelopment, of the criteria adopted by the Government for determining the number of parking spaces to be provided after the redevelopment, and 3686 LEGISLATIVE COUNCIL ― 15 February 2017

whether it has assessed if such number can meet the demand for parking spaces in the district; if it has assessed and the outcome is in the affirmative, of the justifications for that; and

(4) of the details of and the implementation timetable for the plans to rezone the sites of Star Ferry Carpark and Rumsey Street Carpark for commercial development, as well as the consultation work carried out so far; whether the Government will withhold the implementation of the plans until after the completion of a car parking review with priority accorded to addressing the parking demand and supply of commercial vehicles, which is scheduled for commencement within this year?

SECRETARY FOR TRANSPORT AND HOUSING (in Chinese): President, my reply to the various parts of Mr Frankie YICK's question is as follows:

(1) The numbers of parking spaces for various classes of vehicles (including public parking spaces provided by the Government, privately operated public parking spaces and parking spaces solely for private use) in the Central and Western District over the past three years (i.e. from 2014 to 2016) are set out in Annex 1. On utilization rates, the Government does not have such statistics for the privately operated car parks. As regards the five government multi-storey car parks in the Central and Western District managed by the Transport Department ("TD"), their average utilization rates during the day period and night period in the past three years have been generally stable, and the details are set out in Annex 2.

In the coming three years, no major development projects are expected to be completed in the Central and Western District. As such, there will not be a significant increase in the number of parking spaces in the area. However, in subsequent years, some of the major development projects in the area (such as Site 3 of new Central Harbourfront ("Site 3")) will be completed progressively. These major development projects will provide suitable number of parking spaces having regard to the standards stipulated in the Hong Kong Planning Standards and Guidelines ("HKPSG") to meet the parking demand arising from the development. Where necessary, LEGISLATIVE COUNCIL ― 15 February 2017 3687

public parking spaces will also be provided in accordance with the requirements of the Government.

(2) At present, the Murray Road Multi-storey Carpark ("MRMCP") in Central provides 388 parking spaces for private cars and 55 parking spaces for motor cycles. In the traffic impact assessment for the MRMCP redevelopment project conducted by the consultant commissioned by the Government, it was anticipated that there will be adequate supply of parking spaces for private cars for use by the public for peak and non-peak hours in car parks within 500 m, i.e. about 15-minute walking distance (such as Harcourt Garden Car Park, Star Ferry Car Park ("SFCP"), City Hall Car Park, Cheung Kong Center Car Park and Citibank Plaza Car Park(1) ) during the period between the decommissioning of MRMCP and the reprovisioning of parking spaces. For motor cycle parking spaces, there will be a partial shortfall during peak hours(2).

(3) The traffic impact assessment conducted by the consultant mentioned above has based on a number of considerations in proposing the number of parking spaces to be reprovisioned for the MRMCP redevelopment project. These considerations included the supply and demand of parking spaces within about 300 m (i.e. about 10-minute walking distance) of the site after its redevelopment, growth of traffic flow and the carrying capacity of adjacent roads. Apart from providing parking spaces having regard to HKPSG to meet the parking demands arising from the development based on the gross floor areas of various uses, the development at MRMCP has to provide not less than 102 public parking spaces for private cars and 69 public parking spaces for motor cycles to compensate for the reduction in public parking spaces due to demolition of MRMCP.

(4) As advised by the Development Bureau, according to the Urban Design Study for the New Central Harbourfront completed in 2011, Site 3 will be used mainly for commercial development such as office and retail uses with provision of a landscaped pedestrian deck,

(1) Citibank Plaza Car Park is now known as Three Garden Road Car Park

(2) The average utilization rate of the five major car parks within about 500 m of MRMCP during peak hours is about 75%. 3688 LEGISLATIVE COUNCIL ― 15 February 2017

public open space and other supporting facilities. The planning brief for Site 3, which sets out the broad development parameters as well as the planning and design requirements of the site, was endorsed by the Metro Planning Committee of the Town Planning Board in December last year after consultation with the Harbourfront Commission and the Central and Western District Council. SFCP is located at the southern part of Site 3. According to the notional architectural scheme, to which reference was made during the drafting of the planning brief, SFCP will be developed as part of the at-grade public open space in Site 3. Some of the existing parking spaces will be suitably reprovisioned in the commercial development in Site 3, and SFCP will be demolished after the parking spaces are reprovisioned.

Specifically, taking into account the overall supply and future demand of parking spaces in Sheung Wan, Central and Admiralty, as well as the Government's long-term objective of improving the city's air quality, the planning brief required the provision of 325 public parking spaces when Site 3 is developed. In addition, around 520 ancillary parking spaces to serve office and retail uses within the site should also be provided in the future development of Site 3 having regard to the requirements of HKPSG. Generally speaking, those parking spaces provided in support of retail use could be open for public use. The Government is taking forward the relocation of the existing government facilities on Site 3 and the authorization of relevant roadworks. The site will be released to the market in due course upon completion of the relevant procedures.

As for the Rumsey Street Car Park, according to Development Bureau, the relevant departments will carry out technical assessments (including traffic impact assessment) on converting it into commercial use, and formulate development parameters of the project taking into account the results of the technical assessments and other relevant factors. The implementation programme for redevelopment of Rumsey Street Car Park is pending further assessments and hence not available. After the relevant assessments are completed, the Government will consult the Central and Western District Council and proceed with the necessary town planning procedure.

LEGISLATIVE COUNCIL ― 15 February 2017 3689

The Government understands that there has been an increase in demand for various types of parking spaces in different districts. Our prevailing policy in the provision of parking spaces is to accord priority to considering and meeting the parking demand of commercial vehicles. With priority accorded to the parking demand of commercial vehicles and a transport policy centred on public transport, the Government will still provide an appropriate number of parking spaces for private cars if the overall development permits, but such should not attract those passengers of public transport to opt for private cars instead. TD will commence a car parking review soon this year with priority accorded to addressing the parking demand and supply of commercial vehicles to come up with appropriate measures to address the parking need of commercial vehicles, including updating HKPSG. As no parking spaces for commercial vehicles are provided in SFCP and the Rumsey Street Car Park, the Government does not consider it necessary to put on hold the redevelopment plans for these two car parks.

Annex 1

Numbers of Parking Spaces for Various Classes of VehiclesNote in the Central and Western District over the Past Three Years (i.e. 2014 to 2016)

Private Coaches Light Medium/ Container Motor Year Car and and Goods Heavy Goods Others Total Vehicles Cycles Taxi Buses Vehicles Vehicles 2014 37 584 66 958 238 22 1 278 42 40 188 2015 37 729 76 1 022 192 22 1 301 42 40 384 2016 38 654 81 1 000 199 22 1 336 42 41 334

Note:

These parking spaces include public parking spaces provided by the Government, privately operated public parking spaces (including short-term tenancy carparks) and parking spaces solely for private use.

3690 LEGISLATIVE COUNCIL ― 15 February 2017

Annex 2

Average Utilization Rates in the Past Three Years During Day Period and Night Period of the Five Government Multi-Storey Car Parks in the Central and Western District managed by the Transport Department

Day Period (0800-2300) Night Period (2300-0800) Car Park Average Utilization Rate (%) Average Utilization Rate (%) 2014 2015 2016 2014 2015 2016 Star Ferry 52 69 63 9 14 13 City Hall 19 42 39 2 5 6 Rumsey Street 64 71 71 39 45 46 Murray Road 45 53 59 23 24 28 Kennedy Town 73 80 83 73 77 75

Facilitating the organization of bazaars and activities in public rental housing estates by community groups

14. DR KWOK KA-KI (in Chinese): President, some members of the public have relayed to me that since the Hong Kong Housing Authority ("HKHA") divested a large number of its shopping centres and markets to The Link Real Estate Investment Trust (now known as Link Real Estate Investment Trust ("Link REIT")) in 2005, the majority of the retail facilities in public rental housing ("PRH") estates have been monopolized by chain stores operated by large consortiums, resulting in inflated prices of commodities and a heavier burden on the livelihood of residents. Those members of the public have suggested that HKHA rent out the common areas within PRH estates to facilitate the organization of bazaars and activities by community groups, with a view to enabling residents to purchase daily necessities at relatively lower prices and promoting the development of community economy. In this connection, will the Government inform this Council:

(1) of the locations and areas of the existing common areas such as open spaces, community gardens and gardens within various PRH estates (set out in a table);

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(2) of the locations and areas of the existing common areas, that are solely owned by HKHA, within various PRH estates (set out in a table);

(3) whether the Housing Department ("HD") has studied which existing places in various PRH estates are suitable venues for activities organized by community groups; if so, of the names, addresses and areas of such places, as well as the number of activities approved by HD to be held at such places in the past three years and the details of such activities (set out in a table); if not, the reasons for that;

(4) whether HD has studied which existing places in various PRH estates are suitable venues for bazaars organized by community groups; if so, of the names, addresses and areas of such places; if not, the reasons for that; the respective numbers of applications for organizing bazaars at such places that were approved and rejected by HD in the past three years, as well as the number of applications currently under process;

(5) whether HD has established any cooperation platform to assist community groups in organizing bazaars and activities in PRH estates; if so, of the details; if not, the reasons for that;

(6) as HD has repeatedly indicated that due to restrictions imposed by lease conditions, activities involving commercial elements and cash transactions are not allowed in some PRH estates, of the vetting and approval criteria adopted by HD for assessing whether the relevant applications are in compliance with such requirements; whether HD will formulate special measures for bazaars where cash transactions are involved, with a view to facilitating the organization of bazaars by community groups; if so, of the details; if not, the reasons for that;

(7) given that applications for organizing bazaars in the common areas within PRH estates are subject to the approval or granting of licences by several government departments (including the Lands Department, the Leisure and Cultural Services Department as well 3692 LEGISLATIVE COUNCIL ― 15 February 2017

as the Food and Environmental Hygiene Department) other than HD, whether HD will collaborate with those government departments in setting up an inter-departmental group to look into ways to streamline the relevant vetting and approval procedure; if so, of the details; if not, the reasons for that; and

(8) as HKHA advised last year that it kept an open mind towards the proposal of organizing a bazaar at the amphitheatre of Tin Yiu Estate, but consent from Link REIT was required for the proposal because the common areas of Tin Yiu Estate were jointly owned by HKHA and Link REIT, of the progress of the related follow-up work?

SECRETARY FOR TRANSPORT AND HOUSING (in Chinese): President, having consulted the Food and Health Bureau, my consolidated reply to the questions raised by Dr KWOK Ka-ki is set out as follows:

The primary function of the Hong Kong Housing Authority ("HA") is to provide public rental housing to low income families which cannot afford private rental accommodation. HA makes reference to the Hong Kong Planning Standards and Guidelines ("HKPSG") and consults relevant government departments and organizations, District Councils and local communities in planning the provision of appropriate facilities in public housing estates.

In general, public housing estates are densely populated. Open spaces on the ground level are often used as sitting-out areas and facilities for residents' use in order to meet the planning requirements under the HKPSG, or as passage for residents, etc. Regarding proposals to change the use of these common spaces from serving the residents to other uses, HA has to study carefully the impact on individual estates, as well as the views of residents and other stakeholders. If some facilities in the estates concerned are owned by other parties, consent from other owners will also be required for any proposal involving the use of common spaces in the estates for other purposes.

The design of individual estate varies and the provision of sitting-out areas, greening areas, community gardens, parks, etc. also varies. The Housing LEGISLATIVE COUNCIL ― 15 February 2017 3693

Department ("HD") does not maintain statistics on the location or size of these common spaces. As regards public housing estates under HA which do not involve other owners, a list is provided at Annex for reference.

With a view to enhancing community building and sense of neighbourliness, as well as promoting a harmonious community, HD has all along been rendering support to Mutual Aid Committees, Estate Management Advisory Committees ("EMAC") and local organizations to hold various types of activities in public housing estates in collaboration with government departments and non-governmental organizations ("NGOs"). These activities include cultural programmes, educational promotion programmes and exhibitions, fund-raising activities such as Flag Day, etc. Since these activities are estate-led, aim at serving the residents and are held across the territories, HD does not maintain a centralized record of the details, nature and number of such activities.

In addition, HA has, since 2009, allocated funds for EMAC to partner with NGOs to carry out community building activities according to the needs and aspirations of individual housing estates. The scheme has been well received by EMAC, tenants and other stakeholders. On average, more than 400 partnering functions of various categories and themes are held annually. During the period from 2009 to January 2017, around 3 000 partnering functions including seminars, workshops, performances and carnivals were held. These functions cover a wide range of themes such as caring for the elderly, supporting services for different target groups, promotion of family cohesion and harmonious community, healthy living, environmental protection, etc.

Interested parties may submit applications to respective estate management offices, which will vet and approve applications in accordance with established procedures and requirements. Commercial or advertising activities involving on-the-spot receipt of cash or cheque etc., by the applicants are not allowed.

Regarding the setting up of bazaars, the Secretary for Food and Health already stated that the Government would keep an open mind towards proposals for setting up hawker bazaars and considered that it would be desirable to adopt a district-led approach. As long as the proponents can identify suitable sites for setting up such hawker bazaars and secure support from the local community and 3694 LEGISLATIVE COUNCIL ― 15 February 2017 the respective District Councils, the Government will provide assistance if food safety and environmental hygiene are not compromised and public passageways are not obstructed.

Government departments responsible for managing the sites or venues concerned (such as HD, Leisure and Cultural Services Department, Home Affairs Department and Lands Department) have established mechanism in handling proposals for organizing activities at the venues under their respective purviews. In general, upon receipt of a specific application, departments will consider whether the proposed activity is suitable to be held at the venue concerned, having regard to the nature of and the intended date for the proposed activity, as well as any other matters relating to the proposed activity and the venue. Other relevant departments (such as Fire Services Department, the Police and Transport Department) may also offer their views on issues of concern to them. Specific proposals on setting up of hawker bazaars have to be supported by the respective District Councils before being taken forward. Once the application is approved, the applicant has to follow all the rules and conditions in using the venue and pay the relevant fees.

The mechanism adopted by various departments have been established for years with a view to safeguarding public interest, such as proper use of the venue, public safety and order, and addressing the concerns of nearby residents on traffic, noise, environmental hygiene, etc. The application procedures and approving criteria are open and transparent. Furthermore, departments will review existing mechanism from time to time with a view to improving the efficiency and simplifying the approving procedures. On the premise of the above, the Government is willing to consider any specific proposals which are not against public interest.

HA will act in accordance with the Government's policy on the setting up of hawker bazaars. On receipt of specific proposals for setting up bazaars within public housing estates managed by HD, HD will examine the feasibility and the impact of the proposals which are supported by the local community and the respective District Councils in the light of the needs and circumstances of the estates concerned. As mentioned above, public housing estates are generally densely populated and open spaces on the ground level are often used for passage, sitting-out areas or common spaces for residents' use. Therefore, HD has not LEGISLATIVE COUNCIL ― 15 February 2017 3695 compiled a list of venues in public housing estates for the setting up of bazaars and it will depend on individual circumstances. Should there be enquiries from any organizations, HD is prepared to offer views and explain the Government's policy and relevant approving procedures.

HA has received proposals from community organizations in the past for the setting up of bazaars at various locations, and has handled them in accordance with the above mechanism. However, HA does not maintain statistics of such proposals. Take the proposal for the setting up of bazaars at Tung Chung as an example, the Islands District Council has formed a Working Group on Promotion of Bazaar Development to discuss and follow up on the proposal. Relevant government departments also participated in the Working Group.

In respect of the proposal for setting up a bazaar at the amphitheater of Tin Yiu Estate, HD will continue to liaise with the owners concerned. Meanwhile, HD is also studying whether the proposal is in compliance with the requirements in the land lease and Deed of Mutual Covenant, as well as seeking views from Lands Department. The Tin Shui Wai (South) Area Committee also discussed the proposal at its meeting on 13 February 2017. Upon the clarification on the feasibility in respect of the land lease, Deed of Mutual Covenant and technical matters, organizations concerned will submit their proposal to the Culture, Recreation, Community Service and Housing Committee of the Yuen Long District Council for discussion.

Annex

Public Housing Estates under the Hong Kong Housing Authority not Involving Other Owners

No Estate No Estate No Estate 1 Choi Fook Estate 31 Lei Yue Mun Estate 61 Tak Long Estate 2 Chai Wan Estate 32 Long Ching Estate 62 Tin Ching Estate 3 Chak On Estate 33 Long Shin Estate 63 Tin Heng Estate 4 Cheung Ching 34 Lung Tin Estate 64 Tin Yan Estate Estate 5 Cheung Kwai Estate 35 Lung Yat Estate 65 Tsui Lok Estate 3696 LEGISLATIVE COUNCIL ― 15 February 2017

No Estate No Estate No Estate 6 Cheung Lung Wai 36 Ma Tau Wai Estate 66 Tsz Hong Estate Estate 7 Cheung Sha Wan 37 Mei Tung Estate 67 Tung Wui Estate Estate 8 Cheung Shan Estate 38 Mei Tin Estate 68 Wah Fu (I) Estate 9 Ching Ho Estate 39 Model Housing 69 Wah Fu (II) Estate Estate 10 Choi Hung Estate 40 Nam Shan Estate 70 Wah Ha Estate 11 Choi Tak Estate 41 Nga Ning Court 71 Wan Hon Estate 12 Choi Wan (II) 42 Ngan Wan Estate 72 Wing Cheong Estate Estate 13 Choi Ying Estate 43 Lower Ngau Tau 73 Wo Lok Estate Kok Estate 14 Fu Shan Estate 44 On Tat Estate 74 Wu King Estate 15 Fuk Loi Estate 45 Pak Tin Estate 75 Yan On Estate 16 Fung Wo Estate 46 Ping Shek Estate 76 Yau Lai Estate 17 Hin Yiu Estate 47 Po Heung Estate 77 Yee Ming Estate 18 Hing Wah (II) 48 Sai Wan Estate 78 Yue Wan Estate Estate 19 Hoi Lai Estate 49 Sau Mau Ping South Estate 20 Hong Tung Estate 50 Shatin Pass Estate 21 Hung Fuk Estate 51 Shek Kip Mei Estate 22 Kai Ching Estate 52 Shek Mun Estate 23 Kam Peng Estate 53 Shek Pai Wan Estate 24 Kwai Chung Estate 54 Shek Yam East Estate 25 Kwai Luen Estate 55 Sheung Lok Estate 26 Kwai Shing West 56 Shin Ming Estate Estate 27 Lai King Estate 57 Shui Chuen O Estate 28 Lai Yiu Estate 58 Shui Pin Wai Estate 29 Lam Tin Estate 59 So Uk Estate 30 Lei Muk Shue 60 Tai Hang Tung Estate Estate

LEGISLATIVE COUNCIL ― 15 February 2017 3697

One-off Living Subsidy for the N have-nots households

15. MR LEUNG YIU-CHUNG (in Chinese): President, the Community Care Fund launched thrice the "One-off Living Subsidy for Low-income Households Not Living in Public Housing and Not Receiving Comprehensive Social Security Assistance" ("One-off Living Subsidy") programme in 2013, 2015 and 2016 respectively to relieve the financial pressure of such low-income households (commonly known as "N have-nots households"). However, the Fund has not launched the programme again this year. In this connection, will the Government inform this Council:

(1) of the number of households granted the One-off Living Subsidy in each of the years of 2013, 2015 and 2016, and set out in a tabulated breakdown by household size (one person, two persons, three persons and four persons or above) and District Council district; and

(2) as there are views that the Government should launch the One-off Living Subsidy programme again and even regularize the programme, with a view to relieving the financial pressure of the N have-nots households, whether the authorities will consider the proposal; if they will not, of the reasons for that; whether there are alternative measures?

SECRETARY FOR HOME AFFAIRS (in Chinese): President, the Community Care Fund ("CCF") first launched the One-off Living Subsidy for Low-income Households Not Living in Public Housing and Not Receiving Comprehensive Social Security Assistance ("CSSA") programme in December 2013 ("1st Launch"), with its second launch in January 2015 ("2nd Launch") and third launch in January 2016 ("3rd Launch"), to provide one-off living subsidy to the "N have-nots" who cannot benefit from the relief measures introduced by the Budget released in the respective years.

Our reply to the two parts of the question is as follows:

(1) A tabulated breakdown of the numbers of households granted the one-off living subsidy as at 31 December 2016 by household size and District Council district is as follows:

3698 LEGISLATIVE COUNCIL ― 15 February 2017

1st Launch 2nd Launch 3rd Launch Household size Number of households granted the subsidy 1 person 14 982 17 889 18 362 2 persons 13 020 15 494 16 621 3 persons 13 754 15 611 16 552 4 persons or above 10 342 12 628 14 356 Total: 52 098 61 622 65 891

District Council 1st Launch 2nd Launch 3rd Launch district Number of households granted the subsidy Central and Western 1 382 1 570 1 567 Eastern 2 305 2 664 2 893 Southern 482 547 581 Wan Chai 909 1 024 1 077 Kowloon City 4 813 5 355 5 529 Kwun Tong 2 932 3 491 3 862 Sham Shui Po 10 442 11 260 11 665 Wong Tai Sin 1 094 1 316 1 475 Yau Tsim Mong 8 141 9 308 9 803 Islands 668 782 829 Kwai Tsing 1 719 2 050 2 145 Sai Kung 403 531 608 Sha Tin 769 947 1 109 Tai Po 1 562 2 055 2 331 North 4 171 5 480 5 850 Tsuen Wan 3 799 4 300 4 739 Tuen Mun 2 020 2 705 2 933 Yuen Long 4 487 6 237 6 895 Total: 52 098 61 622 65 891

(2) The One-off Living Subsidy for Low-income Households Not Living in Public Housing and Not Receiving CSSA programme ("the Programme"), launched by the Commission on Poverty in the light of the short-term relief measures introduced by the Budget released in the financial year of the launch, provides one-off assistance to the so-called "N have-nots" who cannot benefit from such relief measures. Therefore, the consideration of incorporating programmes into the Government's regular programmes is not LEGISLATIVE COUNCIL ― 15 February 2017 3699

applicable to this Programme. As fewer short-term relief measures were announced in the 2016-2017 Budget, for example, no longer paying rent for tenants living in public rental housing, there is insufficient justification for CCF to relaunch the Programme to provide cash subsidy to low-income "N have-nots" not living in public housing and not receiving CSSA.

On the other hand, recurrent cash-based programmes, such as the Work Incentive Transport Subsidy launched in October 2011 and the Low-income Working Family Allowance launched in May 2016, aim to alleviate, on a continuing basis, the financial pressure faced by low-income working persons and their families. CCF will continue to take into account views of the public and stakeholders in launching other programmes to assist the underprivileged and grass-roots families.

Protecting the rights and interests of foreign domestic helpers and regulating intermediaries for foreign domestic helpers

16. MR ANDREW WAN (in Chinese): President, regarding the protection of the labour rights and interests of foreign domestic helpers ("FDHs") and the regulation of intermediaries for FDHs ("intermediaries"), will the Government inform this Council:

(1) of the number of FDHs granted employment visas in the past two years to work in Hong Kong, with a breakdown by their nationality;

(2) of the number of complaints or requests for assistance received by the authorities in the past two years concerning FDHs being subjected to violence by their employers or family members of their employers; among such cases, of the respective numbers of those which were (i) initiated by the FDHs, (ii) referred by intermediaries, and (iii) referred by other persons;

(3) of the number of cases in which the authorities instituted in the past two years prosecutions against employers of FDHs or family members of such employers for allegedly subjecting their FDHs to violence, with a breakdown by the relationship between the 3700 LEGISLATIVE COUNCIL ― 15 February 2017

defendants and the FDHs in such cases; the penalties generally imposed by the court on the convicted persons;

(4) of the number of complaints or requests for assistance received by the authorities in the past three years concerning FDHs who had their wages deducted or who were underpaid by their employers; the number of cases in which the employers were convicted as a result, and the penalties generally imposed by the court on the convicted persons;

(5) of the current number of licensed intermediaries across the territory; last year, the respective numbers of regular and surprise inspections of intermediaries carried out by the authorities, as well as the respective numbers of cases in which investigations were conducted and prosecutions were instituted in response to complaints; the penalties generally imposed last year by the court on the convicted intermediaries or their persons in charge; the number of cases in which intermediaries were convicted last year for overcharging of intermediary fees from FDHs;

(6) given that intermediaries are currently liable to a maximum fine of $50,000 for unlicensed operation or overcharging of commission from FDHs, whether the authorities will consider increasing the relevant penalties to enhance the deterrent effect; and

(7) whether the authorities have examined ways to enhance publicity on the Code of Practice for Employment Agencies promulgated on the 13th of last month, so as to raise FDHs' awareness of their own labour rights and interests?

SECRETARY FOR LABOUR AND WELFARE (in Chinese): President, having consulted the Security Bureau, I provide a consolidated reply to the question raised by Mr Andrew WAN as follows:

(1) According to statistics provided by the Immigration Department, the numbers of employment visas approved for foreign domestic helpers ("FDHs") with breakdown by nationality in 2015 and 2016 are at Annex A.

LEGISLATIVE COUNCIL ― 15 February 2017 3701

(2) and (3)

In 2015 and 2016, the Police respectively received 29 and 19 reports of wounding and serious assault cases involving FDHs being attacked by their employers. The Police also received respectively in these two years 38 and 59 reports of wounding and serious assault cases involving FDHs being attacked by people other than their employers. The Police do not have other statistical breakdown as mentioned in the question.

(4) The Labour Department ("LD") has been publicizing through various channels, including broadcasting radio announcement in public interest ("API"), staging information kiosks to screen publicity videos and producing pamphlets for wide distribution, to ensure FDHs and employers are fully aware that unlawful deduction and underpayment of wages is a serious offence. LD has also been participating in the welcome programmes organized by the relevant Consulates-Generals for newly-arrived FDHs to disseminate the above message with a view to enhancing their awareness of employment rights and channels of making complaints.

Under the Employment Ordinance ("EO") (Cap. 57), an employer commits an offence if he/she wilfully and without reasonable excuse fails to pay wages to an employee on time, and shall be liable, upon conviction, to a maximum fine of $350,000 and imprisonment for three years. FDHs should file a complaint with LD if they feel aggrieved. LD will take follow-up actions promptly upon receipt of complaints. If there is sufficient evidence and the relevant FDH is willing to act as prosecution witness, prosecution will be taken out against the suspected law-defying employer. In the past three years, there were employers sentenced to imprisonment upon conviction of underpayment of wages. The numbers of claims by FDHs for deducted wages or underpayment of wages, FDH employers being prosecuted and convicted from 2014 to 2016 are at Annex B.

(5) to (7)

According to Part XII of EO and the Employment Agency Regulations ("EAR") (Cap. 57A), anyone who wishes to operate an 3702 LEGISLATIVE COUNCIL ― 15 February 2017

employment agency ("EA") (including those providing placement service for FDHs ("FDH EA")) has to obtain a licence issued by the Commissioner for Labour ("C for L") in advance. The aforementioned laws also stipulate that for each job placement, EAs are not allowed to receive from job-seekers (irrespective of whether they are local job-seekers or FDHs) commission of an amount exceeding 10% of the job-seeker's first month's wages upon successful placement. EAs operate without a licence or overcharge job-seekers would commit an offence and be liable to a maximum fine of $50,000 upon conviction.

As of end 2016, there were 1 405 licensed FDH EAs in Hong Kong. LD regulates EAs through conducting inspections, investigating complaints and instituting prosecutions. It takes stringent enforcement actions against EAs which have violated EO and EAR. Upon receipt of complaints, LD will conduct investigations; prosecution will be instituted if there is sufficient evidence and the FDH concerned is willing to act as prosecution witness. LD has since 2014 stepped up inspections to EAs by increasing the annual inspection target from 1 300 to 1 800 (an increase of 38%). The numbers of inspections conducted, complaints investigated and convictions secured by LD, and the related average fine imposed against EAs in 2016 are set out in Annex C.

To promote professionalism and quality service in the EA industry, LD promulgated the Code of Practice for Employment Agencies ("the Code") on 13 January 2017. The Code highlights the salient legislative requirements and sets out the minimum standards which C for L expects of EA licensees, some of which are particularly relevant to EAs providing placement service for FDHs. These include, for example, maintaining transparency in business operations, drawing up service agreements with job-seekers and with employers, providing payment receipts, promoting job-seekers' and employers' awareness of their rights and obligations (including provision of sample wage receipt to facilitate FDHs and their employers for record-keeping or perusal as and when necessary) and avoiding involvement in financial affairs of job-seekers. EA operators must comply with the statutory requirements and standards set out in the Code, as this is one of the important factors that C for L LEGISLATIVE COUNCIL ― 15 February 2017 3703

will take into account when assessing if the licensee is a fit and proper person to operate an EA under section 53(1)(c)(v) of EO.

Upon the promulgation of the Code, LD has issued letters to all EAs to advise them to comply with the statutory requirements and standards as listed in the Code. To enhance public awareness of the Code, LD has also put in place a series of publicity and promotional efforts, including issuing press release, broadcasting radio API, producing posters and web banners, etc. At the same time, LD has launched the Employment Agencies Portal ("the EA Portal") , which is a dedicated website to provide the public with information related to regulations of EAs in Hong Kong (including the Code) and a built-in search function so that members of the public can easily check if an EA has a valid licence.

LD plans to introduce an amendment bill in the second quarter of this year to provide a legal basis for the Code and to increase the maximum penalty on EAs operating without a licence or overcharging job-seekers to $350,000 and imprisonment for three years to attain a greater deterrent effect.

Annex A

Number of employment visas approved for FDHs in 2015 and 2016

Country/Region 2015 2016 The Philippines 51 905 47 174 Indonesia 43 213 45 664 India 1 300 1 362 Thailand 574 602 Bangladesh 378 214 Sri Lanka 424 435 Myanmar 23 26 Others(1) 119 67 Total 97 936 95 544

Note:

(1) Other countries/regions include Nepal, Pakistan and Malaysia.

3704 LEGISLATIVE COUNCIL ― 15 February 2017

Annex B

Numbers of claims by FDHs for deducted wages or underpayment of wages, FDH employers involved and convictions secured by LD from 2014 to 2016

2014 2015 2016 Number of FDHs in Hong Kong 330 650 340 380 351 513 (at year-end) Number of claims by FDHs for deducted wages or 308 211 214 underpayment of wages(2) Number of FDH employers involved (number of 3(47) 2(9) 3(7) summonses) Number of convictions (number (3) 2(23 ) 2 (9) 2(2) of summonses) Maximum penalty imposed two months' imprisonment, four months' fine of $5,000 suspended for imprisonment two years

Notes:

(2) Employment disputes or claims are sometimes caused by employers or employees not understanding the requirements of the law or having different interpretations over the terms of the employment contract or how wages are to be calculated. Generally, in over 70% of the employment disputes and claims, employers and employees concerned are able to reach settlement after understanding the relevant requirements of the law and the terms of the employment contract through the conciliation of LD. For claims where no settlement could be reached, LD would, at the request of the claimants, refer the claims to the Minor Employment Claims Adjudication Board or the Labour Tribunal for adjudication.

(3) Of the 23 summonses of conviction, 22 of them were related to the same case involving continuous underpayment and non-payment of wages.

Annex C

Number of inspections conducted, complaints investigated and convictions secured by LD, and the related average fine imposed against EAs in 2016

Number of inspections to EAs conducted (including regular and 1 816 surprise inspections) Number of complaints against EAs for overcharging FDHs received 529(4) and investigated LEGISLATIVE COUNCIL ― 15 February 2017 3705

Number of convicted EAs (of which, the number of cases involving 8(5) FDH EAs overcharging commission) Average level of fine per convicted summons involving FDH EAs $10,500 overcharging commission

Note:

(4) Amongst the 529 complaints, 326 of them are complaints against the same EA. LD has taken out prosecution against the EA after investigation and legal proceeding is in progress.

Financial limit of claims lodged with the Small Claims Tribunal

17. MR HOLDEN CHOW (in Chinese): President, the Small Claims Tribunal ("the Tribunal") was established to provide members of the public with a simple and inexpensive means to deal with monetary claims arising from contracts or torts, involving amounts not exceeding $50,000 ("financial limit of claims"). Common types of claims include those relating to debts, service charges, damage to property, goods sold as well as consumer claims. Some members of the public have pointed out that as the amounts involved in civil disputes have increased substantially since the financial limit of claims was set at $50,000 in 1999, the financial limit of claims should be raised. They have also pointed out that, for the years from 2013 to 2015, while the Judiciary had set a target of 60 days for the average waiting time for "Small Claims Tribunal―from filing of a case to first hearing", the actual average waiting time was 36 days; these data show that the Tribunal, with its existing resources, is capable of handling additional claim cases due to an upward adjustment of the financial limit of claims. In this connection, will the Government inform this Council whether it will consider setting a higher financial limit of claims, say $100,000; if it will, whether the Government will allocate more resources, when necessary, to ensure that the efficiency of the Tribunal in handling claims will not be reduced owing to an increase in the number of cases being handled?

CHIEF SECRETARY FOR ADMINISTRATION (in Chinese): President, the Government has consulted the Judiciary on the questions raised. According to the information provided by the Judiciary, the Government's reply is as follows:

At present, the Small Claims Tribunal ("SCT") under the Judiciary deals with monetary claims not exceeding $50,000. The SCT is a tribunal which 3706 LEGISLATIVE COUNCIL ― 15 February 2017 adopts a more informal approach to proceedings and its rules and procedures are less strict than those in most other courts and tribunals, and no legal representation is allowed therein. It provides a relatively quick and less costly avenue for litigants to resolve civil disputes involving lower claim amounts.

In 2015-2016, the Judiciary has started to conduct a review of the civil jurisdictional limit of the District Court and that of SCT. As far as the jurisdictional limit of SCT is concerned, the Government understands that the Judiciary intends to introduce an upward adjustment to the limit with a view to further enhancing access to justice by allowing SCT to process more cases with lower claim amounts which may otherwise not be pursued by parties if they have to lodge such cases at the District Court where costs of litigation are higher.

To this end, the Government understands that the Judiciary conducted a public consultation exercise on the review of the jurisdictional limits of both the District Court and SCT in 2015-2016. Having conducted some sensitivity and impact analysis on the possible increase in caseload at the both District Court and SCT following any proposed increases of their civil jurisdictional limits, and taking into account changes in some economic indicators in recent years, the Judiciary has put forward specific proposals in consulting the stakeholders, including the legal professional bodies, in the jurisdictional increases. As far as the jurisdictional limit of SCT is concerned, the Judiciary is proposing to increase its jurisdictional limit from $50,000 to $75,000. Such a proposed increase would have an impact on the caseload and workload of SCT. This proposal has received general support from all stakeholders in the public consultation exercise.

Based on the comments received from the stakeholders during the consultation conducted earlier, the Government understands that the Judiciary is now finalizing the proposals with regard to the proposed increase of the civil jurisdictional limit of SCT (and also that of the District Court) and intends to consult the Panel on Administration of Justice and Legal Services of the Legislative Council on the final proposals in April 2017.

The Government understands that in the course of reviewing the civil jurisdictional limit of SCT (and that of the District Court as well), the Judiciary has also conducted a detailed assessment on the resource implications arising from the proposed increases, in particular the impact on the requirements of additional judicial and non-judicial manpower and court facilities. The Judiciary considers that it is essential to have the necessary additional manpower LEGISLATIVE COUNCIL ― 15 February 2017 3707 and court facilities available and ready at SCT (and also at the District Court) before the proposed increases in the jurisdictional limits are implemented.

As far as SCT is concerned:

(a) on the additional requirements for judicial and non-judicial manpower, the Judiciary has put forward its requests to the Government under the established budgetary arrangements. The Government will continue to adopt a most constructive and facilitating approach in considering the resource requests from the Judiciary. As stated before, the Government will ensure that the Judiciary will be provided with adequate resources to support the efficient and effective operation of the court system; and

(b) on court facilities, the Government understands that following the relocation of SCT from Wanchai Tower to the new West Kowloon Law Courts Building ("WKLCB") in September 2016, the number of court rooms available for use by SCT has increased from 9 to 12. According to the Judiciary, this will enable SCT to handle additional cases following the proposed increase of its civil jurisdictional limits after implementation. To enhance the services to the litigants, the Judiciary has also set up a new Information Centre at WKLCB to provide enquiry services on rules and procedures of SCT, thereby facilitating the smooth conduct of the proceedings at SCT.

Proposals on the development of convention and exhibition venues in Wan Chai

18. MS TANYA CHAN (in Chinese): President, it was projected in 2015 in a consultancy study commissioned by the Government that by 2028, there would be a shortfall of 130 000 square metres of convention and exhibition venues in Hong Kong at peak periods. The consultant recommended 15 measures for further developing the convention and exhibition industries, maximizing venue utilization and increasing venue capacity. The Secretary for Commerce and Economic Development stated on the 25th of last month that the Government had invited the Hong Kong Trade Development Council ("TDC") to work on the preliminary design of one of the recommended measures (i.e. building a convention centre above the Exhibition Station of the Sha Tin to Central Link). Moreover, the Chief Executive proposed in the Policy Address delivered last month that the Wan 3708 LEGISLATIVE COUNCIL ― 15 February 2017

Chai Sports Ground ("WCSG") would be demolished for comprehensive development ("comprehensive development plan") in 2019 at the earliest, and TDC would conduct a feasibility study on this proposal. It is learnt that, across the territory, only WCSG and the Tseung Kwan O Sports Ground ("TKOSG") meet the venue requirements for holding track and field events of international standards at present, and it is anticipated that the new sports ground to be built in the Kai Tak Sports Park will not be commissioned until 2022. Therefore, some members of the sports community have reservations about the proposed demolition of WCSG. In this connection, will the Government inform this Council:

(1) of the latest progress of the various measures recommended in the consultancy study report (set out in the table below); whether the Government has regularly reviewed the implementation and effectiveness of the various measures;

Recommended Latest measures progress Measures for further developing the 1 convention and exhibition industries and 2 maximizing venue utilization in the short … to medium term 11 (to be considered/implemented/achieved in the coming 10 years) Measures for increasing venue capacity 12 in the medium to long term … (to be considered/implemented/achieved 15 in the coming 15 years)

(2) whether the relevant feasibility study, overall proposal, environmental and traffic impact assessment studies had been completed before the Government invited TDC to work on the preliminary design for building the convention centre; if not, why the Government made the invitation before the completion of the studies; if so, of the organizations that conducted the studies and the expenditure involved, as well as whether the relevant reports can be made public; whether the Government's commissioning of TDC to take charge of the task has gone through an open tendering process; if so, of the details of the tendering work; if not, of the justifications for that;

LEGISLATIVE COUNCIL ― 15 February 2017 3709

(3) whether the Government's commissioning of TDC to conduct a feasibility study on the comprehensive development plan has gone through an open tendering process; if so, of the details of the tendering work; if not, the justifications for that;

(4) of the respective utilization rates at peak and non-peak seasons as well as the annual overall utilization rates of WCSG in each of the past 10 years and of TKOSG in each year since its opening in 2009;

(5) whether the new sports ground to be built in the Kai Tak Sports Park will meet the venue requirements for holding track and field events of international standards; given that the new sports ground will only be commissioned a few years after the demolition of WCSG, whether the Government has assessed, during the transitional period, if TKOSG alone can satisfy the demand for venues for holding track and field events of international standards; if it has assessed and the outcome is in the negative, whether the Government has any remedial measures;

(6) as the Government has indicated that it will consider redeveloping the Hong Kong Stadium into a sports ground, whether the Government has formulated an implementation timetable; if so, of the details; if not, why the Government has proposed the demolition of WCSG before it has secured alternative venues; and

(7) whether the Government will consult the sports sector, the academia and the public on its proposals on the demolition of WCSG and the redevelopment of the Hong Kong Stadium; if so, of the details and timetable; whether the Government will postpone or shelve the comprehensive development plan under the circumstances that the sports sector and the academia do not support the demolition of WCSG; if it will not, of the reasons for that?

SECRETARY FOR COMMERCE AND ECONOMIC DEVELOPMENT (in Chinese): President, after consulting the Home Affairs Bureau and Development Bureau, my consolidated reply to the seven parts of the question is as follows:

(1) The Government adopted the recommendation of the Working Group on Convention and Exhibition Industries and Tourism under 3710 LEGISLATIVE COUNCIL ― 15 February 2017

the Economic Development Commission in 2014, and hence commissioned a consultancy study to assess the demand for convention and exhibition ("C&E") facilities in Hong Kong for the 15-year period between 2014 and 2028. The result indicates that by 2028 there will be a shortfall of about 130 000 sq m of C&E space in Hong Kong at peak periods. During the discussion between the consultant and stakeholders, the latter made 15 suggestions on how to meet the future demand on C&E facilities. The consultant, having regard to four major considerations, i.e. meeting unmet demand, whether the suggestions could be implemented, whether the Government could involve, and key risks and constraints, and after conducting a quantitative economic impact assessment, put forward to the Government recommendations for the short, medium and long terms that it considered feasible. The consultant's recommendations and the latest progress are tabulated as follows:

Consultant's Recommendations Latest Progress Proposed the Government to The Government has all along create environment to foster new been promoting the development event launches and proactively of MICE industries through target conventions and new making good use of the C&E exhibitions to be held especially facilities in Hong Kong, during off-peak seasons in the including: coming years to maximize venue utilization and to diversify (a) the "Meetings and business. Besides, supporting Exhibitions Hong Kong" facilities (e.g. hotels and Office under the Hong Kong transport) should also be Tourism Board ("HKTB") is developed especially on Lantau committed to promoting Island to help improve the MICE tourism, and has been attractiveness of Hong Kong as a actively assisting meetings, incentive travels, organizations intending to convention and exhibition hold international ("MICE") destination. conferences and exhibitions in Hong Kong in their search for suitable venues, and providing them with reference information of suitable locations;

LEGISLATIVE COUNCIL ― 15 February 2017 3711

Consultant's Recommendations Latest Progress (b) HKTB also works closely with the Hong Kong Trade Development Council ("TDC"), Hong Kong Exhibition and Convention Industry Association and the major exhibition venues (including the Hong Kong Convention and Exhibition Centre ("HKCEC") and AsiaWorld-Expo ("AWE")) to conduct joint market promotion activities in various target cities to attract different organizations to hold events in Hong Kong;

(c) since 2014-2015, the Government has allocated an annual provision of $15 million to HKTB for three consecutive years to provide more attractive and targeted supporting services and hospitality offers for organizers and participants of MICE events of different scales and types. To continue supporting HKTB's promotion work on this front, starting from 2017-2018 onwards, the Government will regularize the aforementioned annual provision of $15 million;

(d) HKTB launched a scheme in 2016 to attract more small to medium-sized MICE events to Hong Kong; and

3712 LEGISLATIVE COUNCIL ― 15 February 2017

Consultant's Recommendations Latest Progress (e) the Government has all along been encouraging TDC and other exhibition organizers to adopt the "one show, two venues" or "two shows, two venues" approach in holding exhibitions, so as to make good use of the C&E facilities in Hong Kong. To successfully organize exhibitions under different approaches, there should be close coordination between the venue operators and exhibition organizers. Exhibitors and buyers also need time to adapt. In the medium term, proposed The recommendation has been that a dedicated convention adopted. The Chief Executive centre is recommended to be announced in the 2015 Policy built above the Exhibition Address that a convention centre Station in Wan Chai North to would be constructed above the allow the emerging convention Exhibition Station of the sector to realize its high growth Shatin-to-Central Link ("SCL") potential and to address strong upon the latter's completion in competition from neighbouring around 2020. At the cities. The dedicated Government's invitation, TDC is convention centre will create working on the design work. operational synergies with HKCEC. In the longer run, the To maintain the competitiveness Government should explore of the C&E industry, the further provision/ expansion of Government has all along been convention and exhibition space exploring different options to on Lantau Island and/or in other increase the floor area of C&E locations (e.g. an integrated venues. Apart from the development of hotels and convention centre to be built convention and exhibition above the Exhibition Station of facilities in Kai Tak area), as SCL, the West Kowloon Culture long as the necessary District ("WKCD") Authority is LEGISLATIVE COUNCIL ― 15 February 2017 3713

Consultant's Recommendations Latest Progress surrounding supporting facilities also considering, as a (e.g. accommodation, dining, preliminary idea, the entertainment and transport) are development of a medium-sized sufficiently provided. multi-purpose venue for exhibition, convention and performance purposes in the western part of the WKCD through private sector financing. As regards AWE on the airport island, land has also been reserved for its expansion.

However, we estimate that even with the topside development above the Exhibition Station of SCL, AWE expansion and the C&E facilities in the WKCD, the demand for C&E venues in Hong Kong at peak periods in 2028 can still not be satisfied. Therefore, the Government has to continue to explore other sites for constructing or expanding C&E facilities. In view of the overall development plan of the Home Affairs Bureau for sports facilities in Hong Kong, the Government considers that the feasibility of comprehensive development at the Wan Consultant's Recommendations Latest Progress Chai Sports Ground ("WCSG") site can be examined. The proposal is an initial idea and the Government has not finalized its plan. The Government will consider further when the outcome of the feasibility study is available.

3714 LEGISLATIVE COUNCIL ― 15 February 2017

(2) In 2012, the Planning Department ("PlanD") commissioned a consultant to study the architectural feasibility of development above the Exhibition Station of SCL. The consultancy fee involved was HK$1.4 million. The purpose of the study is to confirm the initial feasibility of developing convention facilities above the Exhibition Station of SCL, and to amend the relevant Outline Zoning Plan ("OZP") to allow the construction of convention centre on the topside. Based on the study result, PlanD submitted the proposed amendments to the Wan Chai North OZP to the Town Planning Board ("TPB") in May 2013 to rezone the site of the Exhibition Station of the SCL as "Comprehensive Development Area". The topside is proposed primarily for the provision of convention and meeting facilities and other commercial related uses, together with railway station facilities, a public transport interchange and other supporting facilities. The revised draft OZP was made available for public inspection in May 2013, and it was approved by the Chief Executive in Council in February 2014. The Planning Brief for the concerned "Comprehensive Development Area" was also approved by TPB in July 2014.

In response to the result of the consultancy study as mentioned in part (1) of the reply above, the Chief Executive announced in the 2015 Policy Address that a convention centre would be constructed above the Exhibition Station of SCL upon the latter's completion in around 2020. In view of the Consultant's advice that by 2028 there will be a shortfall of about 130 000 sq m of C&E space in Hong Kong at peak periods, we considered that there is a need to review the scale and design of the topside development with a view to increasing the floor area of the facilities in the development. In this connection, the Government has invited TDC to undertake the design work of the convention centre above the Exhibition Station in 2015.

TDC is a statutory and non-profit-making organization, with the statutory function to promote, assist and develop Hong Kong's trade with other places. Organizing international conventions and exhibitions is one of the effective ways to promote and develop trade. Conventions and exhibitions organized by TDC have been LEGISLATIVE COUNCIL ― 15 February 2017 3715

developed into major C&E activities in the region. Its professional knowledge and experience in promoting the development of services industry are very valuable to planning for new C&E facilities. Therefore, the Government has invited TDC to undertake the relevant design work.

(3) As mentioned in part (2) above, TDC is a statutory and non-profit-making organization. Its professional knowledge in organizing conventions and exhibitions and experience in promoting the development of the services industry are very valuable to planning for new C&E facilities. Therefore, the Government has invited TDC to undertake the feasibility study of the comprehensive development of WCSG.

(4) The Tseung Kwan O Sports Ground ("TKOSG") provides venue to the Hong Kong Amateur Athletic Association ("HKAAA") for training Hong Kong representative teams. WCSG is the designated training venue of HKAAA. The athletics facilities of the two sports grounds conform to Classes I and II under the List of Certified Athletics Facilities by International Association of Athletics Federations ("IAAF") respectively and are suitable for local or regional athletics competitions organized by HKAAA.

TKOSG has been opened for public use since January 2010 after serving as the venue for athletics events in the 2009 East Asian Games. Apart from being hired by "national sports associations" ("NSAs"), schools or local organizations for athletics meets, training and competitions, it is also used by members of the public for jogging. The average usage rate of TKOSG was 95% in 2010 and its usage rate reached 100% between 2011 and 2016.

Opened in 1979, the facilities of WCSG are mainly for use by schools, NSAs and organizations for athletics meets, competitions and training activities and are not open for jogging by the public. The overall average usage rate of WCSG was 90% in the past 10 years (2007-2016).

3716 LEGISLATIVE COUNCIL ― 15 February 2017

The breakdown of the usage rates of TKOSG and WCSG by year is at Annex.

(5) The public sports ground at the proposed Kai Tak Sports Park ("KTSP") with a seating capacity of 5 000 will provide athletics facilities meeting international standards, which include a standard 400-metre athletics track, a warm-up track and facilities for field events. It will be suitable for local and regional athletics events and training. Being the only sports ground conforming to Class I under the List of Certified Athletics Facilities by IAAF, TKOSG is the usual venue for holding international athletics events staged in Hong Kong.

(6) and (7)

Subject to the funding approval of the Finance Committee of the Legislative Council within this legislative year, the construction works of the KTSP is expected to complete in 2022. As the Main Stadium of the KTSP will have a seating capacity of 50 000, we need to consider the future role of the Hong Kong Stadium. We shall conduct a technical feasibility study on its redevelopment, including changing it to a public sports ground equipped with athletics track and reducing the existing seating capacity. We will complete the technical feasibility study the coming five years (i.e. before 2022) and consult the concerned district council(s), sports sector and other stakeholders.

Regarding the proposal to use WCSG for comprehensive development as announced in the Policy Address, TDC will conduct a feasibility study. We are aware of the sports sector's concern about the proposal, and will continue to listen to the views of different sectors and carry out consultation. The Government will take into account findings of the feasibility study and views collected in contemplating the next step ahead.

LEGISLATIVE COUNCIL ― 15 February 2017 3717

Annex

Usage rate of Tseung Kwan O Sports Ground (TKOSG) and Wan Chai Sports Ground (WCSG) 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

(%) (%) (%) (%) (%) (%) (%) (%) (%) (%) (A) Peak hours TKOSG* - - - 95 100 100 100 100 100 100 WCSG 92 97 96 93 100 100 95 99 100 96 (B) Non-peak hours TKOSG* - - - 94 100 100 100 100 100 100 WCSG 69 73 69 83 97 98 80 94 95 83 (C) Overall TKOSG* - - - 95 100 100 100 100 100 100 WCSG 80 84 81 88 99 99 87 96 98 89

Notes:

* TKOSG has been opened for public use since January 2010

(A) Peak hours: Monday to Friday: 6:00 pm or thereafter Saturday, Sunday and public holiday: whole day

(B) Non-peak hours: Monday to Friday: before 6:00 pm (except public holiday)

Provision of public markets in new towns

19. DR FERNANDO CHEUNG (in Chinese): President, at the meeting of the Panel on Food Safety and Environmental Hygiene of this Council held on the 24th of last month, the Secretary for Food and Health ("SFH") indicated that the Government had initially identified suitable sites in the Tung Chung New Town Extension Area and Hung Shui Kiu New Development Area ("NDA") for building public markets. Some community groups have pointed out that quite a number of sites are available in Tung Chung and Tin Shui Wai for building public markets, and as the population in Hung Shui Kiu NDA will exceed 200 000, coupled with the fact that the existing population in Tin Shui Wai has already reached 300 000, building the aforesaid public market at Hung Shui Kiu NDA alone cannot satisfy the demand of Yuen Long residents for shopping at public markets. In this connection, will the Government inform this Council:

3718 LEGISLATIVE COUNCIL ― 15 February 2017

(1) whether it is feasible to build public markets at the following locations (if it is not feasible, of the reasons for that):

Tung Chung:

(i) Tat Tung Road Garden adjacent to the Tung Chung Skyrail Terminal,

(ii) bus servicing site of Citybus Limited at Chung Wai Street,

(iii) Hau Wong Temple football pitch,

(iv) open area at the roundabout adjacent to Tak Yat House, Yat Tung Estate (near the nullah),

(v) Yat Tung Estate Carpark No. 3,

Tin Shui Wai:

(vi) the existing site of Tin Sau Bazaar and part of the Tin Sau Road Park,

(vii) Tin Sau Road Community Garden,

(viii) The Hong Kong Girl Guides Association Tin Shui Wai Pansy Ho Activity Centre adjacent to Tin Chak Estate,

(ix) additional floors above the proposed swimming pool facilities in Area 107, Tin Shui Wai,

(x) depot of the Kowloon Motor Bus Company (1933) Limited adjacent to Tin Tsz Estate,

(xi) Central Park Towers public carpark,

(xii) multi-purpose pitch of the Hong Kong Rugby Union in Area 108, and

(xiii) vehicle depot of the Food and Environmental Hygiene Department ("FEHD");

LEGISLATIVE COUNCIL ― 15 February 2017 3719

(2) as SFH indicated at the aforesaid meeting that the authorities had tried to look for suitable sites in Tin Shui Wai to build public markets but to no avail, and had therefore chosen Hung Shui Kiu NDA for building a public market, of the exact locations of the sites that had been considered by the authorities and the reasons why such sites had been found unsuitable for building public markets;

(3) given that the markets in several new towns (such as Ma On Shan and Tseung Kwan O) and large housing estates (such as On Tat Estate and On Tai Estate at Anderson Road, as well as Yan Tin Estate in Tuen Mun) are operated by Link Real Estate Investment Trust, the Hong Kong Housing Authority or private developers, whether the authorities will undertake to identify sites in those new towns and housing estates for building FEHD-managed public markets so as to increase the competition among markets, with a view to alleviating the problem of soaring commodity prices; if they will not, of the authorities' measures for assisting residents in buying food and daily commodities at affordable prices; and

(4) whether the authorities will consider including afresh the population-based planning standard for public markets into the Hong Kong Planning Standards and Guidelines for future reference in planning new towns; if they will not, of the authorities' measures for meeting residents' demand for shopping at public markets?

SECRETARY FOR FOOD AND HEALTH (in Chinese): President, as announced in the Policy Address in January 2017, the Government will build sizable public markets in new development areas ("NDAs") and has initially identified suitable sites in the Tung Chung New Town Extension Area and Hung Shui Kiu NDA. The Government will continue to identify suitable sites in other NDAs. We hope that the two new strategically located public markets can be developed into large-scale markets in their respective regions. In other words, the markets are intended to serve not only Tung Chung New Town Extension Area and Hung Shui Kiu NDA but also the whole Tung Chung and Tin Shui Wai areas.

3720 LEGISLATIVE COUNCIL ― 15 February 2017

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

(1) to (3)

In considering the provision of a new public market, the Government will take into account various factors, including the population in the area, demographic mix, community needs, the availability of public and private market facilities and the number of fresh provision retail outlets in the vicinity, etc. Moreover, we have to duly assess the demand and cost effectiveness in order to ensure that public resources are put to proper use.

For Tung Chung New Town, there are at present two wet markets in Yat Tung Estate and Fu Tung Estate respectively, and other fresh provision retail outlets. The Hong Kong Housing Authority ("HA") will further provide two new wet markets within public housing developments in Areas 56 and 39 of Tung Chung respectively, which are scheduled for completion by 2017 and 2018 respectively.

Currently, there are five wet markets in Tin Shui Wai, which are located in Tin Shing Court, Tin Shui Estate, Tin Chak Estate, Chung Fu Shopping Centre and Tin Yan Estate under HA. Other fresh provision retail outlets are also available in the area. Besides, at Hung Shui Kiu, which is just adjacent to Tin Shui Wai, there is currently a Hung Shui Kiu Temporary Market managed by the Food and Environmental Hygiene Department ("FEHD") and a market in Hung Fuk Estate under HA. HA will also provide a shopping centre and a market in Ping Yan Court, i.e. a subsidized sale flats project under construction in the area. The project is scheduled to complete in 2018. According to the announced Hung Shui Kiu NDA Revised Recommended Outline Development Plan, the construction of three markets in the NDA is proposed, including two wet markets located within public housing developments and one sizable public market on a Government site at a convenient and easily accessible location.

When deciding the location site of a new public market, the Government will consider key factors such as the geographical location, existing and planned uses, usable area and ancillary LEGISLATIVE COUNCIL ― 15 February 2017 3721

transport facilities provided nearby, in order to ensure that, upon completion, the market will be of a substantial scale and viability and that public finances and land resources can be optimized.

After considering the relevant factors of various aspects mentioned above and the actual conditions of the two NDAs, the Government has initially identified suitable sites in the east of Tung Chung New Town East Extension Area as well as in the southwest of Hung Shui Kiu NDA to build sizable public markets. Located in the vicinity of a public transport interchange, the site in the Tung Chung New Town East Extension Area is also close to the proposed Tung Chung East MTR Station, thus facilitating its link with the existing Tung Chung MTR Station and the proposed Tung Chung West MTR Station. On the other hand, the site in Hung Shui Kiu NDA is located in the vicinity of the proposed Hung Shui Kiu Railway Station, the proposed environmentally friendly transport services facilities and a public transport interchange, thus facilitating its link with Hung Shui Kiu NDA and various areas in Tin Shui Wai. Well-connected by public transport and close to train stations and public transport interchanges, both of the two new market sites mentioned above are accessible to more members of the public. As such, not only the needs of the residents in the two NDAs, but also the needs of the populations in the Tung Chung and Tin Shui Wai areas will be catered for altogether.

In short, according to the existing, ongoing and proposed projects taken into account, the market facilities in the two NDAs will be able to cater for the needs of local residents and those living in nearby regions. In view of the above criteria, the site in the east of Tung Chung New Town East Extension Area and the one in the southwest of Hung Shui Kiu NDA are considered more ideal locations for building new public markets when compared with the sites mentioned in the question. They are also more suitable for building new public markets that are positioned to serve the regions.

(4) The Food and Health Bureau conducted a policy review on public markets in 2007-2008, which concluded that the future provision of new public markets should be considered on a case-by-case basis to ensure efficient use of public resources. Apart from the population 3722 LEGISLATIVE COUNCIL ― 15 February 2017

of the area in question, other relevant factors that should be considered include the demographic mix, community needs, the presence of markets facilities nearby, the number of fresh provision retail outlets available in the vicinity, and public sentiment towards the preservation of hawker areas in the particular locality. The Government consulted the Panel on Food Safety and Environmental Hygiene of the Legislative Council and all District Councils on the review findings in 2008. As a result of the policy review conducted by the Food and Health Bureau, those parts concerning public markets in Chapter 6 of the Hong Kong Planning Standards and Guidelines ("HKPSG") (which deals with retail facilities) were amended in April 2009 and have remained in force since then. The revised HKPSG is based on a more holistic consideration of above relevant factors, rather than just the size of the population, in the planning of public markets. When preparing or reviewing town plans, the Planning Department will consult the relevant Policy Bureaux and departments, so as to ascertain whether there is a need to reserve land for public markets. We will, in the light of social developments and the actual situation on the ground, assess the need to review the planning guidelines for public markets as and when appropriate.

Our focus is on facilitating convenient access on the part of the public to retail outlets in their vicinity for meeting their daily needs on fresh food. Currently, there exists a variety of channels for the public to purchase fresh food. Apart from public markets, many members of the public when purchasing fresh food may choose to patronize markets, supermarkets and various types of retail outlets operated by other public and private entities. Customer preference for different shopping venues in purchasing fresh food may evolve in tandem with changes in socio-economic circumstances, lifestyles, purchasing power and various other factors.

Providing a new public market requires the use of Government land and entails public financial commitment. Therefore, in considering whether a public market should be built, we have to duly assess the need for the market and cost-effectiveness in order to ensure that public resources are put to proper use. In fact, in the face of fierce competition and changing circumstances in individual communities, LEGISLATIVE COUNCIL ― 15 February 2017 3723

some public markets are facing relatively high vacancy rates and low customer flows. Also, the Audit Commission has in previous reports pointed out that, given the high cost of constructing a new public market, the relevant principles should be strictly adhered to.

In considering whether new public markets should be provided in individual areas, we would continue to take into account the above mentioned planning standards and guidelines, the actual situation of individual areas and the views of stakeholders, to ensure that public resources are put to proper use.

Among the views requesting the provision of new public markets, we notice that many of them assume that the goods sold in public markets managed by FEHD are cheaper than those sold in markets managed by other organizations and supermarkets. However, this assumption has not been supported by facts. Insofar as the prices of the goods sold in public markets are concerned, tenants of public markets are free to determine and adjust the prices of their goods having regard to market forces (for example, operating costs, supply and demand, prices of similar goods sold nearby). The Government does not control the prices of the goods sold in public markets. Nor is the Government in a position to guarantee that the goods sold in public markets would be cheaper than those in other shops.

Provision of rest rooms, toilets and pantries at bus termini for bus captains

20. MR LUK CHUNG-HUNG (in Chinese): President, some bus captains engaged by the MTR Corporation Limited ("MTRCL") and franchised bus companies ("bus companies") have relayed to me that the ancillary facilities (including facilities such as toilets and regulator kiosks) provided at bus termini have all along been inadequate. In this connection, will the Government inform this Council:

(1) of the current number of bus termini, and a breakdown respectively by whether or not they are provided with (i) rest rooms, (ii) toilets and (iii) pantries for bus captains;

3724 LEGISLATIVE COUNCIL ― 15 February 2017

(2) as some bus captains have pointed out that since some bus termini do not have toilets provided by MTRCL/bus companies for their staff, they can only use the toilets in the shopping malls in the vicinity of the such bus termini, but after the closure of the shopping malls at night, they can only use the public toilets located farther away, which has caused inconvenience to them, whether the relevant government departments will urge MTRCL and various bus companies to provide toilets for bus captains at all bus termini and provide them assistance in this regard;

(3) as some bus captains have pointed out that most bus termini are not provided with all three facilities of rest rooms, toilets and pantries for bus captains, whether the authorities will request MTRCL and various bus companies to provide all such facilities at various bus termini; and

(4) as some bus captains have pointed out that the pantry services at various bus termini vary in quality, whether the authorities will request MTRCL and various bus companies to step up their monitoring of the standard of the pantry services?

SECRETARY FOR TRANSPORT AND HOUSING (in Chinese): President, the Transport Department ("TD") has all along encouraged the bus companies, being good employers, to provide suitable toilets and rest facilities at bus termini for their staff. When relevant government departments and other stakeholders consider and vet the applications for setting up these staff facilities, TD has all along been providing appropriate coordination so as to facilitate early installation of such facilities. My reply to the question raised by Mr LUK Chung-hung is as follows.

At present, toilets and rest facilities are generally part of the basic ancillary facilities when new bus termini are built. Of the existing 294 bus termini in Hong Kong (inclusive of those serving MTR buses), 250 (about 85%) are provided with resting rooms for bus captains. As for toilets, they are either located at or within a walking distance of three minutes at 282 bus termini (about 96%), while toilets are basically located within a walking distance of around four to seven minutes for the remaining bus termini. These toilets are available for use during the normal operating hours of bus services.

LEGISLATIVE COUNCIL ― 15 February 2017 3725

A small number of bus termini do not have rest facilities or toilets for bus captains mainly because of the physical constraints at individual sites (e.g. the bus terminus is located on a narrow sidewalk) or because of the views of the neighbourhood. The bus companies will continue to explore feasible solutions to overcome the physical constraints for setting up toilets at those bus termini which currently do not provide one within a walking distance of three minutes, as well as providing rest facilities for bus captains at bus termini which currently do not have such facilities.

The bus companies are aware of the staff concerns over the arrangement of using the toilets located around certain bus termini by bus captains on night shifts. At present, most of the toilets at or around individual bus termini are available for use by bus captains during the operating hours of routes served by the respective termini. The bus companies have adopted various measures to address the situations having regard to the practical circumstances of individual locations, such as discussing with the management of nearby shopping arcades for extending the opening hours of toilets or fine-tuning the duty rosters of bus captains as appropriate. TD will continue to facilitate the bus companies to actively cater for the needs of bus captains on night shifts, and endeavour to provide the necessary assistance to bus companies in this respect.

As regards staff canteens, only the Kowloon Motor Bus Company (1933) Limited ("KMB") has provided such facilities at five bus termini for the convenience of its staff. According to KMB, it is arranging comprehensive renovation (including enhancement of air-conditioning systems and catering facilities) at these staff canteens, which are expected to be reopened to serve frontline staff upon completion of the renovation works by mid-2017. KMB also advised that it would conduct site inspections in respect of the canteens' operation from time to time and follow up with the contractor on any matters concerning the quality of the food and service provided. Meanwhile, the bus companies have installed self-service facilities such as drinking water dispensers, microwave ovens, refrigerators and vending machines for use by staff at most of the bus termini and rest rooms.

The bus companies will continue to listen to the views from their staff, and take into account changes in the working environment of bus captains in making optimal use of the space at bus termini for providing various kinds of appropriate staff facilities.

3726 LEGISLATIVE COUNCIL ― 15 February 2017

Staff handbook on the handling of insolvency cases

21. MS ALICE MAK (in Chinese): President, the Case Management Division ("CMD") of the Official Receiver's Office ("ORO") is responsible for insolvency administration. Some staff association representatives of ORO have relayed to me that staff members working in CMD have encountered numerous difficulties when handling cases, such as chaotic filing system and the lack of clear working guidelines, so much so that they have to spend a lot of time on collecting relevant information when handling cases, resulting in the efficiency in case handling being affected. These representatives have also pointed out that as the content of the handbook provided by CMD for staff's reference ("the handbook") is incomprehensive and outdated, it cannot help staff address the difficulties encountered at work. Although ORO assigned a senior insolvency officer in 2012 to update the handbook, so far a handbook with comprehensive and updated content has yet to be published. In this connection, will the Government inform this Council:

(1) when the first edition of the handbook was drawn up;

(2) whether ORO has updated the handbook from time to time to complement the amendments to and implementation of the relevant legislation; if ORO has, of the details and the number of updates, as well as why a handbook with comprehensive and updated content is unavailable so far; if not, whether the authorities will set the timetable for updating the handbook and increase the manpower for such task; and

(3) whether ORO has regularly assessed the effectiveness of the handbook in enhancing the efficiency in case handling?

SECRETARY FOR FINANCIAL SERVICES AND THE TREASURY (in Chinese): President, below is the Official Receiver's Office ("ORO")'s reply to the three parts of the question raised by Ms Alice MAK:

(1) The existing guidelines were introduced in 1999 as a general guide for reference by staff. As the facts and circumstances of each case may vary, our staff will, in addition to making reference to the above mentioned guidelines, also apply their professional knowledge, experience and judgment in administering individual cases.

LEGISLATIVE COUNCIL ― 15 February 2017 3727

(2) ORO has made timely amendments to part of the case management guidelines having regard to the actual needs. Apart from the general guidelines mentioned above, ORO has issued guidelines on specific issues regularly regarding individual aspects of case management or in light of implementation of new legislation. ORO also has set up a departmental one-stop electronic database with updated information on case management matters for reference by staff. The department conducts internal training while supervisors constantly provide guidance and coaching for staff. Staff also attend external training to enhance and update their professional knowledge.

(3) As mentioned above, apart from the general guidelines, ORO will also assist staff in case management through issuing guidelines on specific issues and providing supervisory guidance. ORO is committed to upholding the quality of case management service.

Air pollution in Hong Kong

22. MR KENNETH LEUNG: President, on 8 January this year, smog shrouded Hong Kong, with the Air Quality Health Index recorded at some general air quality monitoring stations ("AQMSs") reaching 8 or above, which indicated very high health risk and high concentration of key air pollutants such as nitrogen dioxide ("NO2") and ozone ("O3"). It has been reported that some experts pointed out that local pollutants were the main causes of such smog. In this connection, will the Government inform this Council:

(1) of the respective annual average concentration of (i) NO2 and (ii) O3 in the air as recorded at AQMSs (both general and roadside ones) in each of the past five years;

(2) how the respective (i) concentration limits and (ii) numbers of exceedances allowed in respect of NO2 and O3 under Hong Kong's Air Quality Objectives ("AQOs") compare with those under the World Health Organization's Air Quality Guidelines ("AQGs"); whether the annual average concentration of NO2 in 2016 met the targets under AQOs and AQGs;

(3) of the respective percentages of the NO2 emitted in Hong Kong in 2016 which originated from various air pollution sources (including motor vehicles, marine vessels, non-roadside machinery and power 3728 LEGISLATIVE COUNCIL ― 15 February 2017

plants); the respective measures taken by the authorities in the past three years to reduce NO2 emission from such sources, and whether they have assessed if those measures were sufficient to enable Hong Kong to meet the targets under AQOs and AQGs;

(4) given that the annual average concentration of O3 in the air recorded in Hong Kong and the Pearl River Delta ("PRD") Region both showed an upward trend in the past few years, whether the authorities have examined the contributions from the air pollution sources in Hong Kong towards the upward trend of O3 concentration in the PRD Region; as high level of O3 concentration in the air promotes the formation of NO2, whether they have studied the quantitative impacts of O3 on the annual average concentration of NO2 in Hong Kong in 2016; and

(5) of the concrete measures undertaken in the past three years and those to be taken in the next three years by the authorities of Hong Kong, Macao and the Guangdong Province to jointly curb the increase of O3 air pollutants in the PRD Region?

SECRETARY FOR THE ENVIRONMENT: President, the air pollution episode on 8 January 2017 is typical of the influence of regional pollution in the Pearl River Delta ("PRD") Region on local air quality. In early January 2017, the weather in the PRD Region was mainly sunny and calm, which was conducive to the accumulation of ozone ("O3") and fine suspended particulates ("FSP" or "PM2.5") in the PRD Region. At that time, the prevailing wind in Hong Kong was easterly, which was relatively clean and blocked the polluting air mass in PRD from affecting Hong Kong. In the morning of 8 January, the easterly wind started to be taken over by westerly wind, which brought the polluted air in PRD to Hong Kong, leading to deterioration in local air quality.

Before the wind turned westerly in the morning of 8 January 2017, the PM2.5 concentrations in Hong Kong were less than 40 µg/m3 and the Air Quality Health Index was 4 (i.e. health risk of moderate category) or below. When the wind started turning westerly, the PM2.5 concentration at Tung Chung increased 3 to 64 µg/m at 10:00 am, followed by a rise in O3 level. By 4:00 pm, the PM2.5 3 3 and O3 levels thereat reached its peak on that day at 141 µg/m and 188 µg/m respectively. As the westerly wind extended its coverage, the adverse air quality impacts spread to other parts of Hong Kong, except the eastern side. A rise in the PM2.5 and O3 levels were also recorded at other stations like Tsuen Wan station and Central/Western station.

LEGISLATIVE COUNCIL ― 15 February 2017 3729

Our replies to the questions are as follows:

(1) The annual average concentrations of nitrogen dioxide ("NO2") and O3 recorded at the general and roadside air quality monitoring stations for the past five years are in Table 1. Among the two pollutants, roadside NO2 and O3 in general air are more of a concern. There is a clear decreasing trend with NO2 in the past five years, particularly roadside NO2 which dropped by 31%. Roadside O3 levels however have slightly increased over the same time period because of the reduced vehicular emissions of nitrogen oxides ("NOx") which reacts with O3 to form NO2.

(2) The Air Quality Guidelines ("AQG") of the World Health Organization ("WHO") has recommended that countries in setting their air quality standards should strike a balance between public health and local circumstances, and take into account practical circumstances, such as health risk due to air pollution, latest technological developments, and economic, political and social considerations. Recognizing that its AQG levels are very stringent, WHO has also recommended interim targets ("ITs") so that countries could progressively improve their air quality with a view to achieving AQGs in the long run. As far as we know, no country has fully adopted AQGs as its air quality standard.

The current Air Quality Objectives ("AQO") of Hong Kong was drawn up in light of the aforementioned recommendations of WHO and the practices of environmentally advanced countries. About half of the Hong Kong's AQO parameters are already set at WHO AQG levels with the rest pitching at ITs of WHO. Specifically for NO2, our AQO limits are already set at AQG levels; whereas for O3, the AQO limits are set at the IT level of WHO AQG because our O3 level is subject to strong influence of PRD. The relevant AQO and WHO AQG for NO2 and O3 are in Table 2.

WHO sees it necessary to specify allowable numbers of exceedance for the air pollutant concentration levels and leaves it for countries to do so. When setting the allowable numbers of exceedance of the current AQOs, we made reference to the practices of the European Union ("EU"). The same number of exceedance as EU, which is 3 18, is allowed for our hourly limit of NO2 (i.e. 200 µg/m ). In the 3 case of O3, EU allows the 8-hour average limit (i.e. 120 µg/m ) to be 3730 LEGISLATIVE COUNCIL ― 15 February 2017

exceeded 25 times while we allow 9 times with our limit (i.e. 160 µg/m3).

In 2016, 3 out of the 16 air quality monitoring stations (including 13 general stations and 3 roadside stations) met the annual average concentration of NO2, which are set at AQG of WHO. Tseung Kwan O and Tap Mun stations did not provide sufficient data for the comparison because the former started operation only in March 2016 while the latter was closed for renovation works for two months in the year.

(3) It takes time to gather data to compile and validate emission inventories. We are now finalizing the inventory of 2015 and have started collecting data for compiling the 2016 emission inventory. The contributions to the local NOx emissions from major sectors based on the 2014 emission inventory are in Table 3.

As seen from Table 3, road transport, electricity generation, navigation and non-road mobile machinery are the main emission sources of NOx, accounting for over 90% of Hong Kong's total NOx emission. The Government has undertaken a host of measures in past years, focusing on these four main sources. The key measures are as follows:

Road Transport

(a) We launched in March 2014 an incentive-cum-regulatory scheme to phase out some 82 000 pre-Euro IV diesel commercial vehicles by the end of 2019 with $11.4 billion set aside to assist the affected vehicle owners. As at the end of 2016, the scheme retired more than 60% of them;

(b) Starting on 1 September 2014, we have a strengthened vehicle emission control regime for liquefied petroleum gas ("LPG") and petrol vehicles, under which roadside remote sensing equipment is deployed to screen out LPG and petrol vehicles with excessive emissions. The vehicle caught will have to pass within 12 working days an advanced emission test to confirm the rectification of the excessive emission problem. Otherwise, its vehicle licence will be cancelled;

LEGISLATIVE COUNCIL ― 15 February 2017 3731

(c) We have subsidized franchised bus companies to retrofit their Euro II and III franchised buses with selective catalytic reduction devices ("SCRs") to upgrade their emission performance to Euro IV or above levels; and

(d) We have set up from 31 December 2015 franchised bus low emission zones in busy corridors in Causeway Bay, Central and Mong Kok such that the franchised buses in the zones have to be low emission buses (i.e. buses meeting Euro IV or higher emission standards or the SCR-retrofitted Euro II and III buses).

Electricity Generation

To control emissions from power plants, we have been imposing statutory emission caps on their emissions of sulphur dioxide ("SO2"), NOx and respirable suspended particulates ("RSP") through the issuance of Technical Memorandums ("TM") since 2008. So far, we have promulgated six TMs with progressively tightened emission caps. The latest one, which is the sixth TM, was promulgated in November 2016 to tighten the emission caps of power plants from 2021 onwards by 72%, 52% and 56% for SO2, NOx and RSP respectively as compared with the first TM.

Navigation

The control measures for marine vessels mainly focus on the emissions of SO2 and RSP. We have capped the sulphur content of locally supplied marine light diesel at 0.05% since April 2014. Since July 2015, we have also required ocean going vessels to switch to low sulphur marine fuel (with sulphur content not exceeding 0.5%) while at berth.

Non-road Mobile Machinery

A new regulation was introduced in June 2015 requiring newly imported non-road mobile machinery to comply with statutory emission standards.

The above measures have borne fruits. From 2012 to 2016, the roadside RSP, FSP, NO2 and SO2 concentrations have a clear 3732 LEGISLATIVE COUNCIL ― 15 February 2017

decreasing trend of 28%, 28%, 31% and 30% respectively. Over the same period, the ambient concentrations of RSP, FSP, NO2 and SO2 have dropped by 21%, 21%, 8% and 18% respectively, while the O3 level in general air has a slight decline of 3%.

With the implementation of the committed air quality improvement measures, the Government targets to attain broadly the current AQOs by 2020. Meanwhile, we are reviewing AQOs with a view to identifying new practicable air quality improvement measures and assessing the scope of tightening AQOs made possible by their implementation. The review will be completed in 2018.

(4) Under sunlight, NOx reacts with volatile organic compounds ("VOC") to form O3, which in turn helps the formation of fine particulates (commonly called photochemical smog). O3 pollution is a regional problem. A recent research result(1) concluded after analysing the local O3 data from 2002 to 2013 that, on average, regional O3 accounted for 70% of O3 in Hong Kong while the rest was locally produced. An observation of the study is that locally produced O3 had been reduced but the reduction had been more than offset by the increase in regional O3, thereby leading to a rise in O3 levels in Hong Kong. There are some initial signs of a reversal of the past increasing trend in O3 in general during 2012 to 2016 (Table 1), which could be due to our collaboration with the Guangdong Provincial Government in reducing the emissions of NOx and VOC, the precursors leading to the formation of ozone via photochemical reactions. Further observations are needed to affirm the reduction trend while we continue our collaboration with Guangdong in reducing the emissions of NOx and VOC, among other key air pollutants, in the whole PRD Region.

O3 reacts with NOx (e.g. from vehicular emissions) to form NO2. Whenever Hong Kong is under the influence of regional O3, the NO2 level here, particularly at the roadside, will also increase. Hence, it is imperative to reduce the O3 level both locally and in the PRD Region for tackling the roadside NO2 pollution, even though we have not quantified the impacts of O3 on the annual average NO2 concentrations in Hong Kong.

(1) The research is carried out by Prof WANG Tao of The Hong Kong Polytechnic University and co-researchers LEGISLATIVE COUNCIL ― 15 February 2017 3733

(5) Collaboration with Guangdong is imperative to tackle the O3 pollution. Specifically, the emissions of NOx and VOC in the PRD Region have to be reduced. To this end, the Hong Kong Special Administrative Region and Guangdong Provincial governments agreed in November 2012 to a set of regional emission reduction

targets and reduction ranges for NOx and VOC, alongside SO2 and RSP, for 2015 and 2020 respectively. Both sides are now conducting a mid-term review to assess the attainment of the emission reduction targets for 2015 and to finalize the emission reduction targets for 2020. The review will be completed in the first half of this year.

To meet the reduction targets, Hong Kong has been reducing our emissions of NOx by measures outlined in part (3) of this reply. As for VOC, we have been regulating the VOC contents of paints, consumer products, printing inks, adhesives and sealants, which are the major contributor to VOC emissions. The replacement of old vehicles by new ones will also help reduce vehicular VOC emissions, which account for about 18% of the local VOC emissions. In the next three years, we, apart from ongoing efforts to reduce VOC emissions, will extend the VOC control to fountain solution and cleansing solution of the printing industry and explore the feasibility of tightening the VOC content of some architectural paints to further reduce our VOC emissions.

As for Guangdong, it has also been targeting the control of major emission sources, including industries, power plants, vessels and vehicles to reduce their NOx and VOC emissions.

While Macao is not a party to the regional emission reduction targets, Guangdong, Hong Kong and Macao have been jointly monitoring the regional air quality; conducting the Joint Regional PM2.5 Study; and fostering exchanges and training on air pollution

forecasting technology. To better manage the regional O3 problem, the three governments are in preparation to include VOC monitoring in the regional air quality monitoring network in phases, starting from 2018. These efforts will provide a scientific base for formulating policies to tackle the regional O3 problem.

3734 LEGISLATIVE COUNCIL ― 15 February 2017

Table 1: Annual average concentration levels of NO2 and O3 from 2012 to 2016 (µg/m3)

Pollutants 2012 2013 2014 2015 2016* General 51 54 49 49 47 NO 2 Roadside 118 120 102 99 82 General 40 43 46 42 39 O 3 Roadside 15 14 21 19 19

Note:

* Figures of 2016 have not yet been fully validated

Table 2: Concentration limits for NO2 and O3 of AQO and WHO AQG

HK AQO WHO AQG Averaging Number of Number of Pollutant Concentration Concentration time exceedance exceedance Limit (µg/m3) Limit (µg/m3) allowed allowed 1-hour 200 18 200 Not specified NO 2 Annual 40 NA 40 NA * O3 8-hour 160 9 100 Not specified

Note:

* 160 µg/m3 is the interim target of WHO

Table 3: Contributions to the local total NOx emissions from major sectors in 2014

NOx emissions in Hong Kong's total Emission source * emissions in 2014 (%) Road Transport 19% Navigation 33% Non-road Mobile Machinery 7% Public Electricity Generation 33% Others 8%

Note:

* The 2015 emission inventory is under preparation

LEGISLATIVE COUNCIL ― 15 February 2017 3735

MEMBERS' MOTIONS

PRESIDENT (in Cantonese): Members' motions.

Proposed resolution under the Interpretation and General Clauses Ordinance to extend the period for amending the six items of subsidiary legislation in relation to the Public Bus Services Ordinance, which were laid on the Table of this Council on 18 January 2017.

I now call upon Mr Frankie YICK to speak and move the motion.

PROPOSED RESOLUTION UNDER SECTION 34(4) OF THE INTERPRETATION AND GENERAL CLAUSES ORDINANCE

MR FRANKIE YICK (in Cantonese): President, at the House Committee meeting on 20 January 2017, Members decided to set up a subcommittee for studying the relevant schedule of routes orders in relation to public bus franchisees.

In my capacity as the Chairman of the Subcommittee on Public Bus Franchisees' Schedule of Routes Orders, I now move the motion on extending the period for scrutinizing the relevant schedule of routes orders to 22 March 2017, so as to give members ample time to scrutinize the aforesaid orders.

President, I urge Members to support the motion.

Mr Frankie YICK moved the following motion:

"RESOLVED that in relation to the―

(a) Schedule of Routes (Citybus Limited) Order 2017, published in the Gazette as Legal Notice No. 1 of 2017;

(b) Schedule of Routes (Citybus Limited) (North Lantau and Chek Lap Kok Airport) Order 2017, published in the Gazette as Legal Notice No. 2 of 2017;

3736 LEGISLATIVE COUNCIL ― 15 February 2017

(c) Schedule of Routes (Kowloon Motor Bus Company (1933) Limited) Order 2017, published in the Gazette as Legal Notice No. 3 of 2017;

(d) Schedule of Routes (Long Win Bus Company Limited) Order 2017, published in the Gazette as Legal Notice No. 4 of 2017;

(e) Schedule of Routes (New Lantao Bus Company (1973) Limited) Order 2017, published in the Gazette as Legal Notice No. 5 of 2017; and

(f) Schedule of Routes (New World First Bus Services Limited) Order 2017, published in the Gazette as Legal Notice No. 6 of 2017,

and laid on the table of the Legislative Council on 18 January 2017, the period for amending subsidiary legislation referred to in section 34(2) of the Interpretation and General Clauses Ordinance (Cap. 1) be extended under section 34(4) of that Ordinance to the meeting of 22 March 2017."

PRESIDENT (in Cantonese): I now propose the question to you and that is: That the motion moved by Mr Frankie YICK be passed.

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

(No Member indicated a wish to speak)

PRESIDENT (in Cantonese): I now put the question to you and that is: That the motion moved by Mr Frankie YICK be passed. Will those in favour please raise their hands?

(Members raised their hands)

LEGISLATIVE COUNCIL ― 15 February 2017 3737

PRESIDENT (in Cantonese): Those against please raise their hands.

(No hands raised)

PRESIDENT (in Cantonese): I think the question is agreed by a majority respectively of each of the two groups of Members, that is, those returned by functional constituencies and those returned by geographical constituencies through direct elections, who are present. I declare the motion passed.

PRESIDENT (in Cantonese): Debate on motion with no legislative effect.

Motion of Thanks. Ms Starry LEE will move this motion. Mr WU Chi-wai, Dr Fernando CHEUNG and Mr SHIU Ka-chun wish to move amendments to the motion.

I have accepted the recommendations of the House Committee on the time limits for speeches in the debate.

Each Member, including the mover of the motion and movers of the amendments to the motion, may speak in any of the five debate sessions but he/she may only speak once in each session. The total speaking time limit for each Member is 30 minutes.

In each debate session, I will first call upon those Members who wish to speak to speak. After Members have spoken, if necessary, I will suspend the meeting for 10 minutes for the relevant public officers to prepare their response. Only public officers may speak when the Council resumes.

If public officers consider the suspension of meeting not necessary, I will invite them to respond right after Members have spoken. After the public officers have spoken, the debate session will come to a close.

After the five debate sessions have ended, Ms Starry LEE may speak on the amendments. I will then call upon movers of the amendments to move amendments.

3738 LEGISLATIVE COUNCIL ― 15 February 2017

After the amendments have been dealt with, Ms Starry LEE may reply. Finally, Members will vote on the original motion or the motion as amended.

The debate on this motion will last for three days. Today's debate will be suspended at about 10:00 pm. The debate for tomorrow will start at 9:00 am and be suspended at about 10:00 pm. The debate for the day after tomorrow will also start at 9:00 am. I will adjourn the meeting after conclusion of all the business on the Agenda or at around 10:00 pm.

I now call upon Ms Starry LEE to speak and move the motion.

MOTION OF THANKS

MS STARRY LEE (in Cantonese): President, as the House Committee Chairman, I move the motion entitled "That this Council thanks the Chief Executive for his address."

It is honestly my honour to move a Motion of Thanks for the first time as the House Committee Chairman. This is the first Motion of Thanks in the sixth term of the Legislative Council. To begin with, I wish to say that this motion does not contain any direction. It is purely moved according to the stipulations in this Council's Rules of Procedure and conventions, with the aim of enabling this Council to exercise its power and function specified in the Basic Law: "To receive and debate the policy addresses of the Chief Executive". Members may express their views on the contents of the Policy Address delivered by the Chief Executive and speak their minds in the debate sessions of these three days.

The Policy Address this year is the Chief Executive's last policy address in his terms of office. While only less than six months is left in the tenure of the current Government, this Policy Address is the longest one in the Chief Executive's terms of office. The Policy Address recaps the work of the current Government and devotes much treatment to livelihood issues and economic development. Even though it is still marked by certain inadequacies, it has honestly put forth many policy directions and specific measures. But in order to achieve smooth policy implementation for economic development and to implement measures which can benefit people and alleviate their difficulties, the Government must obtain the support of the community and the Legislative Council.

LEGISLATIVE COUNCIL ― 15 February 2017 3739

Much to my delight, the Chief Executive's Policy Address states that the Government attaches a great deal of importance to executive-legislature relationship, and will seek to work with Members from various political parties and groupings. I very much agree to the Chief Executive's remark, the remark that the public expect the executive and the legislature to perform their respective functions and join hands to promote Hong Kong's social and economic development.

President, executive-legislature relationship is an important issue that the House Committee Chairman will certainly raise in moving the Motion of Thanks every year. Looking back at the past two years, we could still see social dissension, unceasing internal attrition, and also persistent tension in executive-legislature relationship. It is now four months into the new legislative session. While the oath-taking incident has slightly subsided, the operation of the legislature has yet to return to a completely normal track, with occasional problems in meeting order. This has adversely affected the effective discharge of duties by the Legislative Council.

As the House Committee Chairman, I, together with the House Committee Deputy Chairman, will meet with the Chief Secretary for Administration after every House Committee meeting. When I and the House Committee Deputy Chairman met with the new Chief Secretary for Administration for the very first time last month, the Chief Secretary for Administration said that he would seek to communicate with the Legislative Council in the remainder of the present Government's terms of office for the purpose of fostering executive-legislature relationship. He also hoped that such communication could be conducted on a platform of regular meetings with us. I believe Members will highly welcome this idea of the Chief Secretary for Administration. As far as my understanding goes, the Chief Secretary for Administration has already begun to make active arrangements for meeting with Members from various political parties and groupings. As the House Committee Chairman, I will definitely seek to impartially reflect Members' decisions and the views of various political parties and groupings to the Chief Secretary for Administration while also truthfully relaying the thoughts of the executive. I, together with the House Committee Deputy Chairman, hope to serve as a bridge between the executive and the legislature by using this platform of regular meetings with the Chief Secretary for Administration, and to play a more active role. In this regard, I hope other government officials can give their support and pay more heed to the views of 3740 LEGISLATIVE COUNCIL ― 15 February 2017 various political parties and groupings in this Council in the course of implementing policy measures.

I also hope that apart from enhancing its communication with Legislative Council Members, the SAR Government can assist Legislative Council Members in enhancing communication with the Central Government. Recently, the House Committee gave its approval for the Panel on Development to conduct a two-day duty visit to the Dongjiang River Basin for the purpose of inspecting the operation of the Dongjiang-Shenzhen Water Supply System and also the measures taken by the Guangdong Provincial authorities to safeguard the quality of Dongjiang water supplied to Hong Kong. I hope that such practical business visits can provide Members of this Council with more opportunities to discuss with Mainland officials issues of mutual concern and in turn increase mutual understanding.

President, Hong Kong has lost considerable time due to internal social attrition over the past few years. This year happens to be the 20th anniversary of our reunification, and it coincides with government changeover. The broad masses invariably cherish expectations for the way forward, hoping that the executive and the Legislative Council can make concrete efforts to seek common ground and accommodate differences based on Hong Kong's overall interests and expand the room for mutual cooperation as much as possible, with a view to truly realizing the theme of the Policy Address this year―"Make Best Use of Opportunities Develop the Economy Improve People's Livelihood Build an Inclusive Society"―and in turn finding a way out for the future of Hong Kong.

President, with these remarks, I move the motion.

Ms Starry LEE moved the following motion: (Translation)

"That this Council thanks the Chief Executive for his address."

PRESIDENT (in Cantonese): I now propose the question to you and that is: That the motion moved by Ms Starry LEE be passed.

LEGISLATIVE COUNCIL ― 15 February 2017 3741

PRESIDENT (in Cantonese): This Council will now proceed to a joint debate on the motion and the amendments.

We now proceed to the first debate session. The debate themes are "Economic Development and Innovation and Technology".

This session covers the following seven policy areas: Commerce and Industry; Economic Development (other than energy); Belt and Road; Financial Affairs; Innovation and Technology Industries; Broadcasting and Telecommunications; and Maritime and Aviation.

Members who wish to speak in this session will please press the "Request to speak" button.

MR KENNETH LEUNG (in Cantonese): President, my speech today will focus on the three major areas of financial technologies ("Fintech"), green finance and the Financial Services Development Council, Hong Kong ("FSDC").

Although the need for Fintech development and grasping the opportunity has been mentioned for two years in a row in a policy address, no concrete measures in this regard have been formulated so far. In the report published two weeks ago, the Singaporean Government's Committee on the Future Economy discusses how the Singaporean Government should respond to changes brought about by technologies. The report points out that in the midst of rapid technological advances, new technologies, such as digital services like Uber and Spotify, can supplant entire industries, displacing all their workers. Hence, local talents must pursue continuing education in order to maintain their competitiveness. In the course of developing Fintech, the Hong Kong SAR Government also sees the need to nurture a new generation of Fintech talents. However, the sole emphasis on this has often led the Government to overlook the far-reaching impacts of Fintech development on traditional industries, and how traditional industries can nurture talents with a view to meeting new challenges.

Last year, the Hong Kong Monetary Authority ("HKMA") launched the Fintech Supervisory Sandbox ("FSS"), allowing authorized institutions participating in FSS to launch pilot trials of products or services under simpler supervision, thereby shortening the cycles of research and development. 3742 LEGISLATIVE COUNCIL ― 15 February 2017

However, the threshold is very high and basically, only banks can try out the application of new technologies.

In contrast, the terms of the Fintech Regulatory Sandbox ("FRS") in Singapore are more lenient and more conducive to Fintech development. The SAR Government claims that it wants to develop Hong Kong into a Fintech hub, but its strategy is biased towards authorized financial institutions, excluding the bottom-up stimulation of technological development and other financial institutions from FSS. In this connection, I hope the SAR Government can consider the feasibility of extending the scope of pilot trials under FSS, so that other regulated institutions that are not authorized financial institutions can also benefit.

President, green finance is the second issue I want to talk about. Despite all the reports listed on page 6 of the Policy Address, and although one of them recommends developing Hong Kong into a regional green finance hub, no measures have been put forward to implement the recommendation. The development of green finance has by now become a very important issue for international financial institutions, and the green financial services industry has been developed in European and American countries for at least 10 years. At China's suggestion, the Green Finance Study Group was established at the G20 Summit held in Hangzhou in September last year. According to rough estimates, an investment of US$5 trillion to US$7 trillion has to be made globally in green finance every year in order to achieve the objectives set out by the United Nations on climate change and sustainable development, and an annual investment as high as US$600 billion has to be made in green projects by China alone. For more detailed analyses of the above figures, reference may be made to the following report: "Green Finance ― A Growing Imperative", 2016, by China's Green Finance Committee, the Securities Industry and Financial Markets Association, and the United Nations Environment Programme.

Among the many green finance products, the green bonds market has recorded a very fast growth rate over the past few years. According to the figures released by the Climate Bonds Initiative, the total issue volume of green bonds worldwide was as large as US$81 billion last year. Since the opening up of its green bonds market in 2015, China has become the biggest issuer of green bonds by now. It issued US$36.9 billion worth of green bonds last year, and this is approximately equivalent to RMB253 billion, or 45% of the total value of bonds issued globally.

LEGISLATIVE COUNCIL ― 15 February 2017 3743

As an international financial centre and the largest offshore Renminbi market, Hong Kong can in fact strive to become a leading city in Asia for the issuance of green bonds. As a platform of green financing, Hong Kong will be able to assist Mainland enterprises and financial institutions in issuing green bonds outside the country, and in addition, it can also assist overseas investors in entering the rapidly growing green bonds market of the Mainland.

Although Hong Kong has great potentials in becoming a leading centre for green finance in the region, it must still improve itself in respect of rating benchmarks if it is to promote the development of green finance. Many international rating agencies have a presence in Hong Kong, but none of them is headquartered in Asia and follows any Asia-based rating benchmarks. Moreover, the issuance of green bonds and green financing must both follow a set of clear and objective standards, but such standards are not found in Hong Kong as an international financial centre. I hope the Government can thoroughly consider this point.

With regard to financial development, the third issue I would like to discuss is FSDC. In a fashion rarely seen before, the Policy Address gives a whole-page array of totally 26 research reports written by FSDC over the past four years. It seems that Chief Executive Mr LEUNG Chun-ying has purposefully done so in order to answer the allegations of this Council and people in the financial industry concerning the ambiguous role and ineffectiveness of FSDC.

Some of the 26 reports published by FSDC on the development of Hong Kong's financial industry can indeed provide useful reference, one example being "Hong Kong as a Regional Green Finance Hub" mentioned just now, but most of these reports are not translated into concrete policies, showing that FSDC is incapable of doing so.

The role of FSDC in the LEUNG Chun-ying administration is just an advisory committee whose terms of reference do not cover the formulation, implementation and execution of financial policies. However, FSDC has often acted in ways that go beyond the conventional parameters of advisory committees in general. For example, it has co-organized international conferences and proposed the creation of an Executive Director post in the Panel on Manpower of the Legislative Council. All these are very strange acts. I hope the next Chief Executive can re-examine the statutory status of FSDC or the need for its 3744 LEGISLATIVE COUNCIL ― 15 February 2017 retention. If FSDC is really intended as an organization with real functions, it must not continue to exist and operate in such a dubious manner.

President, my remarks on such areas also cover the issue of human resources, but I would like to leave my detailed comments on the need for manpower development in Hong Kong to the fourth debate session. President, I so submit.

MR CHARLES PETER MOK (in Cantonese): President, this Policy Address is the last Policy Address of the incumbent Government. I believe some people do not expect much from the Policy Address, but I still have some expectation about it. I hold that the Government has the responsibility to report to the public how it has fulfilled the commitments made by its leader LEUNG Chun-ying, and it also has the responsibility to lay down some directional policies for Hong Kong, carry out reforms that are unlikely to be carried out by the next Government and take forward projects that have long been discussed but yet to be launched. Although the incumbent Government has only a few months left in its term, it still needs to take forward all these tasks.

This Policy Address inevitably gives people the impression that the Government is waiting for its term to end. But economic development and the world trend, especially technology development, will not wait for you. If Hong Kong stops its development, it will lag behind others. We all see that various world economic rankings of Hong Kong have been dropping in the past five years under the leadership of the incumbent Government, though I am not saying this is entirely the Government's fault or responsibility, and the drop is particularly prominent in rankings related to our innovative capability.

Recently in January, Bloomberg announced the rankings of the world most innovative economies. Hong Kong climbed up two levels to rank 35, but our competitors ranked much higher than us. Although the rankings do not mean everything, this Bloomberg Innovative Index does reflect how the world sees the present policies of Hong Kong.

There is hardly any differences between the polices announced in this Policy Address and the previous one, especially the policies on innovation and technology. The main policies announced are some new large-scale projects, including the Hong Kong/Shenzhen Innovation and Technology Park LEGISLATIVE COUNCIL ― 15 February 2017 3745

("Innovation and Technology Park") to be developed in the Lok Ma Chau Loop. Let us set aside for now the details of the Innovation and Technology Park because we are still pending a briefing from the Government on its details in March. But many people, despite their concurrence that the Innovation and Technology Park may be useful, question how the sector can remain viable in the interim of seven to eight years before the commissioning of the Innovation and Technology Park, and whether the sector should simply sit and wait for the establishment of the Innovation and Technology Park. The Government certainly will reject such views, but practically speak, we do need to see how much resources the Government will inject into this park. So, regarding the Innovation and Technology Park, we had better wait until we acquire more information about it in the future.

Another new measure in the Policy Address is the construction of residential units adjacent to the Science Park. But an interesting point to note is that the Government also says in the Policy Address that we should not focus only on infrastructural and land development in promoting innovation and technology because such hardware is a necessary but not sufficient condition for Hong Kong to promote innovation and technology successfully. It is good that the Government has this awakening, but regrettably, the new measures in the Policy Address only focus on developing infrastructure, properties and making other similar investment, and none focuses on the most imminent issues facing the industry, such as manpower training, provision of quality job opportunities for frontline staff, creation of local market to provide business opportunities for the industry, etc.

Hence, the Policy Address this year is much the same as the one last year. Actually, Members may be aware that many of the innovation and technology-related measures proposed in the last Policy Address are yet to be implemented. Hence, I would like to call on the Financial Secretary here to propose measures in the coming Budget to expeditiously increase the manpower of the Innovation and Technology Bureau to speed up its work, given that Secretary YANG said that the Bureau has insufficient manpower. We can wait no more.

Talking about the Innovation and Technology Bureau, I remember when Secretary YANG took office, he mentioned nine important tasks to be taken forward, if I remember correctly. But we notice that the progress of many of these important tasks, including the training of more technology talents, is hardly 3746 LEGISLATIVE COUNCIL ― 15 February 2017 satisfactory. He says that in order to develop a digital economy and share the economic results, we need to establish a talent pool, encourage enterprises to inject more resources into scientific research, attract investors to support local start-ups and update the relevant legislation. Of course, he also mentions the need to promote Science, Technology, Engineering and Mathematics (that is, "STEM") education.

Regarding all the items I just mentioned, it seems that the Chief Executive hopefuls have elaborated on these items in their election platforms in greater details than the incumbent Chief Executive has done in the Policy Address. But of course, we do not know whether they will fulfil their pledges if they become the future Chief Executive. Nevertheless, they do talk about many measures in their election platforms, including taxation reform, development of a digital economy, open data sharing, etc. Their elaborations are even more specific than those in the Policy Address this year.

Coming back to the point on manpower training mentioned just now, if the Government does not even respect IT personnel, what is the point to talk about supporting the development of innovation and technology? Last week, I moved an amendment about "T-contract" to the motion on "Expeditiously conducting a comprehensive review of the Government's service outsourcing system" and my amendment was passed by this Council. We have been criticizing the Government for adopting "lowest bid wins" as the outsourcing principle. This is especially relevant to the employees of outsourced service contracts. The Government on the one hand stresses the importance of fostering IT talents, but on the other hand, it has sub-contracted more than half of its IT service contracts.

The Financial Secretary has to seriously do some calculation on this matter because the Office of the Government Chief Information Officer has repeated told me that this practice cannot save money. If this practice can, I will shut up and accept it for the money saved, but the Office of the Government Chief Information Officer says that this practice cannot save any money and it costs the same as employing a civil servant. So, what does this mean? It means different pay for the same work.

The Financial Secretary knows best in saving money. By allowing intermediaries to take a portion of the salary from the IT personnel, the Government is actually allowing intermediaries responsible for application-filing LEGISLATIVE COUNCIL ― 15 February 2017 3747 and headhunting to reap all the profits, thus hurting the supply of talents for the industry and discouraging young people from joining this profession because they will become outsourced contract staff who are paid differently for the same work. So, would the Government please do not keep telling us that the solution to this problem is housing construction. It must take the initiative to resolve this problem itself.

Now, the Government employs IT personnel through "T-contracts" every year. The number of such contracts is increasing year after year. I am now waiting for the corresponding information in the Budget next week and see how many more such posts are proposed to be employed this year as compared with the 2 600-odd employed last year. We have been demanding the Government to improve this issue, but it has been telling us to go to different departments. At the end of the day, our requests are ignored. These employees go to work every day and do the same work as their civil-servant colleagues do, but they are actually remunerated differently from their peers. I thus hope that the Government can expeditiously conduct a comprehensive review on IT manpower and propose a mechanism to phase out long-term employment of "T-contract" staff and replace it with direct employment of IT staff. If we want Hong Kong to develop into a smart city, different departments must attach importance to talents. This is the only way to a better future.

The second point I wish to say is that the Government often talks about the need to properly take forward research and development ("R&D"), but what we see is that R&D projects are sometimes turned into infrastructural projects, such as the Innovation and Technology Park now being proposed in the Lok Ma Chau Loop. I do not want to talk about its pros and cons here today, or whether it will benefit the Shenzhen Municipal Government. But Members do want to know more about it. I am certainly aware that the Government is going to come to the Legislative Council to brief us on the project in March, but I wish to say that in the past month or so, I have been asking the Civil Engineering and Development Department to make public more information on the Planning and Engineering Study on Development of Lok Ma Chau Loop. And the response I got from the Department is that we were not allowed to view the information. It explained that the study report was outdated or that approval from the Shenzhen side needed to be sought because some of the information in the report was drafted together with the Shenzhen side.

3748 LEGISLATIVE COUNCIL ― 15 February 2017

We are worried that in the future when the Innovation and Technology Park really gets the go-ahead, the SAR Government may need to seek prior instructions from the Shenzhen Municipal Government before any decision concerning the Park can be made, given that now we already need to ask for instructions from the Shenzhen side on matters as simple as viewing the study report. According to the SAR Government, the study report was drafted a few years ago and some of its data are outdated. Actually, we don't mind because we can still have a glimpse of the prices set a few years ago from the outdated data. If the data are outdated, the Government can ask for more funding from the Legislative Council this time. But the Government refuses to make public the information for the Legislative Council and the public. Hence, I hope that when the Government briefs us on this project at the relevant panel meeting in March, it can explain the project in detail.

Coming back to the topic of a smart city, actions actually speak louder than words in this regard, and the Government must take actions to develop open data. We see that the Government has not made enough past efforts on making available its data. Several weeks ago, we had a few chances in different venues to discuss with public officers, including those on transport. Regrettably, in the discussion, we found that they misunderstood the concept of open data. They think that open data is to provide information to the public through government portals. But it is not so. Open data means to make available all information in digital formats for convenient and real-time retrieval by all people, researchers and the media. Nowadays, when we talk about open data, it not only means to make available data, but also to make available API (that is, Application Programming Interface).

It is surprising that the mindset of the Government is still very bureaucratic and old-fashioned, and it is afraid of taking responsibility in this matter. The Government is afraid that once making available its data, the public will know too much and will dig out information to criticize it. It thus resorts to different excuses to avoid providing information to us. What worries us more is that this mindset exists not only in the Government, but also in different sectors of society, including private enterprises (especially those belong to the regulated industries). Hence, in a debate with the Secretary for Transport and Housing earlier, I asked him to request the public transport companies to make available their data, including the MTR Corporation Limited, of which the Government is a major shareholder, as well as other bus companies. We have made such requests for years, but the Government has yet to answer our requests.

LEGISLATIVE COUNCIL ― 15 February 2017 3749

I recently noted an announcement from the Office of the Government Chief Information Officer, saying that they had secured the agreement of six major companies to make available their data. But it has been reported that these companies are only willing to do so through government portals. If I have the opportunity, I will ask the Government Chief Information Officer whether this is true and I will also raise this question when we scrutinize the coming Budget because such data belong to the public and the public should not have to make such a big effort to acquire and use these data.

After all, if the Government truly wants to properly take forward innovation and technology, instead of building one park after another, or constructing one building after another, it must take the lead to do digital transformation. The only good measure I find in this Policy Address is the earmark of $500 million for the Innovation and Technology Bureau to assist government departments in using technology to enhance the quality of public services. We have high hope about this and we look forward to seeing results from the Government.

But of course, I hope that the $500 million will not be used on enhancing existing IT services of the Government because these services should be enhanced in the first place. In fact, many governments of overseas countries have done a lot of work on their new IT services in the past decade. The United States, the United Kingdom and Singapore have set up their digital government services, which have enticed foreign talents to work together with the government to enhance their services.

Take Singapore as an example. We visited The Hub in Singapore, and Mr Kenneth LEUNG mentioned just now that Singapore even set up a committee called the Committee on the Future Economy ("CFE"). Instead of encouraging external enterprises to invest in CFE, the Singapore Government takes a leading role in it. If our Government is unwilling to take up a leading role, it cannot convince private enterprises and the people that it has provided sufficient room for development in this regard.

Digital transformation does involve another important issue and that is the need to review existing legislation. In order not to thwart digitization, I originally hope that the Government will propose in this Policy Address reviewing existing ordinances on sharing economy and financial technologies 3750 LEGISLATIVE COUNCIL ― 15 February 2017

("Fintech") in Hong Kong which are very outdated. Regrettably, I do not see any such policies from the Government, except those on providing more room for startups or measures on infrastructures and land supply.

In fact, in our discussion with startups and local small and medium enterprises, they have repeatedly voiced out that the Government must help them deal with the rigid ordinances, and that different departments, not just the Innovation and Technology Bureau, should realize that these rigid ordinances are obstructing the development of the industry. We had high expectation of the Innovation and Technology Bureau before its establishment, hoping that the Bureau would make other departments understand how they could work on digital transformation together. But we cannot find any relevant policies in this Policy Address.

In the Policy Address last year, the Government mentioned a popular subject, which is the development of mobile apps for calling taxi, hire vehicles, etc., and it also talked about the need to review the licence for hire vehicles. However, to date, we have heard nothing about it. On the front of Fintech, the Hong Kong Monetary Authority ("HKMA") has launched the Fintech Supervisory Sandbox for one year for use by other regulatory institutions and departments, including insurance industry players and the Securities and Futures Commission. HKMA has done a better job in this regard and is commendable for its efforts.

Last but not least, I wish to talk about technology education. I do not want to take technology education out from this debate session and wait until the education session to talk about it. I will thus briefly talk about it. Technology education is not just about earmarking money. We also need to take into consideration the prevailing situation and trends, and see how we can make students feel interested about it and how we can help teachers in taking forward technology education. Every time when the Secretary for Education came to the Legislative Council, he would just say things like allocating $200,000 for every secondary school, or giving $100,000 to every primary school. But giving away money cannot promote technology education. I am not sure whether the Financial Secretary also thinks that earmarking $50,000 more for each kindergarten or $400,000 more for a university can get this job done. But this is just not the way to do it. We all know that there are some problems with the school syllabus now, but the Government only focuses on giving away money. Many schoolmasters thus tell us that they would use up the $200,000 allocation LEGISLATIVE COUNCIL ― 15 February 2017 3751 on a few unmanned aircraft systems or robot parts. The money is spent, but not to the benefits of the schools, teachers and students.

Hence, all in all, we hope that the Financial Secretary can respond to the different questions Members raised today in his Budget next week, including how to systematically review the law, reform the Government, attach importance to talents, create our local market and employment opportunities. No matter who will become the next Chief Executive, I believe the next Government will also continue these measures. This would not be a problem. So, the current Government need not be so hesitant in taking its every step forward.

I so submit. Thank you, President.

MR ALVIN YEUNG (in Cantonese): President, our party will use eight words to describe the Policy Address of the Chief Executive: "The evil path of disguising deception as changes". Even at the end of his term of office, Chief Executive LEUNG Chun-ying still clings to his belligerency of governance, totally ignoring the present split of Hong Kong. The so-called innovation and changes in the Policy Address are only meant to embellish the failure of his administration over the past five years. We of course do not know his intention, but people simply cannot help suspecting that he actually wants the next Government to continue with the line of governing upheld by him or the forces behind him. For that reason, our party will vote against this motion.

President, since the current Government is in the final months of its term, we may call the Policy Address the last chapter of The Lame Duck's Memoirs. LEUNG Chun-ying sings praises for himself with his characteristic shamelessness in this last chapter, claiming that all his election undertakings have been honoured. However, is that true? In the coming few days, our party will speak on his performance in different policy areas one after another, including public rental housing ("PRH") supply, PRH waiting time, subdivided units, the offsetting mechanism under the MPF System, standard working hours, health care insurance and universal retirement protection. Besides, apart from explaining that the Government has failed to meet the livelihood expectations of the public in these policy areas, we will also point out how the Policy Address involves using the Hong Kong Palace Museum in the West Kowloon Cultural District for handing out money and land, and how the Government lays its hands on the Wan Chai Stadium. All these issues will be the focuses of the speeches of our party.

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President, the above mentioned livelihood issues aside, what economic policies can we see? The Policy Address continues to talk about the Belt and Road Initiative, the Shenzhen-Hong Kong Stock Connect and the National 13th Five-Year Plan. There is nothing wrong if the above projects can really bring us opportunities and find a new way out for the people of Hong Kong. Nevertheless, many such things are still at the stage of preliminary discussions. The fact is that Hong Kong's financial competitiveness is already declining. Does the Government have any measure to provide assistance? Star-ups in Hong Kong need the Government to remove barriers and lift restrictions, but the Government simply turns a blind eye to them. Likewise, the Government mentions nothing about the worldwide emergence of the green economy and the silver economy.

The economy is not doing well and the pledges on people's livelihood are not honoured. Politically, the situation is even more worrying. The Government is actively promoting the Basic Law now, but can this address the social split over the past five years in Hong Kong? We will focus on this area in our later discussion.

President, before ending my brief speech now, I hope all candidates who wish to take part in the Chief Executive Election this time around can learn from the failure of Hong Kong in the past five years, so as to identify the causes of our social division over the past five years and administer the right remedy. They must not cherish any hope of winning the election by counting on any specific forces or power. It is because if he or she wins in this way, he or she will not be able to solve the problems for Hong Kong. Over the past five years, we have lots of painful experiences in governance. We hope those intending to run in the Chief Executive Election can see the actual problems, rather than seeking to win by counting on any forces, because this will not enable them to solve the problem of social split in Hong Kong.

I so submit. Thank you, President.

DR KWOK KA-KI (in Cantonese): President, the LEUNG Chun-ying administration has been emphasizing that economic development is its priority task. The saying that "nothing about the economy and people's livelihood is trivial" is mentioned in his election manifesto five years ago and his successive annual policy addresses. However, the messy state of affairs at present can show that all the promises he made five years ago are nothing but "big lies and LEGISLATIVE COUNCIL ― 15 February 2017 3753 empty talks". As we can all remember, his most important economic initiative was the establishment of the Innovation and Technology Bureau in the name of fostering innovation and technology. Yet, has the establishment of the Innovation and Technology Bureau brought about any real changes? As we can see, there has been nothing worth mentioning on all fronts, including innovation and technology promotion, technology education and talents cultivation. What we can see are simply various acts to move closer to the Mainland politically and more red elements in our economy. If we do some serious thinking, we will realize that the development of the Loop or the innovation and technology development plan suddenly put forward for Heung Yuen Wai are just attempts to move closer to the Mainland in the name of technology or economic development.

As the Mainland seeks to create massive paper wealth and an abundance of capitals through the printing of more money, Hong Kong has indeed been able to get some benefits. However, we all know that such good times will not last long. Once the foreign exchange reserves or US dollar reserves announced by the People's Bank of China spiral down and the national treasury is emptied, the winds from the north will only get colder and colder. Yet, the Government still rests on its laurels. In respect of economic development, it only chants the empty slogan of Belt and Road. For innovation and technology development, its only measures are the Loop, the Heung Yuen Wai development project, and a greater number of economic policies with increasing dependency on the Mainland. When we realize that the Individual Visit Scheme as an economic measure is just like a stimulant which will lose its effect over time, the Government responds by further promoting the Scheme.

The Government's recent request for further funding to finance the expansion of the Hong Kong Disneyland is a very good example. The decision of Shanghai to build a Disneyland and the opening of the Shanghai Disneyland can actually show us that this economic stimulant prescribed by TUNG Chee-hwa, or the use of iconic projects as an elixir to boost the economy in times of difficulties, is actually doomed to failure. The agreement we signed with the Walt Disney Company was unequal in the very first place, and not only this, we have had to allocate funding and suffer losses year after year over all this time. And now, we are even asked to make an additional capital injection of $5.8 billion. But instead of learning from past experience, the Government still wants to bang its head against the wall.

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Some may think that the Food Truck Pilot Scheme is a very good economic development initiative. But this measure is in fact rather ridiculous. The Scheme is okay if it is just intended as a showcase of economic measures, or as what Mainland people usually call a show flat, because people will likely show some interest initially. However, what actual benefits can it bring to the development of Hong Kong's tourism industry as a whole? To what extent can it help business-starters with a small capital base? Can start-ups afford an investment of nearly $1 million?

We do not cherish any excessive hope that the Government can achieve really substantial progress in various areas like constitutional reform, education, health care and so on. But to say the very least, in respect of Hong Kong as an economic city, something they keep talking about, we fail completely to see why we can ever expect this Policy Address with such a short life span to achieve anything in the coming six months or one year. Nor do we expect that all those northward-looking economic development projects in Qianhai and the Loop can really bring forth anything to boost the economy of Hong Kong, except an illusion of opportunities painted by numerous slogans. If the mere chanting of slogans can bring economic success, the economies of many places, not only the Hong Kong economy but also the Mainland economy in particular, should have long since flourished. Regrettably, after the chanting of such slogans, all Hong Kong people have to meet development costs amounting to billions or even tens of billions, and the only things left, perhaps, are the many monuments in memory of the policy blunders.

With these remarks, I oppose the Motion of Thanks.

MS STARRY LEE (in Cantonese): President, although the term of office of Chief Executive LEUNG Chun-ying will expire after half a year, the final Policy Address he announced last month does not show any signs of slacking off. Instead, the Policy Address is full of substance, and comprising 279 paragraphs with almost 30 000 words, it is even the longest of its kind since the reunification. It proposes up to 182 new policy measures, more than the 160 measures introduced last time. Moreover, some of these initiatives touch upon many sensitive issues, and make planning for the short-, medium- and long-term development of Hong Kong. We can say that this Policy Address is full of commitment and initiatives. I hope the next Chief Executive and the next Government can continue with this committed and proactive style of LEGISLATIVE COUNCIL ― 15 February 2017 3755 administration, and follow the example of the present Government to roll out more policies beneficial to the people and Hong Kong. Furthermore, the next Chief Executive should continue with the policies rolled out in this Policy Address, otherwise these measures may end up uncompleted due to government changeover.

In the Policy Address this year, the Chief Executive uses four focuses, namely "Make Best Use of Opportunities", "Develop the Economy", "Improve People's Livelihood" and "Build an Inclusive Society", as the theme. Many recommendations made by the Democratic Alliance for the Betterment and Progress of Hong Kong ("DAB") are adopted, and apart from the usual polices on economic development, the Policy Address also proposes many constructive and specific policies in elderly care, support for the disadvantaged and community development.

First, I will talk about elderly care. The relaxation of asset limits for the Old Age Living Allowance ("OALA") proposed in paragraph 193 of the Policy Address has aroused heated discussion, as many elderly people will benefit from the relaxation. At the same time, the Policy Address proposes adding a higher tier of assistance to provide a monthly allowance of $3,435 per person. In paragraph 194, the Chief Executive proposes abolishing the arrangement under which relatives of an elderly person have to issue a "bad son statement" if such an elderly person applies for Comprehensive Social Security Assistance ("CSSA") on his own. In fact, many CSSA beneficiaries, members of community and political parties have long been requesting such a measure. The elderly people highly welcome the proposal in paragraph 195 to lower the eligibility age for the Elderly Health Care Vouchers from 70 to 65, and they are eager to see this implemented as soon as possible. Moreover, it is proposed in paragraph 177 that arrangements under the Guangdong Scheme will be extended to the Fujian Scheme, and paragraph 197 proposes supporting the elderly in investment management.

In respect of helping the disadvantaged, paragraph 178 proposes bolstering support for persons with disabilities; paragraphs 180 to 182 propose deploying additional resources to support children with special needs.

Regarding community development, paragraph 258 proposes adding resources for District Councils to implement the Community Involvement Programme; paragraph 219 proposes launching 26 projects to develop new or 3756 LEGISLATIVE COUNCIL ― 15 February 2017 improve existing sports and recreation facilities, and District Councils have already reached a consensus on building these facilities long awaited by the people; paragraph 255 proposes installing air-conditioning in 10 public markets; paragraph 256 proposes allocating additional resources to enhance local environmental hygiene. All these proposals manifest the concept of "addressing district issues at the local level and capitalizing on local opportunities" frequently referred to by the Chief Executive.

President, while making the above proposals, the Chief Executive has not dodged controversial issues which involve relatively far-reaching consequences, such as the Mandatory Provident Fund ("MPF") offsetting mechanism and retirement protection. He has indeed shown us the direction. Of course, I learn that the commercial sector and small and medium enterprises ("SMEs") have strong opinions about the Government's proposal on the MPF offsetting mechanism. While refusing to accept the proposal, they have actively put forward their views. I believe that this is good indeed. I hope the Government can duly take into account all relevant factors when it implements and finalizes the proposal, especially the real problem of business operations among SMEs.

Generally speaking, we appreciate and welcome the Policy Address as it can meet DAB's demand for improving the present situation to in preparation for embracing the future. However, the Policy Address still have much room for improvement, and we will go on fighting for enhancements by the Government.

First, society have long since reached a consensus that the eligible age for non-means tested "fruit grant" should be adjusted downward from 70 to 65, yet the Government still does not incorporate society's demands and opinions in this Policy Address. Many elderly people have been waiting for ages, and are left highly disappointed.

Second, though we support the Government's proposal to add a higher tier of assistance for the elderly, we believe that it has totally lost touch with the reality by setting the asset limit at $144,000. President, since the publication of the Policy Address, I have been receiving feedback from the community which criticizes that such an asset limit is cut off from the reality. Having endured a lifetime of hard work, many elderly people do have savings of at least $144,000, which will render them ineligible. Therefore, many elderly people have asked me to raise this question to officials and Secretaries of Departments: Is the fiscal condition in Hong Kong really that poor? Do elderly people have to spend LEGISLATIVE COUNCIL ― 15 February 2017 3757 every penny of their last $100,000 before they are eligible for such a higher tier of assistance? Do we really wish this to happen? I sincerely urge the Government to bear in mind that Hong Kong's achievement and wealth today are the fruits of the elderly people's sweat and toil in the past. So, as we have the means today, we must be generous to elderly people, so that they can lead a life of dignity. The Government will only fuel public resentment and attract criticism if its policy measures are impractical. This may even turn good measures into bad ones.

President, apart from this unrealistic asset limit, the community is also dissatisfied with another measure introduced in the Policy Address, that is, the proposal to raise the eligible age for elderly CSSA to 65 introduced in paragraph 194. Many CSSA recipients are glad to hear that the Policy Address has proposed to abolish the "bad son statement" arrangement, and they think this deserve our commendation. Yet I am astonished that the Government decides to raise the eligible age for elderly CSSA at the same time. How come the Government can think of such a regressive measure? The Government explains that this is done to align with the retirement age. However, I have talked to many elderly people and heard many of them say, "When I reach 60, I truly will not get a job because I really cannot find one, not because I am not willing to work. I am forced to retire. Why doesn't the Government consider this?" Therefore, they simply cannot agree to this adjustment proposed by the Government. Moreover, since the Government estimates that the adjustment will involve merely a few thousand elderly people, so why can we not offer more generous treatment to these elderly people who struggle to make ends meet?

Fourth, despite the rich content, the Policy Address does not respond or propose any policy or measure concerning such issues as shrinking room for upward social mobility for young people, increasing business difficulties for SMEs and the risks of slipping down the social ladder among the middle class.

President, after the publication of the Policy Address, the Budge will be announced next week. According to projections made by various accountant firms and the remarks frequently pointed out in this Council, this year's fiscal surplus may reach $80 billion to $90 billion, while the original assessment is $11.4 billion. If these projections are correct, the actual amount of fiscal surplus will be over seven times more than the original figure. I suppose Members, the media and the public know that it is not the first year that the Government has wrongly projected our fiscal status; this always happened over the last eight 3758 LEGISLATIVE COUNCIL ― 15 February 2017 years, and has even become normality. Therefore, according to my judgment, such under-estimation has become a structural issue. The incumbent Government and the new Government must contemplate if such an assessment tool can no longer reflect the facts. Otherwise, how come we can have such large discrepancies for at least eight consecutive years?

As the Government's projections cannot reflect the actual situation, it has been wary about increasing recurrent expenditure and public investment over the past, always illustrating to Members that it cannot substantially increase recurrent expenditure as Hong Kong has to take the path of sustainable development in the face of an ageing population in the future. However, such mindset is unconvincing to the people, and, after all, the figures do no match. Owing to such mindset, society has long been unable to deploy sufficient resources to handle different conflicts, leading to a "three Highs one Low" phenomenon. The first High is the Government's fiscal reserves balance; the second High is poverty population; the third High is the Gini Coefficient. For "one Low", it refers to low chance of upward mobility of course.

How can we deal with this "three Highs one Low" phenomenon? Apart from formulating policies, I believe it is necessary to more appropriately utilize Hong Kong's fiscal reserves for better financial commitment. So, I hope the Government can change its mindset. As an accountant, I understand very well the importance for being conservative, yet on top of being conservative, we have to be flexible when we have amassed our reserves up to a certain point. This is especially true when the public has started to ask, as stakeholders: "How come the Government can get a wrong projection every year, despite holding such a gigantic amount of fiscal reserves?" Though the new Financial Secretary has just left this Chamber, I hope he can illustrate how we can make effective use of our existing surplus when he announces the Budget next week. With regard to this year's fiscal surplus, I request the Financial Secretary to invest in the future and return wealth to the people.

Economic development is of course the focus of investing in the future. In fact, many sectors in Hong Kong are in need of government support in order to sustain their development. It is because most of the enterprises operating in Hong Kong are SMEs. The Secretary probably knows that they like to take Taiwan as an example. Many of them told me: "Governments and chambers of commerce in many places have put in considerable efforts, while we always have to fight on our own." These are the voices of SMEs. Therefore, I hope the LEGISLATIVE COUNCIL ― 15 February 2017 3759

SAR Government can make good use of its reserves to support sectors with potential. In the past, DAB has been pressing the Government to set up a Chinese medicine development fund. Other sectors are also in need of the Government's financial support. Regarding the beauty care trade, as the Secretary is present now, I hope he can undertake to discuss with trade practitioners about enhancing the trade's development in the future.

With regard to sharing economic benefits with the people, apart from caring for the elderly, the grass roots, the disadvantaged and the "N have-nots", we must never forget the middle class. Frankly speaking, members of the middle class who work earnestly cannot possibly benefit or directly benefit from the Policy Address. They eagerly wish that the Government can help them and alleviate their pressure through the Budget when the balance of fiscal surplus allows. So, we hope the Government can introduce measures like tax rebate, rates waiver and Government rent waiver for the middle class in the Budget next week if the fiscal surplus renders this possible. Moreover, each time when we meet with SMEs, they will voice an enormous amount of complaints to us that business environment is becoming increasingly difficult. So, likewise, if the Government's fiscal condition permits, I wish the Financial Secretary can consider refunding some profits tax and certain license fees compulsory for SMEs, so as to offer assistance to them in a bid to relieve their pressure.

In a nutshell, I hope the Financial Secretary and even the new government cabinet can proactively demonstrate their new vision and commitment, but never rigidly follow the rulebook, clinging on to the excess self-restraint in fiscal management frequently reiterated in the past. We need a new philosophy for fiscal management and to spend the money where it is due. Depending on our fiscal conditions, it is also necessary to increase public investment properly to deal with our deep-rooted problems in response to the aspirations of different sectors in society, so that the people can truly share the fruits of economic development.

President, this is the last Policy Address by the Chief Executive. He has spent a lot of paragraphs concluding the jobs done by the present Government. In the rest of my speech, I also wish to provide DAB's summary of the existing Government's performance from three aspects of economic development, land and housing, as well as poverty alleviation and elderly care. Generally speaking, we believe the incumbent Government has identified the problems concerning the contradictions between the economy and the people's livelihood. 3760 LEGISLATIVE COUNCIL ― 15 February 2017

Therefore, the Government had the courage to go against the odds over the past five years, especially amid endless filibusters in the Legislative Council. It is totally not easy for the Chief Executive and the overall Government to have achieved such a performance. We simply should not forget this. However, we must confess that, despite the Government's best endeavours, there are many problems remain unresolved in society.

Let us talk about economic development first. The present Government realizes that Hong Kong needs to both consolidate its traditional sectors and promote diversification of its industries. It also notices the importance of innovation and technology. The SAR Government always emphasizes "homeland relationship" and "foreign affairs". "Homeland relationship" means that the Government has to actively assist enterprises to grasp the opportunities arising from the National 13th Five-Year Plan and "One Belt One Road". During the term of the SAR Government, it has established a specific office for updating enterprises and enabling them to take their chances; on "foreign affairs", I believe, among all previous Governments, the incumbent Government is the most active one in setting up offices and liaison units in different regions, so as to facilitate Hong Kong enterprises to venture outside.

Moreover, the Government has set up the Financial Services Development Council ("FSDC") and strive to promote development of innovation and technology in a bid to make up for the lost time. All along, measures like Shanghai-Hong Kong Stock Connect, Shenzhen-Hong Kong Stock Connect, expansion of CEPA and offshore RMB business have concretely benefited the enhancement of traditional industries that have an edge, such as the professional and financial sectors. But a term of five years is indeed short, as many tasks have to be continuously carried out. For example, as mentioned by another Member earlier, FSDC has released 28 reports by now. As far as I know, all these reports are prepared by top talents and experts in the sector with considerable effort, and they worry that these reports will be left aside rather than having the measures actually enforced. Therefore, I urge the next Government to seriously review the role of FSDC. If it cannot duly review FSDC's role, positioning and resources deployment, I believe that these 28 reports will likely be degraded into empty words, disappointing the trade one more time.

On the other hand, we also have to admit that measures proposed by the Government still fail to make any breakthrough in economic structure and overall situation. Many problems and restrictions still exist. Firstly, the dominance of LEGISLATIVE COUNCIL ― 15 February 2017 3761 the property and financial sectors remains, while such traditional industries as logistics, air freight and transportation are faced with severe challenges, and tourism development has reached a bottleneck. Hong Kong's standard of innovation and technology is still not adequate according to many international assessment reports, which is a major limitation restricting our advancement.

Second, SMEs are enduring increasingly difficult moments. Each time when I meet proprietors of SMEs, they relay to me the worsening business environment in Hong Kong. High rents and wage level, manpower shortage, increasing compliance cost and insufficient government support have all constrained their room for development.

Third, Hong Kong's cooperation with the Mainland is subject to more and more resistance, especially under the anti-globalization momentum worldwide, in which a tendency for self-isolation emerges in Hong Kong's society too. Even in this Council there is a trend that Members will oppose any issues related to Mainland-Hong Kong integration. Though I do not agree to such an idea, I am really concerned that this trend will grow.

Fourth, the number of high-paid jobs has been decreasing in recent years. In the last few months, many members from professional sectors felt pity about the difficulties in getting good jobs, saying that they may need to move to Singapore or other places for greener pastures. I am so sorry about the loss of decent jobs owning to an imbalanced development of industries in Hong Kong.

At last, as increases in real salaries were not able to catch up with continuous rises in price level over the last decade, the middle class have been encountering a considerable amount of difficulties. They have to deal with enormous pressure and an exorbitant price level, while many of them have yet to purchase a property. Furthermore, young people still have to deal with a lack of upward social mobility.

President, I will then recap the Government's tasks in land and housing, as well as poverty alleviation and elderly care. Land and housing is the most important issue recognized by the existing Government, and it is just natural that it becomes the focus of all sectors in society. I reckon that this subject is the core of the deep-rooted problems in our city. In the past five years, the SAR Government demonstrated notable determination in raising land and housing supplies. With the SAR Government's review of land use, increase in 3762 LEGISLATIVE COUNCIL ― 15 February 2017 development intensity, continuous land sale and promotion of railway property development, it is projected that the potential supply of first-hand residential properties will reach 94 000 units in the upcoming three to four years, increasing by 45% as compared to five years ago; the estimated public housing production for five years was only 68 900 units than, but the number has increased to 94 500 units today.

In the medium and long run, the Government has devised many methods as well, including new town developments, studies on reclamation on an appropriate scale outside Victoria Harbour and the proposal of artificial islands in the central waters. I believe Members can understand that these projects and ideas aim to plan for land supply in Hong Kong in the medium and long term. Despite the Government's very earnest endeavours, we must confess that current property prices have rendered it very difficult for the people to purchase a flat, while we are still fraught with problems of having a significant number of subdivided units and long waiting time for public housing. Such problems further contribute to inflating cost of business operation (SMEs in particular) and living, discouraging overseas talents and enterprises from coming to Hong Kong.

President, the present SAR Government well understand the troubles caused by the wealth gap and an ageing population to society all along. Regarding poverty alleviation and elderly care, the Government has proposed a series of concrete measures including setting the poverty line, introducing OALA and the Low-income Working Family Allowance, introducing the Guangdong Scheme and Fujian Scheme, as well as lowering the eligibility age for Elderly Health Care Vouchers. Moreover, the authorities have also proposed gradually abolishing MPF offsetting arrangement and adding a higher tier of allowance under OALA, so as to further optimize the retirement protection given to the people.

The SAR Government's policy intervention has achieved certain effects in poverty alleviation. In recent years, the Gini Coefficient has dropped from its peak back to 0.5, yet we must stay alert as the level is still high. According to figures published by the authorities last year, poverty population in Hong Kong stood at 970 000, rising by 9 000, an increase for the first time since 2012 after trending down for two years consecutively. Despite all these efforts devoted by the Government, the figures still indicated that there is no room for complacency.

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President, in a nutshell, I believe the current Government's efforts in promoting the economy and improving the people's livelihood have been effective. In particular, I have to point out that many deep-rooted problems would have worsened if the Government had not made such efforts in land and housing and the people's livelihood over the last few years, and the situation in Hong Kong would have deteriorated, even turned into a crisis.

In summarizing the effectiveness of the SAR Government's work relating to the economy and the people's livelihood over the past five years, I wish to give two pieces of advice to the next Chief Executive and even the coming Government. First, we must insist on sharing the fruits of economic development with the people. Economic development will be meaningless if an increasing GDP means only a widening wealth gap. This kind development will not last long. Therefore, we should alter our established concept of public finance, accurately forecast fiscal surplus, make good use of fiscal reserves and reduce the wealth gap by income redistribution. On the other hand, we should continue supporting enterprises with potential, so that they can make their own contributions to GDP, eventually enabling people from different classes to share the fruits of prosperity.

Second, the Government must get ready for fulfilling its own roles and functions to actively promote the development of various sectors in Hong Kong. We can no longer idle our time away, and must take action where it is right and where consensus is reached. Likewise, we should not allow private enterprises, SMEs in particular, to fight on their own under the pretence of free market. The same applies to issues related to the people's livelihood. As the people hold rising expectation for the SAR Government, it must strengthen coordination and actively respond to problems in society, but not dodging the problems and ducking its responsibilities.

President, although the current Government does not have a long remaining term of office, I still hope it can go on performing its duties and carrying out the policies in the Policy Address for the people. I also expect the next Government to insist on the right course and bear the same determination and commitment against all odds, so as to create a better living environment for the people.

With these remarks, President, I support the Motion of Thanks.

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MS TANYA CHAN (in Cantonese): President, each Member will have 30 minutes to speak on this motion. I understand that the Chairman of my political party has already stated the stance of the Civic Party. In the coming two days, I will mainly speak on three policy areas. First, I will discuss the issue concerning the Hong Kong Convention and Exhibition Centre ("HKCEC") and the Wan Chai Sports Ground, which I already mentioned in the Panel, and Secretary Gregory SO should have heard of it. Second, I will talk about country parks. Third, I will talk about the West Kowloon Cultural District, which I have been following up for quite some time. In fact, I have also been following up the HKCEC issue also for quite a long time. Since I have a chance to speak today, I would like to put on record what I am going to say.

I now have a number of papers on my table, including a verbatim record of the proceedings of the Legislative Council dated as far back as 8 December 1999. Back then, Mr LUI Ming-wah raised a question on the management of HKCEC, and he continued to follow up the issue afterwards. On 5 January 2000, he raised another question about HKCEC. On 4 November 2009, I raised a related question, and on 24 June 2009, Mr LAM Tai-fai, an ex-Member, also raised a written question and it was answered by Secretary Gregory SO.

Which part of the Policy Address mentions HKCEC? This is interesting. First of all, it is mentioned in paragraph 25 under the subject of "Convention and Exhibition and Tourism", falling precisely in the area of economy for which Secretary Gregory SO is responsible. However, HKCEC is mentioned more than once in the Policy Address. HKCEC is mentioned for the second time in paragraph 220 under the subject of "Sports and Culture". In this paragraph, it is said that the Government proposes to use the Wan Chai Sports Ground for comprehensive development in 2019 at the earliest. Apart from convention and exhibition venues, the development proposal will comprise trendy and novel recreation and sports facilities. And the Hong Kong Trade Development Council ("TDC") will conduct a feasibility study on this proposal.

President, we know that TDC is a statutory organization. I have in my hand a copy of the ordinance concerning TDC, under which its main duty is to promote, assist and develop Hong Kong's trade with places outside Hong Kong. The few words of "outside Hong Kong" are clearly written in its English version. But due to unknown reasons, TDC is doing better and better such that the Government even entrusts the HKCEC project to TDC, when HKCEC is obviously located in Hong Kong Island.

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Furthermore, a very significant income source of HKCEC is from the operation of exhibition business, and this work is outsourced to Polytown Company Limited ("Polytown"), a subsidiary fully owned by New World Holdings. I now recapture the details with Members, and this is unlike the replaying of programmes of Asia Television Limited.

The first phase of HKCEC came into operation in 1988, with an exhibition area of about 17 800 sq m. The second phase of operation commenced in 1997, with the exhibition area increased by 28 700 sq m. The Atrium Link Extension ("ALE") came into operation since 2004, with the provision of an additional area of nearly 20 000 sq m. As regards the income that I mentioned earlier, how much income did HKCEC receive from Polytown? President, I do not have a full record concerned, but it is fortunate that some ex-Members have raised certain questions and the degree of transparency back then was quite high. In 1994, for the first contract of HKCEC Phase I, TDC drew an income of more than $20 million. For the second year, it drew an income of over $21 million. From 1996 to 1997, it had an income of over $24 million. In 1997 when Phase II was commissioned, the operating percentages could all be found in the paper that I mentioned earlier. Nevertheless, for reasons that I do not know, after ALE has come into operation, when Mr LAM Tai-fai, an ex-Member, raised a question again in 2009, TDC replied that it was unable to divulge these commercial confidential details.

President, I really do not understand why the transparency of the Government seems to be getting lower. Back in those years, not only did the Government tell us the percentage of income given to TDC as stated in the contract with Polytown, but from the Finance Committee papers in 1993-1994, it also clearly listed out certain important terms in the contract between TDC and Polytown. President, you have been a Member. Before you assumed the position of President, you were a Member, although you are still a Member now. You know how difficult it is for us to ask for papers from the Government. When we ask to solicit some information from the Government, the Government often turns down our requests on the excuse of privacy or commercial secret. But are the contract terms not a kind of commercial secret?

What I would like to say is that TDC is a statutory organization, which is closely related to Hong Kong people and trade development, and these terms can be highly significant. Why can they not be divulged? President, in the present situation, we cannot get blood out of a stone. In the Policy Address, the Chief 3766 LEGISLATIVE COUNCIL ― 15 February 2017

Executive says that by 2028, there will be a shortfall of 130 000 sq m of convention and exhibition venues in Hong Kong. He has quoted some information from a report prepared by the AMR International Ltd titled "Demand Study for New Convention and Exhibition Facilities in Hong Kong". I only have the executive summary of this report in hand, but there are as many as 15 pages for this summary, and the Secretary said back then that there was already a lot of information in it. However, President, we have to be fair. If I say that I am now short of money, people will ask, "How much income do you have? Why are you so short of money? What kind of burden do you have? Let me do some computation for you. You have to support your mother, but you do not have to support any children or a husband …". The expenditure can be calculated. When the authorities, without giving any reasons, say that by 2028, there will be a shortfall of 130 000 sq m of venues in Hong Kong, I will have to know what have been taken into and out of consideration by the authorities, what they have planned to provide and even how they predict the economic development of Hong Kong.

Nonetheless, President, although the growth model is slightly touched upon, there are still some items which I do not know whether the authorities have taken into account. To a certain extent, this summary is rather useful. The Chief Executive has put forward 15 short-, medium- and long-term measures to cope with the shortfall of convention and exhibition venues―"putting forward many short, medium and long-term measures" is a favourite refrain of "689"―and one of these measures is to build a convention and exhibition venue above the Exhibition Station. However, as far as I know, it will be used for convention but not for exhibition purpose. If it is only used for convention purpose, where will the exhibitions take place? In respect of exhibitions, they are targeting at the Wan Chai Sports Ground.

President, after reading these 15 short-, medium- and long-term measures―President can also take a look at them―I notice that the Wan Chai Sports Ground is not mentioned in any one of these short-, medium- and long-term measures, but this Sports Ground is now being sacrificed for no reason at all. What is more, the Government cannot wait till 2028. It now says that convention and exhibition facilities will be developed there in 2019. What are the reasons?

It is very obvious that AsiaWorld-Expo has a strong point that the existing HKCEC can never have, and that is providing a vast and spacious place with not too many columns and thus can serve multiple purposes. President, my mother LEGISLATIVE COUNCIL ― 15 February 2017 3767 had been engaged in trading business and I followed her to attend some exhibition activities. We have been to some overseas exhibition venues which are vast and seemed endless without a lot of escalators. HKCEC in Wan Chai obviously does not have this advantage as visitors need to take escalators up two to three levels or even six levels. Nevertheless, if the Wan Chai Sports Ground can be made use of, the situation will be different, President.

President, this is not a new proposal. The Government appeared to have considered making use of the Wan Chai Sports Ground as early as 2007. At that time, the authorities wanted to take the land sites of the Wan Chai Sports Ground, Wan Chai Indoor Games Hall, the training pool and bus terminus. The bus terminus is already gone now, as it has become a construction site for the Exhibition Station of the MTR Corporation Limited ("MTRCL"), where President may have passed by when travelling in a vehicle. The indoor games hall is still there. If I recall correctly, the training pool is no longer there. And a corner of the Wan Chai Sports Ground has already become a storage area of MTRCL.

President, the Wan Chai Sports Ground is precious to us and it is more than a site of collective memory. We can notice from the papers of the Wan Chai District Office that its utilization rate for various usages during peak hours is nearly saturated, basically and constantly reaching over 90%. Besides, despite the commissioning of the Central-Wan Chai Bypass, can it really cope with the traffic flow? President, even though there is already a large-scale sports ground in Tseung Kwan O at present, the demand for using the Wan Chai Sports Ground has still not been reduced.

There are only three sports grounds in Hong Kong Island. For Siu Sai Wan Sports Ground, since it is too near to the residential areas, there may be noise nuisance sometimes. Concerning the Aberdeen Sports Ground in Wong Chuk Hang where I often went when I was in the secondary school, frankly speaking, it can only be used for holding small-scale activities as the area is really limited. For a school of scale and brilliant field sports performance, it is actually very difficult to hold a large-scale athletic meet there. That is why the Wan Chai Sports Ground is a favourite place for schools. Its other feature is the proper wind direction, and thus recognizable and qualifying athletic records can be set in Wan Chai Sports Ground, which may not be possible in Tseung Kwan O Sports Ground. Therefore, whether judging from the natural environment or the location, the Wan Chai Sports Ground is an indispensable place for both the academic field and athletic field.

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A marathon was held last Sunday. As we notice, a race for three generations of the same family was precisely held in the Wan Chai Sports Ground. In this Policy Address, why does LEUNG Chun-ying―I am not questioning the gate-keeping efforts of the Secretary―set an eye on the Wan Chai Sports Ground? I think he is really excessively greedy. We once had a chance to turn down the proposal. But it is a pity that the authorities revive this proposal under the pretext of providing "trendy" and community facilities, thinking that they can get their own way.

I am now holding the outline zoning plan of Wan Chai North. It is fortunate that the Wan Chai Sports Ground is still a "Government, Institution or Community" site. Of course, first of all, it does not have height restriction, and this may be a reason for it to be under consideration. Nevertheless, why should community facilities be developed there? Do the authorities think that the proposal with such facilities need not go through the Town Planning Board ("TPB")? This is, however, not what we see.

President, what we see is that the proposal on the development of convention and exhibition facilities, whether above the Exhibition Station or in the Wan Chai Sports Ground, has to be submitted to TPB. However, I have to remind the Government not to regard the consultation conducted after its submission of the proposal to TPB as the only public consultation. It is true that this is a public consultation required under the law. But if the Government fails to conduct a proper public consultation at an early stage before its planning and submission of the proposal to TPB, it will also meet a lot of opposition at TPB. Even when the proposal can obtain support from 95% of members of TPB, there will also be problems if the legal requirements are not properly complied with.

The Secretary is not present at this moment. Secretary LAU Kong-wah should be able to recall this experience concerning the Tsim Sha Tsui Waterfront Revitalization Plan shortly after he has assumed office. In fact, that area is always full of vitality but I only find him obstinate. He planned to carry out some revitalizing works and outsourced the project to New World Development Company Limited. Later on, a developer filed an application for judicial review. I am not sure whether that plan was finally rejected due to this reason.

However, I have to make it clear that the Wan Chai Sports Ground has to remain in service. Before identifying any replacement facilities, the Wan Chai Sports Ground should not serve other purpose or be demolished. I do not LEGISLATIVE COUNCIL ― 15 February 2017 3769 understand why Hong Kong always has to give priority to commercial interests. The Government often talks about promoting sports in the community. But it is now destroying the most important sports ground which can be regarded as a cradle for Hong Kong top-notch athletes. Destroying Wan Chai Sports Ground for the sake of commercial interests is absolutely unacceptable to us.

I will speak on other policy areas later. Thank you, President.

MR CHAN CHUN-YING (in Cantonese): President, after Chief Executive LEUNG Chun-ying's announcement that he will not seek re-election, and as those intending to run in the Chief Executive Election roll out their respective political platforms, we cannot help asking just how many policies set out in the Policy Address this year will be carried forward by the next Chief Executive after his or her coming to power. Or will there be a complete reversal of these policies? We just don't know. As a Member representing the finance functional constituency, I consider that the continuity of financial and economic policies should be maintained. No matter who is elected the next Chief Executive, he or she should seek to enhance and improve the status of Hong Kong as an international financial centre.

For 30 years or so, we Hong Kong people have been proud of our status as an international financial centre, and this is actually a hard-earned reputation. The financial industry is one of the four major pillar industries of Hong Kong, which accounts for one-sixth of our GDP. It also offers almost 250 000 posts, so its contribution to Hong Kong's economic development is very substantial. Although the Policy Address does not say much on this, it still rolls out several major initiatives. I hope the present Government and the next Chief Executive will both push ahead with the following areas.

First, I wish to discuss the direction for sustaining the development of Hong Kong's financial industry. Just now Mr Kenneth LEUNG and Ms Starry LEE both mentioned the Financial Services Development Council ("FSDC"), and my first point happens to about FSDC as well. FSDC was founded in 2013. It aims to promote the further development of Hong Kong's financial services industry and map out the direction for its development. It is mentioned in the Policy Address this year that the Government will allocate further resources to support the work of FSDC.

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As far as I know, FSDC has pooled together the best financial talents in Hong Kong, and these people have compiled 26 research reports for FSDC over the past three years on a voluntary basis. However, some of the recommendations have not been treated with any importance. Just now, Mr Kenneth LEUNG mentioned the statutory role of FSDC. I consider that the role of FSDC should not be limited to that of a policy research body or a policy proponent, and it should become a policy promoter. However, the reality is often quite different. At present, the staff of FSDC are all on secondment. Some time ago, FSDC wanted to recruit an executive director and put forward a funding request to the Legislative Council. But some said that FSDC was just the baby of LEUNG Chun-ying and queried whether FSDC could continue to exist after the government changeover. As a result, I just do not know when this new post can be created.

As I said at the beginning of my speech, no matter who is elected the next Chief Executive, he or she should seek to enhance and improve the status of Hong Kong as an international financial centre. For that reason, I am disappointed that the funding request concerning the post of executive director in FSDC has simply vanished after all the criticisms. Maintaining the status of an international financial centre needs long-term planning. We should not stick to defensive strategies all the time without launching any offensive. I hope financial officials can pay full attention to this and endeavour to bring forth actual investments of manpower and material resources, so as to enable FSDC to function effectively.

Second, I hope the Government can grasp the opportunities arising in the short- and medium-run. The first opportunity is the prospects brought by Belt and Road. The Policy Address this year devotes an entire chapter to Belt and Road. Last year, the Chief Executive already appointed the Commissioner for Belt and Road. Nevertheless, the tenure of the Commissioner will expire by the end of June this year. The Chief Executive mentions in the Policy Address this year that the Government will beef up the establishment and resources of the Belt and Road Office to ensure that it can take forward the relevant work on a long-term basis.

It is widely known that the economic aggregate of Belt and Road countries accounts for more than 30% of the global aggregate, totalling US$21 trillion. The importance of this first opportunity is therefore evident. However, we know very little about the work progress of the Belt and Road Office. At the same LEGISLATIVE COUNCIL ― 15 February 2017 3771 time, the Infrastructure Financing Facilitation Office was established under the Hong Kong Monetary Authority to drive and promote investment and financing plans relating to infrastructure projects along Belt and Road countries. I think the Government needs to integrate the existing resources, and the top echelons of the Government should lead various local investors in the efforts to enlarge both the number and scope of mutual visits between Hong Kong and Belt and Road countries, with a view to driving and promoting the export of those services of ours that enjoy an advantage, such as infrastructure financing, infrastructure design, legal services and arbitration and accounting.

The second opportunity is the development of off-shore Renminbi ("RMB") business. Recently, many people are worried that the depreciation of RMB may affect the development of off-shore RMB business in Hong Kong. The reason is that as shown by statistics, there was a decline in all major RMB business indicators in Hong Kong in 2016. For example, as at the end of last year, the amount of RMB deposits in Hong Kong was $546.7 billion, a decline of 35.8% compared with the figure at the end of 2015. The total remittance of RMB for cross-border trade settlement amounted to RMB 287.6 billion, a year-on-year decline of 56.9%. The issuance of Dim Sum Bonds amounted to $42.2 billion, a year-on-year decline of 49.8%. The RMB real-time gross settlement amounted to $15.16 trillion, a year-on-year decline of 25.3%. According to the data of the Society for Worldwide Interbank Financial Telecommunication (SWIFT), the value of international RMB payments in 2016 fell by 29.5% when compared with 2015.

The status as the biggest off-shore RMB market in the world has along enabled Hong Kong to perform the irreplaceable role of providing a new channel for the entry of off-shore investments into the China market, and to enhance our role in the liberalization and development of the Mainland financial markets. Nevertheless, in view of the reform of the RMB exchange rate regime, the Mainland has adjusted its cross-border RMB policies. Some of the measures limit the outflow of RMB capitals, and this has caused a drop in corporate treasury services and Hong Kong's off-shore RMB business.

In fact, following the International Monetary Fund's inclusion of RMB in its Special Drawing Rights currency basket in October last year, RMB will change in function, evolving from an international payment currency and a currency for foreign exchange trading and settlement to an international reserve 3772 LEGISLATIVE COUNCIL ― 15 February 2017 currency. It is estimated that the proportion of RMB assets in global official foreign currency reserves will increase from 1.8% last year to 4% or 5% in the coming three years, amounting to US$330 billion. The Mainland will continue to promote the opening up of capital accounts and the internationalization of RMB, and all these will provide opportunities and room for development for Hong Kong's financial industry. Therefore, I hope the Government will take active steps to promote the work in this area. Regardless of which organization is to take up the task―FSDC as discussed in the Policy Address or the Hong Kong Trade Development Council―efforts must be made to promote the cooperation of all sides, so as to turn Hong Kong into an RMB trading centre for central banks and sovereign funds all over the world in their business of RMB reserves and assets management and RMB bond trading.

The third opportunity is mutual market access for Hong Kong and Mainland financial products. The proportion of foreign investors in China's local bond market is obviously very low when compared with the western world. It can be said that there is still room for improvement. As to the mutual market access for Mainland and Hong Kong financial products, after the implementation of the "Shanghai-Hong Kong Stock Connect" and "Shenzhen-Hong Kong Stock Connect", the Government should speed up mutual market access for more financial products. Few days ago, Secretary Prof K C CHAN mentioned on an occasion that "ETF Connect" for exchange traded funds will be put in place very soon. I think mutual market access for other products, such as for bonds and funds should be implemented as soon as possible.

As to FSDC's proposal on the Mainland-Hong Kong Bond Market Connect, it allows mutual market access for both over-the-counter bond market and exchange-traded bond market. But the latter is only limited to retail investors, which is insufficient to meet the needs of institutional investors. The Government should fulfil its role as a connector by providing clearing agency services, and so on, for off-shore investors.

The fourth opportunity arises from the intensification of the mutual recognition of funds ("MRF"), which can enhance the position of Hong Kong as an asset management centre.

MRF between Hong Kong and Mainland was implemented about one year ago. The total sales of "Northbound Funds" (qualified public funds domiciled in Hong Kong recognized and offered in Mainland China) in the first 11 months of LEGISLATIVE COUNCIL ― 15 February 2017 3773 last year already exceeded RMB 10 billion, showing that Mainland investors have a keen demand for portfolio allocation outside China.

Under the MRF arrangement between the Mainland and Hong Kong, only qualified public funds registered in Hong Kong can apply for recognition in Mainland China. The arrangement has encouraged fund managers to make Hong Kong the fund domicile and to attract global assets management companies to develop business in Hong Kong.

In December 2016, Hong Kong and the Switzerland concluded a MRF scheme which allowed Hong Kong public funds to be introduced to Swiss investors. The recognition by the Swiss Financial Market Supervisory Authority is a testament to Hong Kong's stringent and effective fund management regime. Besides, of all Asian funds, only Hong Kong funds are recognized by a European market.

As far as I know, there are three conceptions in the Asia-Pacific Region now, and of them, the "Asia Region Funds Passport" (is a region-wide initiative for MRF) may be implemented. Now that Hong Kong possesses the edge of having connection with the Mainland and Switzerland, I hope the Government can strive for a bigger leadership role for Hong Kong in the Asia Region Funds Passport initiative.

The fifth opportunity is the opportunity of seeking to play a more important role in the Asian Infrastructure Investment Bank ("AIIB").

As stated in the Policy Address, Hong Kong will become a member of AIIB. Nevertheless, our goal should not be limited to the setting up of an AIIB office in Hong Kong. It should not be limited, too, to the establishment of the Treasury Management Centre of AIIB as advocated by Secretary Prof K C CHAN earlier. Once AIIB is founded, it will focus on the infrastructure investment of developing countries, such as power and water supply facilities, railways, telecommunications, and so on. AIIB members who extend loans to developing countries for infrastructure construction will also grasp the opportunity to let their own enterprises and experts participate in the construction projects of these countries. Through government loans and corporation contractorship, AIIB members will participate extensively. As many business opportunities will arise from participation in developing country projects, the 3774 LEGISLATIVE COUNCIL ― 15 February 2017

Government should actively joins hands with local investors to strive for participation in AIIB projects, including the provision of loans and various projects of development and construction.

The third thing I wish to discuss is the continuous improvement of Hong Kong's financial infrastructure.

The first thing about the financial infrastructure is to strike a balance between the compliance with international regulatory standards and market development.

With the continuous tightening of international standards on anti-money laundering and counter-terrorist financing, banks must conduct very stringent due diligence checks on their customers. As a result, local and foreign enterprises, new companies and even individuals have been complaining about the difficulty in opening a bank account. This has undermined Hong Kong's reputation of facilitating business operation.

I consider that we should create a regulatory environment which is conducive to the stable development of the financial industry. We should make sustained efforts to streamline regulatory measures, so as to strike a balance between business flexibility and security concerns.

The Government should clarify the spirit of the relevant legislation through different channels. I hope that besides stepping up anti-money laundering education, the Government can expeditiously complete the study on setting up a centralized database of customers, so that banks can supply information in standardized formats to a professional intermediary platform and assist in collecting information about bank account-openers. On the part of customers, they can authorize banks to access their information in the database. This will save customers the trouble of having to provide the same information repeatedly, thus making the bank account-opening process much smoother. In this way, it will be possible to meet international regulatory standards on the one hand, and to benefit the financial industry on the other.

The second point about the financial infrastructure is the promotion of exponential Fintech progress.

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As the saying goes, a boat moving upstream must keep forging ahead, or it will be driven back. The Global Financial Centres Index 19 rates Hong Kong as one the four global financial centres, among the ranks of London, New York and Singapore. Both the Heritage Foundation of the United States, with its headquarters in Washington, and the Fraser Institute, a Canadian think tank, have rated Hong Kong the freest economy in the world for 22 consecutive years.

However, the competition between Hong Kong and Singapore has become rather ferocious in recent years, particularly in Fintech development. Singapore has been providing all sorts of complementary measures in taxation in order to facilitate business operation and induce multinational companies to set up business headquarters in Singapore. In November last year, the world's Largest Fintech Hub, "LATTICE80" set up a centre in Singapore, and R3 (a global blockchain technology consortium) has also set up its operation at "LATTICE80".

In the past, Hong Kong was the hare in race between "the hare and the tortoise". Now, it has become the tortoise moving at a snail's pace. Although the race is not yet over and we do not know the result, we should have a sense of crisis in order to maintain the competitive edge of Hong Kong. I hope the Government will not feel complacent with the recent small achievement in Fintech so far, as the levels of our Fintech in certain areas are still quite low. We must rise and catch up in order to join the bandwagon of rapid Fintech development.

In order to further promote Fintech development in Hong Kong, the Government should adopt an incremental approach of gradually relaxing the regulatory policy. Just now, many colleagues have mentioned Hong Kong Monetary Authority's Fintech Supervisory Sandbox, I think it is a good start. This initiative can encourage and induce local banks to speed up their innovations, so it should speeded up. Another thing is to encourage cross-sector cooperation. In recent years, the trend of cooperation between venture capital enterprises ("VC enterprises") and financial institutions has gradually taken shape. VC enterprises have innovations, but if there is no setting for them to apply their innovation, they will only be confined to technological research. On the other hand, the application of innovative technology is not the strength of financial institutions. For that reason, a win-win situation will be achieved if the two sectors are effectively combined and innovative ideas are applied to the products or services in the financial market.

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The third thing about the financial infrastructure is that the Government should make strong efforts to attract financial professionals.

Talents are of utmost importance in sustaining the development of our financial industry. Here, I must mention the President of the United States, Donald TRUMP. Several days ago, he issued a travel ban on citizens from seven Islamic countries. The ban will directly impact the Silicon Valley, the cradle of technology in San Francisco. It is because according to research data, three quarters of all computer and mathematic professionals in the Silicon Valley aged under 45 are not born in the United States.

Likewise, the development of Hong Kong's financial industry needs the help of professionals from other places. For that reason, the Government should formulate more packages for attracting talents and professionals, so as to create a larger pool of talents for sustaining the development of Hong Kong's financial industry. For example, the Government may provide suitable support for Fintech professionals, such as taxation concession and discounted office space in order to encourage more capable people to join the innovative financial industry.

The fourth thing about the financial infrastructure is to complete the tax concession arrangement in a timely manner, so as to make it a driving force to promote the development of a new financial industry.

The present fiscal reserves of Hong Kong are over $800 billion. Our financial officials have of course explained over and over again that due to the changes in Hong Kong's demographic structure, the Government's financial burden is and will be very heavy, and this will ultimately use up the reserves. But I would think that before the using up of our reserves, there should still be some leeway, so we should use the reserves for investments in Hong Kong's future as early as possible, so as to create a much more robust economic foundation. Over the years, the industry has been urging the Government to follow Singapore's practice of offering taxation concession to assist the development of a new financial industry and to create new sources of revenue.

The Government has amended the Hong Kong Inland Revenue Ordinance, which now provides for a concessionary rate of 8.25% on qualifying profits of a qualifying corporate treasury centre ("CTC"). The move has succeeded in gradually inducing certain enterprises to establish CTCs in Hong Kong. Nevertheless, the Government needs to adopt an even more flexible and LEGISLATIVE COUNCIL ― 15 February 2017 3777 ambitious tax regime, so as to introduce to Hong Kong certain industries which it has potentials to do well, but which it has not yet been able to develop. For example, the Government now intends to amend the relevant legislation to reduce the profit tax for aircraft leasing companies, with the aim of snatching this type of lucrative business from leading market players such as Ireland and Singapore. I hope the Government will relax all the restrictions in this regard and implement the relevant measures as soon as possible. Besides, the candies handed out should be sweet enough to induce companies to do business in Hong Kong.

The fourth point I wish to discuss is the provision of assistance to the development of Hong Kong's small and medium enterprises ("SMEs").

It seems that this issue does not have any direct relationship with the financial industry. But the fact is that SMEs account for more than 98% of local businesses and provide 1.3 million job opportunities, making up 46% of the total workforce of Hong Kong. SMEs are the major source of Hong Kong business activities. They are the basic clients of the banking industry and the pillars and foundations of Hong Kong's financial transactions.

Unfortunately, this time around, the Policy Address fails to mention how SMEs should be helped. Ms Starry LEE has rightly mentioned in her speech that the Government should provide SMEs with more supportive measures. I have all along been urging the Government through various channels to improve the financing plans for SMEs. In the meantime, some programmes set up by the Government to support SMEs will soon come to an end, but even now, we cannot see any new development direction. The Government should further study the enhancement of various financing plans for SMEs, so as to provide more flexibility to increase the participation of SMEs and banks.

President, in order to share the fruit of Hong Kong's economic development with the public, the current-term Government has proposed a number of policies to narrow the wealth gap. I believe very few people will oppose that. Nevertheless, such policies should be complemented by the allocation of large amount of resources. Given the uncertain prospects of the global economy, and the fact that the economy of many countries are recovering only very slowly, we should keep on identifying new points of economic growth for Hong Kong in order to support and complement our economic growth. Hong Kong's financial industry is one of the traditional industries with competitive edge. Our sound infrastructure facilities, legal system, tax regime, 3778 LEGISLATIVE COUNCIL ― 15 February 2017 bilingual proficiency and talents are all our advantages. If we can do some deep ploughing and careful cultivation, the economic benefits so generated should be able to support the sustainable development of Hong Kong. It is only by so doing that Hong Kong's status as an international financial centre can be enhanced and elevated.

I so submit. Thank you, President.

MS CLAUDIA MO (in Cantonese): First, I must make it clear that to me, this is a "Farewell Motion" rather than a "Motion of Thanks", because we are so infuriated by LEUNG Chun-ying that we all want to send him quickly away with a loud bang of firecrackers. The five-year administration of LEUNG Chun-ying has brought to Hong Kong a five-year catastrophe. Finally, even Beijing has come to realize that his bellicose nature and approach of inciting infighting among the people all run counter to the policy of harmony, which it flaunts and calls on us to implement under the principle of "one country".

During LEUNG Chun-ying's campaign in the Chief Executive Election in 2012, I had an opportunity to ask him a question about freedom of the press in an election forum. His reply was that press freedom must not be infringed upon as it was the pillar of society and the cornerstone of a civilized place. However, can we see what he has done over the past five years? Well, newspapers, writers, academics and intellectuals who have not received a lawyer's letter from him should feel grateful for their sheer luck.

However, what worries me more today is cyber freedom. We now hear them talk about innovation and technology and brag about the Loop development, and so on. But when asked about the details and particulars, the Secretary for Innovation and Technology could not give any answer to all questions and simply tried to excuse himself by saying that more would be said around March. What is the point of discussing a smart city? The Government is not even willing provide the Big Data in transport and traffic, and the expected arrival times of buses are never accurate. So, we may run all the way to a bus stop, only to find that the bus we want to take has already departed. Or, we may think that we can take the bus we see upon arrival but find ourselves still waiting five minutes later. May I ask what kind of smart city it is?

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On cyber freedom, what worries us more is section 161 of the Crimes Ordinance on access to a computer with dishonest intent, which stifles freedom of speech and expression in the cyber world. We can look at the figures here. In 2011, there were 34 prosecutions and 32 convictions, just two cases short of the full conviction rate. The situation in 2013 was the same, with 55 prosecutions and 50 convictions, just five cases short of the full conviction rate. The charge is so scary! He talks about innovation and technology, saying that our city must be the vanguard. But what vanguard does he mean? In the words of a fellow Member just now, he talks about innovation and technology on the one hand and tightens cyber control over on the other. So, apart from reminding us of the ugly aper of a beauty, all his talks only make him look like such a slow little tortoise in the race.

I talked about the situation in 2013 just now. Actually, in 2014, the Police started to make arrests by invoking this provision on access to a computer with dishonest intent. For example, it was invoked to prosecute people who had allegedly called on others on the Internet to take part in so-called unlawful assemblies. This makes us feel that in Hong Kong, free expression on the Internet is liable to arrest and prosecution at any time under section 161 of the Crimes Ordinance. How can he still have the face to talk about turning Hong Kong into another Silicon Valley. How can we believe him?

I have mentioned that the conviction rate of such prosecutions is very high. I know very well that government officials will surely ask people not to worry, and judges will also say that arbitrary arrests and prosecutions are not likely, because the prosecution and conviction thresholds under the Ordinance are very high. Also, we will surely be asked not to worry about any abuses, as the conviction rate was higher than 90%. But the point is that the conviction rate of arrests made under this Ordinance during or after the Umbrella Movement is on the low side of merely about 15%. The low conviction rate actually shows that like its counterparts in the rest of the world, the Ordinance is originally meant to protect Internet users against hacking and prevent cyber offences and scams involving money and sex. It is just about the prevention of such money and sex crimes. But it is now used as a tool to achieve a political purpose in Hong Kong.

Over the past four years, some Members have repeatedly asked for a review and amendment of the Ordinance in the Legislative Council. However, the Government has ignored them completely, because the Ordinance can be used 3780 LEGISLATIVE COUNCIL ― 15 February 2017 conveniently at any time for the purpose of political suppression. This is in fact the very point the Government wants the public to note, and in this sense, the low conviction rate is really not a concern at all as long as people can thus be scared. This is just like his sending of lawyer's letters to newspapers. In the end, he did not instigate any prosecution, but his move could already serve to intimidate in one way or another, as the newspaper or writer concerned was made the target of the whole Government. These days, the Police will always arrest a person first because under this Ordinance, after arresting the person and bringing him to a police station, the Police can detain him for 48 hours to take a statement, search his home, check his computer and mobile phone, and even prohibit him to leave Hong Kong. All this will affect people's work, studies and daily lives. The very point here is precisely the fear thus generated. Such is an abnormality in our civilized society today, so I hope the Government and, more importantly, Chief Executive Election candidates, can seriously consider the matter. I believe that any candidate who can make a solid pledge to review the Ordinance will win the applause and support of many people.

The reason is that even judges can do nothing about the extent to which the Ordinance is abused. Under this Ordinance, the Government can really institute prosecutions in court. True, judges may well refuse to give approval to the conduct of any hearing, prosecutions may be ruled invalid, and the accused may walk free in the end. But we can still imagine the fear generated in the process. Therefore, can this Ordinance be amended to restore its original intent of preventing Internet frauds and hacking? Thank you.

MR JEFFREY LAM (in Cantonese): President, the policy philosophy of the Policy Address this year is "developing the economy and improving people's livelihood". It actively raises various economic and livelihood concerns felt by different social sectors and responds to some aspirations of the business sector. We approve of this. We also look forward to seeing some fiscal measures in the Budget next week which can offer concrete assistance to Hong Kong's economic development and small and medium enterprises ("SMEs"). Hong Kong has no lack of talents and resources. The only problem is that we must find out how we can develop and make good use of them. The Policy Address says "Make Best Use of Opportunities". Leveraging on the Mainland, we should seize the good opportunities and maintain a favourable business environment. We should first of all expand and strengthen our economy so that we can inject more resources LEGISLATIVE COUNCIL ― 15 February 2017 3781 for its development. I thus think that how the Government makes use of the money and opportunities will have a great impact on our economic development.

President, with the withdrawal of the United Kingdom from the European Union and Donald TRUMP's election as the President of the United States, in the external environment and the economic outlook of Hong Kong are faced with uncertainties, and people express worries about what will happen this year. Therefore, apart from implementing the initiatives in the Policy Address, the Government should also put in place different risk management measures to cope with different scenarios, so as to maintain public confidence. After all, 98% of the enterprises in Hong Kong are SMEs. In recent years, the drop of inbound visitors has affected the retail industries of Hong Kong. The export trade is also adversely affected by the external environment or global economy and is facing ever-increasing manpower cost. The increase in regulatory legislation has also raised their expenditure and added to their cost burden.

I will take the minimum wage as an example. The implementation of the statutory minimum wage has the greatest impact on them. In this regard, the Hong Kong General Chamber of Commerce ("HKGCC") has put forward a number of recommendations. In its opinion, the Government has to keep the regulation and cumbersome procedures to the minimum, and maintain a low tax regime so that Hong Kong can continue to develop further. I think the Government can carry out some SME supportive measures in two aspects. Firstly, it can help boost the liquidity of SMEs; and secondly, it can help SMEs reduce operating cost.

President, owing to economic uncertainties, the Government should do more to help SMEs, such as increasing the amount of grant and streamlining the application procedures under the SME Development Fund. In fact, these have been mentioned by us many times, but not much is said in this Policy Address in this regard. Therefore, as I said earlier, I hope that there will be more support to SMEs in the Budget next week. In fact, SMEs should be given more flexibility to make multiple applications for the assistance under the above measures. Besides, the authorities can also raise the amount of subsidy under the SME Export Marketing Fund, and can even relax the geographical restriction so that SMEs can be benefited when participating in exhibitions no matter held in the Mainland or in Hong Kong.

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As regards the SME Financing Guarantee Scheme, I think it is necessary to further extend the application period for the 80% Guarantee Product in the Special Concessionary Measures under the Scheme, and to further streamline the application procedures. Besides, the Special Loan Guarantee Scheme should be relaunched when necessary. As we can see, the economic outlook is uncertain this year and there will be interest rate rises.

On the other hand, both the Business and Professionals Alliance for Hong Kong and HKGCC are striving for the introduction of a two-tier profits tax regime. HKGCC also proposes to reduce the standard tax rate concerned to 15%, and reduce the tax rate for the first $2 million of the taxable profit to 10%. The Government can consider introducing enterprise allowances so that enterprises can plough back the tax-savings for further development. This can in return create more job opportunities and increase income. In this way, the Government can offer assistance to SMEs and also give support to the middle class.

We propose to raise the basic allowance to $150,000, and offer a salaries tax rebate to taxpayers, subject to a ceiling of $25,000. Besides, HKGCC also thinks that the existing double stamp duty imposed by the Government on transactions relating to non-residential properties is impeding the development of enterprises. We are of the view that if we are to achieve any economic progress, Government should not depend on such "harsh measures" to curb the rises of property prices all the time.

President, I am delighted to see that the Loop problem is now resolved and the Hong Kong/Shenzhen Innovation & Technology Park finalized. Research and development in science and technology will have certain help to our education, commerce and industry. In addition to subsidizing research and development, and setting up dedicated platforms and centres in science and technology, the Government also needs to allocate more resources for this aspect of development. In the Policy Address, the Government also mentions offering tax and financial concessions to attract innovation and technology enterprises. In recent years, we see the emergence of many financial technology start-ups in Hong Kong, and HKGCC thus proposes the introduction of a 200% mega tax allowance for the research and development expenditure of enterprises. I hope that the Government can accept this proposal, because this can induce new enterprises to Hong Kong and also assist our SMEs and overall enterprises in Hong Kong to develop in new and high technologies.

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President, opportunities are for the people who are prepared. Those who always criticize but do nothing will not achieve anything. If they always obstruct the Government in carrying out some measures beneficial to the economic development of Hong Kong, it will be difficult for Hong Kong to move forward. Hence, opportunities are for the people who are prepared. We have to be prepared, and the Government should properly grasp the various opportunities that we can see at present, including the opportunities brought from the National 13th Five-Year Plan and the Belt and Road Initiative. The Policy Address mentions that Government will continue to cooperate closely with the Guangdong Provincial Government so as to better seize new opportunities for Hong Kong people and enterprises to start business, pursue employment and further career. This will be a good opportunity for SMEs to attract more customers and explore business opportunities in the Mainland.

As HKGCC has highlighted, during the period between 2015 and 2020, Asia will need to invest US$750 billion in infrastructure every year, but the existing multilateral development banks cannot meet such a colossal demand for capital. This precisely is a very good opportunity for Hong Kong to capitalize on our inherent advantages as an important financial centre. I thus hope that the Government of the Hong Kong Special Administrative Region can strive to join the Asian Infrastructure Investment Bank ("AIIB") as soon as possible, and to convince AIIB to set up a treasury centre in Hong Kong, so that our status as an international financial centre can be enhanced and more enterprises will be attracted to come to Hong Kong. Therefore, I hope that there will be profits tax concessions for those enterprises which will set up companies in Hong Kong for such development in the future, as I think this will attract more overseas investors to set up companies or even regional headquarters in Hong Kong. While all these developments can provide impetus to growth of the financial industry in Hong Kong, I believe that other industries will also have better development. In my opinion, the Government has to listen more to the voices from the industries and different stakeholders. It should study how to improve the profits tax system and certain concessionary measures, how to step up economic and trade cooperation and relations with the Belt and Road regions, and how to improve other trade facilitating measures.

President, I so submit.

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MR HO KAI-MING (in Cantonese): President, economic development has always been an important concern of the public, as good economic development and employment prospects are closely related. For that reason, the Hong Kong Federation of Trade Unions ("FTU") has always advocated an economic development strategy that gives priority to employment. FTU hopes that the Government can implement industrial diversification, with a view to creating more jobs and broadening the prospects for the Hong Kong economy.

Over the past 20 years, the Hong Kong economy has faced the persistent hollowing out of industries. Since the massive northward shift of our manufacturing industries in the 1980s, our real economy has been completely hollowed out. The financial and property development industries have come to dominate the Hong Kong economy. According to figures, services industries accounted for 88.5% of Hong Kong's total employed population in 2014, while manufacturing industries accounted for a mere 2.8% only. These figures highlight the complete hollowing out of the Hong Kong economy. This development trend cannot provide diversified job opportunities, and in addition, it has also aggravated income disparity and added to the income stagnation of employees. For that reason, FTU has always maintained that if we are to enrich Hong Kong's economy, we should redevelop Hong Kong's real economy and promote the re-industrialization of Hong Kong.

President, I have recently visited a manufacturer of high-end fashion products in Tuen Mun. Having a brand name of its own, this manufacturer itself does all the work from design to manufacturing, and from manufacturing to sales. However, the management of this manufacturer all lack any confidence in Hong Kong's prospects. They criticize the Government for failing to provide any policy support. It is regrettable that even such a local brand-name manufacturer finds the prospects for Hong Kong so very grim. It is even more regrettable that the Government has all the time placed the emphasis of re-industrialization on high-end, cloud-based and high value-added projects, showing an apparent lack of attention to light industrial products that are equally high-tech and high value-added. As a result, the re-industrialization policy can hardly benefit the manufacturing sector and cannot create jobs for grass-root people.

I wish to emphasize that FTU surely welcomes the Government's move to develop innovative technologies. However, I also hope that re-industrialization can focus not only on hi-tech industries but also on developing advanced LEGISLATIVE COUNCIL ― 15 February 2017 3785 manufacturing industries, so as to re-vitalize the light industries of Hong Kong. We believe advanced manufacturing industries and innovative technologies are complementary to each other.

Germany is an example we often refer to. Innovative technologies in Germany have already reached a very mature stage of development based on numerous advanced manufacturing industries, in particular light industries. These advanced manufacturing industries make a wide range of products comprising famous kitchenware, pharmaceutical products, sporting goods, skincare products, apparel, spectacle lenses and stationeries. Even the baby formula milk that my son is going to eat may also be made in Germany. These high-quality products have helped to turn "made in Germany" into a brand name of lasting international repute. The confidence generated by these daily-use products can help Germany to successfully develop innovative technologies without much efforts.

If we can give "made in Hong Kong" the lustre it used to have as a famous brand name, it will be very easy for our high-tech manufacturing industries to gain a place in different markets. For that reason, the development of advanced manufacturing industries is not backtracking. Rather, it will add value to the "made in Hong Kong" brand name and provide the foundation and atmosphere for innovative technologies.

Besides adding value to the Hong Kong brand name, the development of advanced manufacturing industries and re-vitalization of local light industries can also help Hong Kong to build up a talents pool for the development of innovative technologies. There is a serious shortage of industrial talents in Hong Kong. For example, as we observed when visiting the fashion manufacturer mentioned just now, it is no longer easy to come by any female garment factory workers. Despite the existence of the Clothing Industry Training Authority, there is still a shortage of workers to fill many front-line, bottom posts.

Because of the northward shift of our manufacturing industries in the 1980s, skilled workers in various industries have had to change their occupations. Many of them have probably switched to occupations of security guards or domestic helpers, thus leaving their skills idle. This has also emptied the entire talents pool. Therefore, is it possible to persuade young people to join the manufacturing industries now? They simply cannot see any prospects.

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For that reason, if it is the policy of the Government to re-vitalize the light industries, it needs to re-build the necessary atmosphere in society. It is after we have done so that we can once again make efforts to persuade young people to join the industrial sector. If the new blood can stay permanently in the industrial sector, they may enrich the talents pool and manpower resources of Hong Kong in these areas. In this way, we need not start all over again like what we are doing now.

President, in fact, re-industrialization is promoted in many places with a view to re-vitalizing manufacturing industries and prompting the return of industries. The clearest example is effort of the newly-elected United States President, Donald TRUMP, to make all American brands move their production plants back to the United States. For that reason, FTU urges the Government to develop advanced manufacturing industries and re-vitalize light industries. In respect of the re-industrialization policy, it should encourage and induce manufacturers to stay in Hong Kong and transform themselves step by step into manufacturers that design and make high-quality and high value-added goods, such as designer fashion, garment, jewelleries, timepieces and pharmaceutical products, with a view to promoting Hong Kong brands, ensuring the "made in Hong Kong" brand is designed and manufactured locally, boosting the economic power of Hong Kong and creating a diversity of industries and jobs in various areas, thereby benefiting people from all strata. Thank you, President.

MR FRANKIE YICK (in Cantonese): President, the Chief Executive's Policy Address this year is entitled "Make Best Use of Opportunities Develop the Economy Improve People's Livelihood Build an Inclusive Society". I believe there will be opportunities for the maritime and logistics industries. The completion of infrastructure projects such as the Hong Kong-Zhuhai-Macao Bridge ("HZMB"), the Liantang/Heung Yuen Wai Boundary Control Point and the Three-Runway System at the Hong Kong International Airport ("HKIA") will bring forth new business opportunities will arise. Yet, if we are to grasp such opportunities in good time to promote the sustained development of economic activities like trade and logistics, the determination of the SAR Government will be of pivotal importance.

As the current-term Government will be replaced by the leadership of the next Government after four months or so, it cannot possibly be expected to roll out any ground-breaking initiatives over such a short span of several months only. LEGISLATIVE COUNCIL ― 15 February 2017 3787

Hence, the Policy Address announced by the Chief Executive last month can only make some sort of repairs to existing policies. The Chief Executive explains, for example, that the studies conducted in conjunction with the Mainland on further expanding and enhancing CEPA will yield concrete results by the middle of this year; a free trade agreement with ASEAN countries will be concluded within this year after a long negotiation process; and, the numbers of Hong Kong Economic and Trade Offices stationed overseas and the Offices of the Government of the HKSAR in the Mainland will both be increased, coupled with the provision of more resources to the Belt and Road Office. All these are further measures rolled out after recapping the experience of existing policies.

I must admit that the current-term Government has clearly attached greater importance to the development of the maritime and logistics industries than the previous governments. The Government have rolled out various measures to underpin the development of the maritime and logistics industries, including the establishment of the Hong Kong Maritime and Port Board, finalizing the Three-Runway System at HKIA, allocating additional land resources for logistics development by earmarking sites in Tuen Mun West, Hung Shui Kiu, Yuen Long South new development area ("NDA"), and the topside of the boundary crossing facilities island of the HZMB; putting forward the Proposals for Enhancing the Use of Port Back ‐up Land i multi-storey buildings to increase logistics sites, and even taking forward the Trade Single Window custom clearance system.

Nevertheless, the Government's performance in taking forward these measures has not been very satisfactory, as it has fallen short of industry expectation and failed to keep pace with the rapid development of the industries. For example, the new Hong Kong Maritime and Port Board is still a mere advisory body despite its larger size, not a new statutory maritime body as expected by the industries and proposed in the report on the Consultancy Study on Enhancing Hong Kong's Position as an International Maritime Centre. The industries hope that the Hong Kong Maritime and Port Board they have accepted will not be the end of all efforts. They hope that the Government can still seek to set up a statutory maritime body as the long-term goal, so as step up efforts related to maritime and port development.

The Chief Executive has been emphasizing that Hong Kong is a "spring board" for Mainland enterprises to "go out" and for foreign enterprises to enter the Mainland market, and that Hong Kong must also draw on its unique 3788 LEGISLATIVE COUNCIL ― 15 February 2017 advantage in a bid to grasp the opportunities brought by the Belt and Road Initiative. Accordingly, the Government has rolled out the Trade Single Window with one-stop clearance services to grasp the business opportunities brought to the trading and logistics industry by the Belt and Road Initiative. The intent of this initiative is good, but it cannot keep pace with the development of "trade single windows" in neighbouring regions. The first phase of Hong Kong's Trade Single Window will only be launched in 2018 the earliest and will be confined to specific clearance facilities in Hong Kong. In contrast, the Mainland has plans to extend its trade single window across the whole nation by 2018 while Singapore is actively developing a trade single window with the Association of Southeast Asian Nations ("ASEAN"). Hence, it is imperative that the HKSAR Government quickens its pace in developing its Trade Single Window so as to form with the Mainland and the 10 ASEAN countries a regional electronic platform on logistics system as soon as practicable. It should then progressively develop the "international trade single window" around the globe and extend the scope of cargo sources and volume, in order to strengthen maritime and logistics services.

On land supply, as announced by the Government in 2014, an area of 10 hectares of land in Tuen Mun West comprising a site of 3.5 hectares in Tuen Mun Area 49 and a site of 6.5 hectares in Tuen Mun Area 38 has been earmarked in Tuen Mun West for logistics development. Originally, the Government planned to release the sites to the market for open tender by the end of last year, but such sites are still not yet available at present. It is estimated that they will be launched into the market by the end of 2018 the earliest, where the site of 6.5 hectares in Tuen Mun Area 38 will not be released until the end of 2018, pending the closure of the Government's fill bank there, meaning that new logistics sites will only be released to the market in 2018 the earliest.

In fact, no additional site has been released to the market since the release of the 6.9 hectares of land in Kwai Tsing between 2010 and 2013. Given the ever-changing mode of operation of the logistics industry, the demand for land has become increasingly keen. Online shopping business is growing rapidly as Internet and smartphones are getting more and more popular, as shown by last year's record-high turnover of Mainland's online shopping transactions on 11 November. The development in online shopping business brings not only greater demand for logistics services but also new challenges. Online shopping has helped boost a great deal of timely logistics and transportation services for handling goods in small batches. Positioned as a regional distribution centre, Hong Kong needs more land and space for such processes as goods inventory, LEGISLATIVE COUNCIL ― 15 February 2017 3789 packing and unpacking, processing and distribution. Meanwhile, since online shopping comprises a great variety of items, and even raw and fresh food as well as pharmaceuticals of high value have become hot items, so it is necessary to provide more land for the construction of cold storage warehouses to complement the new "cold chain" services in the freight logistics sector. Therefore, it is not advisable that the Government still proceeds at "a tortoise's pace" in releasing logistics sites to address the market restructuring with the rapid growth of e-commerce. We hope it will make available as soon as possible logistics sites in Tuen Mun, Hung Shui Kiu, Yuen Long South NDA and the topside of the boundary crossing facilities island of the HZMB to facilitate the development of relevant logistics services in order to reinforce Hong Kong's status as a regional distribution centre of high value goods. This will help materialize the pledge in the National 13th Five-Year Plan that Hong Kong's status as an international financial, transportation and trade centre will be consolidated and enhanced, thereby enabling its logistics industry to move towards high-end and high value-added developments.

In recent years, the Government has kept recovering sites temporarily made available for logistics development in the past in order to cater for public housing needs. The sites available for developing logistics-related operations are thus in decline and the development of the logistics industry is somewhat stifled by this. The Government must strike a balance between the land demand of various economic areas and public housing demand if it intends to improve people's livelihood through economic development. I am so pleased because the Government does recognize that brownfield operations related to such industries as logistics, port back-up, recycling, vehicle maintenance, as well as construction, are performing social functions. The Planning Department will conduct a survey on the distribution and use of all brownfield sites in Hong Kong this year. I welcome the Government's effort to explore the consolidation of brownfield operations into multi-storey industrial buildings or through other efficient means of land use. But I also hope that the Government will take into account the affordability of respective industries (in particular small and medium enterprises) in setting the rental levels for multi-storey industrial buildings, or those brownfield operators may not be attracted to move into those buildings.

The Government must adopt the "rehouse first, develop later" policy for the recovery of brownfield sites for development in a bid to minimize impacts on both the operators and the supply chain of the logistics industry. To increase land supply, the Government should expedite its efforts to identify sites for the development of NDAs, develop rock caverns, conduct reclamation on an 3790 LEGISLATIVE COUNCIL ― 15 February 2017 appropriate scale outside Victoria Harbour, and even make use of the land within country parks or on the periphery of country parks which are of relatively low ecological value.

To seize the opportunities, the HKSAR Government should do its very best to remove all the obstacles stifling the development of the logistics industry, such as the strict height control over vessels at Tsing Ma Bridge that has forced mega-size ocean-going vessels, which have become increasingly big, to turn to other neighbouring ports for berthing. Besides this, the Competition Commission in Hong Kong tends not to follow the operation practices of forming leagues or entering into agreements adopted by our global trade partners, thus causing vessel companies to seek berthing for their vessels at other ports. If the Government fails to solve the problem, Hong Kong will cease to be taken as a transit point by international ocean-going vessels. This will have severe impacts on the freight industry and Hong Kong's status as a transportation and logistics hub that took years of efforts to build will be at stake.

Apart from removing obstacles, we have to get prepared as early as possible for future challenges. Hong Kong has been enjoying the unique advantage of cabotage right in the Mainland's maritime transport. However, after the Shanghai Pilot Free Trade Zone was launched in 2013, places like Qingdao, Ningbo, Guangzhou, and Nansha subsequently applied to the Central Government for relaxation of cabotage right in maritime transport. Once the state policy on maritime cabotage is gradually opened up, Hong Kong's freight and logistics industries will have to suffer heavy blows. Hence, the Government must fully relay to the Central Government as early as possible our concerns and worries about the severe impacts of the state policy of totally opening up cabotage right in maritime transport.

Security check/screening requirements have become increasingly stringent since the 11 September incident in the United States. There is even the news that the European Union will impose a 100% screening requirement on air cargo. Currently, the Government implements air cargo security standards promulgated by the International Civil Aviation Organization under the air cargo security Regulated Agent Regime, but only those officially certified regulated agents are exempt from the 100% screening requirement. There are practical and operational difficulties in meeting the requirements and I believe that it will be hard for Hong Kong to fulfil the air cargo screening requirements imposed by the United States or the European Union without making any corresponding improvement. We should note that air cargo only accounts for 1% of Hong LEGISLATIVE COUNCIL ― 15 February 2017 3791

Kong's total cargo volume, but makes up nearly 40% of Hong Kong's external trade by value, amounting to some HK$3,000 billion. Therefore, it will be rather difficult for Hong Kong to maintain either its status as a regional logistics hub or an air hub should it fail to meet the screening requirements, and our economy will be severely affected. I hope the Government will come up with a solution to tackle the situation as early as practicable.

While rolling out measures to enhance the development of the maritime and logistics industries, the Government has, on the other hand, caused the operating costs of relevant industries to rise, resulting in a business environment particularly unfavourable to medium, small and micro-sized enterprises ("MSMEs"). At present, more than 90% of logistics operators in Hong Kong are MSMEs, but the measures implemented or planned by the Government in recent years have had far-reaching impacts on the operation of the MSMEs, including the statutory minimum wage that has already come into force, the paternity leave for male employees, the much disputed standard working hours, universal retirement protection, the abolition of the Mandatory Provident Fund offsetting mechanism, and the increase in labour holidays. All these have added to the problem since the MSMEs are already having difficulty keeping their heads above water for the time being and are on the verge of unsustainability or even closure.

It is anticipated that Hong Kong is still subject to a number of uncertainties in the four years ahead, including the political and economic turbulence in the world, the protectionist economic policy adopted by the new President of the United States, China's slowing economy, and the presence of various obstacles in Hong Kong politics, people's livelihood and the economy. Therefore, we hope that the Government will avoid rolling out any measures that will affect the business environment in Hong Kong and plunge the MSMEs further into financial hardship. Otherwise, the Government will not be able to lead the community in seizing the opportunities for development, let alone improving people's livelihood through any economic measures.

The Liberal Party supports the Government's plan to offer tax concession so as to attract companies to develop aircraft leasing business in Hong Kong, and we even opine that the offer should be extended to the maritime industry. With the provision of tax concession, more ship-owners, ship management companies and merchandise traders will be attracted to anchor in Hong Kong and so will other high value-added services industries related to the maritime industry, including ship finance, marine insurance, maritime law and arbitration, etc., 3792 LEGISLATIVE COUNCIL ― 15 February 2017 thereby enlarging our maritime cluster and further reinforcing Hong Kong's position as a maritime centre.

Yet, human resources are indispensable to promoting the development of the economic activities. Currently, various local industries are facing manpower shortage and succession problems, among which are the industries involving sea-based operations (including transportation of passengers and cargo). Those industries are facing the problem of acute manpower shortage and badly in need of mechanics, sailors and engineers. To meet our community's growing demand for marine safety, relevant industries have enhanced both their manpower as well as equipment. Besides, the Government has been increasingly stringent in ship inspections and the succession problem of surveyors of ships in the Marine Department has in fact aggravated the situation. As a result, the numbers of idle days of ships have increased due to the incessant lengthening of the waiting time for ship inspections, thus affecting sea-based operations. The development of the industries concerned will be stifled if the Government does not deal squarely with the problem. By then, no one will be available to do business even though customers are found there, and it is probable that the current service quality will decline while businesses may shut down in the end.

In addition to expeditiously setting up a working group with the industries to help solve their manpower shortage problems, the Government should also increase resources for enhancing their professional images, and provide subsidies to encourage automation of work processes by applying technologies so as to reward those operators capable of increasing productivity with the limited manpower they have got. The ageing population and low birth rate in Hong Kong are the major causes of insufficient labour force. Relying solely on pay increase to compete with other industries for suitable talents is purely making do with what is available and the problem will still remain without any new sources of manpower supply. All businesses will lose competitiveness and have to shut down at the end of the day. This will certainly have adverse impacts on Hong Kong's long-term economic development. Hence, it is incumbent upon the Government to adhere to the governance philosophy of "Develop the Economy; Improve People's Livelihood" by actively studying the importation of labour for individual industries to facilitate sustainable development of the various economic areas in Hong Kong.

I so submit, President.

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MR JEREMY TAM (in Cantonese): President, in respect of air transport, the policies of the Government are rather disappointing. Over the past five years during the tenure of Chief Executive LEUNG Chun-ying, the condition of the Hong Kong International Airport, which is among the best in the world, has been deteriorating steadily. It will meet a financial cliff at any time. Its world ranking is falling.

The Hong Kong Airport Authority ("AAHK") has all along been insisting on the construction of the three-runway system ("3RS") project and claiming that the construction of 3RS will enhance Hong Kong's competitive edge. Nevertheless, due to the high construction cost, the damage to the environment and the airspace issues, people are sceptical of the effectiveness of 3RS. For that reason, there have been opposing voices in society.

It was not until the year before last that the Executive Council endorsed AAHK's expansion proposal of constructing 3RS. The 3RS project will cost $141.5 billion. In order to bypass the Legislative Council to get the required funding, AAHK seeks to fund the project through three channels. Nearly half of the funds will be raised by AAHK itself, but its current "AAA" credit rating will be lowered to junk status. Another portion of the funds will be secured from the cessation of payment to the Government for 10 years of dividends. The remaining part will be increasing the fees and charges on airlines and airport users (including introducing an Airport Construction Fee of not exceeding $180 per passenger). That is, they simply victimize members of the public and demand Hong Kong people to foot the bill for 3RS.

Of course, if the construction of 3RS can really address future aviation needs and bring substantial benefits to our economy, there should not be so many people who are opposing to the proposal. However, actually the addition of one more runway cannot guarantee that the flight capacity will be scaled up. The reason is that the airport at Chek Lap Kok is under the constraint of limited airspace resources between Hong Kong and China, so the construction of 3RS may not necessarily increase the number of flights due to the problem of the overcrowded airspace.

The Government seems very confident in campaigning for 3RS and says 3RS can solve the problem of overcrowded airspace as previously mentioned. Besides, it says smugly that a certain agreement was already concluded with Mainland authorities eight years ago. But when questioned on why the 3794 LEGISLATIVE COUNCIL ― 15 February 2017 agreement has not been implemented, it simply says the issue is too complicated that its cannot be solved instantaneously. When the Government was asked to make public the contents of the above mentioned 90-page airspace agreement, Secretary Prof Anthony CHEUNG rejected it on the grounds of commercial and strategic confidentiality. It was delayed for two years but the public have not yet been given an acceptable answer.

(THE PRESIDENT'S DEPUTY, Ms Starry LEE, took the Chair)

The authorities will be over optimistic if they intend to coerce the Central Authorities into opening up the airspace of Shenzhen for Hong Kong by using the "what is done cannot be undone" tactic. If we look back at the history before the construction of the airport at Chek Lap Kok, the prerequisite was that the airspace issue could be solved. But the problem was not solved since the airport was commissioned in 1998, why the "what is done cannot be undone" tactic did not work even the airport at Chek Lap Kok was constructed from scratch? Will the "what is done cannot be undone" tactic work with the construction of one additional runway?

Even though the Government and AAHK decided to construct a $141.5 billion 3RS project with its effectiveness dubious, is it really in the best interest of the public? Does this development deserve Legislative Council Members' thanks?

In order to tie in with the alleged growth in air traffic brought about by the construction of 3RS, the Civil Aviation Department ("CAD") procured an air traffic management system, Raytheon AutoTrac 3 ("AT3 system"), which is faulty and full of loopholes like the holes of a colander that even pro-establishment Members will worry about. I think Members and Hong Kong people still have a fresh memory of that.

Only three places on earth are using the new AT3 system, including Hong Kong, Dubai and India. Before the system is commissioned in New Delhi, India, there is already plan to scrap the system because of numerous glitches. Meanwhile in Hong Kong, the commissioning date of the system has to be postponed because of glitches during the ultimate trials and the airport has to switch back to the old system. As soon as the new system was commissioned, frontline air traffic controllers expressed that the management had ask them to LEGISLATIVE COUNCIL ― 15 February 2017 3795 show their support and confidence in a "confidence questionnaire" under duress. The most important thing is that the questionnaire will be included in the assessment report of the independent consultancy firm, National Air Traffic Services ("NATS"). Therefore, the relevant data are actually relevant to whether or not the new system can be put into operation. Nevertheless, the Transport and Housing Bureau has been so reluctant that it insisted not to conduct any investigation on that allegation. On the contrary, Transport and Housing Bureau only asked CAD to conduct investigations by their own people. What outcome can be achieved in that case?

What followed were a series of major and minor glitches of the new system, including flight disappearances from the system's radar from 12 seconds to 26 seconds and 75 seconds. There was also disappearance of the indicators which showed the call signs of aircrafts. Then three planes would appear on the same spot that a ghost plane, which should not be appearing on the radar screen at all, would be sandwiched by two other planes. There were also double images on the new system. As a result, the predictive conflict alert was triggered. What was more outrageous during the New Year holiday was that "the boy who cried wolf" false alarm had become "the boy who cried wolf" real alarm, but the alarm did not go off, resulting in incidents involving "loss of separation" but the predictive conflict alert was not raised.

What should be triggered has not been triggered, while what should not be triggered has been triggered, what should frontline staff trust? Air traffic controllers are in a state of constant fear. However, Transport and Housing Bureau and CAD came out every day to do the whitewash and said what new flight records were set and how many flights had arrived, how many were in transit and how many had departed. But they just turned a blind eye to the fact that new records concerning air traffic control incidents were set on top of new records of flights. Major and minor glitches have happened almost on a daily basis.

It was obvious that the system has made mistakes, but the authorities were just making up excuses by saying that air traffic controllers could solve the problems with their professional knowledge. The authorities were simply defying the fact that the system was faulty. Hong Kong deserves a high quality air traffic management system, not a second-class incident-laden system which requires our first class air traffic controllers making an effort to cope with it.

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As to the construction of the new headquarters of CAD, the Legislative Council's Public Accounts Committee ("PAC") had criticized it a spendthrift in the previous term by using the most stringent words such as "deplore" and so on to criticize Norman LO, the former Director-General of Civil Aviation ("DGCA"), for negligence on his part. That included the construction of shower facilities in DGCA's office without permission, procuring more than 100 LCD units without permission, adding 1 500 sq m of expansion space without giving prior notice to the Property Vetting Committee ("PVC") and the Finance Committee ("FC"), and spending $67 million on security and electronic systems without the approval of the Financial Services and the Treasury Bureau, and so on.

What penalty has been meted out to Norman LO, the former DGCA? We know nothing about that until two weeks ago when the media made an enquiry. It turned out that Transport and Housing Bureau had completed the investigation. The authorities declined to name the two public officers involved. Neither had the authorities revealed the misconduct. As to the punishment, it was nothing but the so-called summary disciplinary action, that is, verbal or written warning. Another case is even more outrageous. The authorities said that as the person had retired, no further pursuit could be initiated. The Government, as in the past, covered them up. Is it true that no matter what misconduct public officers have committed, they need not afraid because they can take early retirement and therefore no further pursuit can be initiated?

As to the fact that the LEUNG Chun-ying regime covers up the default of CAD again and again, I wish to ask once again, does he deserve us, Legislative Council Members who are present in this Chamber, for thanking him?

The financing of 3RS and the commissioning of the new air traffic management system are important aviation events, but this year's policy address only devoted limited coverage to air transport. The only commendable thing is that the Government will establish an "Independent Air Accident Investigation Authority" in next year.

At present, air accidents occur in Hong Kong will be investigated by CAD, and the chief investigator will be assumed by DGCA. In fact, the aviation industry has all along been calling for the establishment of an oversight, which is be independent from CAD, to investigate air accidents occur in Hong Kong airspace. However, this benevolent policy is not proposed simply due to a LEGISLATIVE COUNCIL ― 15 February 2017 3797 sudden change of the mindset of CAD and the Government. In fact, it was the International Civil Aviation Organization which announced a new regulation in November last year that an independent air accidents investigation authority should be set up, because any accident could be a result of the fault of an aviation regulatory authority.

In this connection, I anticipate that not only an independent regulatory authority should be set up for the civil aviation industry, such practice should also be extended to the maritime sector. The Lamma disaster is an example to illustrate the incompetence of the Marine Department ("MD") in its regulatory role, resulting in the failure of maintaining a full record of some out-dated mechanism as well as the fact that all records were in disarray. According to the figures of MD, there were 310 marine accidents within Hong Kong waters in 2016, resulting in 2 death and 30 injuries. There were also 118 marine accidents outside Hong Kong waters resulting in 3 death and 7 injuries. Therefore, we can see that almost 1 or 2 maritime accidents will occur every day. For that reason, if a regulatory authority is set up, then it can urge MD to conduct follow-up actions. I believe that will help to reduce the chances of maritime accidents occur within Hong Kong waters in future.

I so submit.

DR YIU CHUNG-YIM (in Cantonese): Deputy President, regarding innovation and technology, I would like to point out that the Government's research funding is gravely insufficient, and the Policy Address has not responded to this issue. In fact, the Research Office of the Legislative Council Secretariat has prepared a paper on last year's Budget, which clearly states that the amount of funding invested by the Hong Kong Government in scientific research lags way behind the funding in other developed economies. Unfortunately, a year has passed, but the Chief Executive has not listened to the demands put forth in the research report. The Policy Address this year likewise merely focuses on the handling of hardware support, such as building more industrial estates or convention and exhibition venues, totally neglecting the investment of funding in and the training of talents for scientific research.

According to the Global Competitiveness Report 2016-2017 published by the World Economic Forum, Hong Kong's performance in innovation is still unsatisfactory, ranking the second last among the 12 indicative pillars. The 3798 LEGISLATIVE COUNCIL ― 15 February 2017 figure of Hong Kong's investment in scientific research gives us a clear picture as it only takes up 0.74% of the gross domestic product. The investment in scientific research by public enterprises is even as low as 0.4%, far lower than that of 2.07% of Singapore, 2.47% of Taiwan, 3% of the United States and 4.14% of South Korea.

Actually, Prof TSUI Lap-chee made an open request to the Government last August, urging it to substantially increase funding for scientific research to an amount of not less than 1% of the gross domestic product. Regrettably, the Government turned a deaf ear to the request, and we cannot see in the Policy Address a significant increase in the investment in scientific research. Quite the contrary, we can see this in Singapore. The country announced early last year that it would launch a "Research, Innovation and Enterprise ('RIE') 2020 Plan" over the next five years and would invest as much as S$19 billion (roughly equivalent to over HK$100 billion) in this single project. We can say that our investment in innovation and scientific research under the Policy Address is far inferior to that of Singapore.

In the Policy Address, apart from providing a subsidy of up to $4 million to the "Technology Start-up Support Scheme for Universities", launching the "Midstream Research Programme", and requesting the University Grants Committee to complete the review on the allocation of research grants within one year, no substantial increase to research grants including those for universities is made. On the contrary, Singapore will invest, under its RIE 2020 Plan, S$8 billion in academic research and manpower development. Another S$2.5 billion, which is known as "White Space" funding, will be set aside for future use in the emerging scientific research. Hong Kong is being short-sighted and over-pragmatic that it requires every funding application to illustrate if the funded-project could yield results and introduce to the market in a short period of time. Without such far-sightedness, no "White Space" funding is available in Hong Kong for future use in the emerging scientific research.

Finally, in respect of the development of industries, we all agree that it relies on scientific research and development which depends on the popularity of science education. However, in the area of education, the Policy Address only sets out that it will promote Science, Technology, Engineering and Mathematics ("STEM") education by providing each public sector secondary school with a one-off subsidy. There is no mention of reforming the academic structure for introducing universal education in science. Likewise, in the post-secondary LEGISLATIVE COUNCIL ― 15 February 2017 3799 education, grants for PhD studies has not been properly used to nurture our local students, so Hong Kong has been in lack of talents in the areas of scientific research and innovation.

According to the information provided by the Research Office of the Legislative Council Secretariat, Hong Kong's researcher intensity, at only 6.15%, is among the lowest in developed economies. The Government does not invest adequate resources in scientific research, nor does it attach importance in nurturing scientific research and innovation talents locally. Hong Kong's failure to get out of the difficult situation of long-term reliance on talents from overseas and the Mainland makes it unable to invest adequate funding and talents to promote its long-term economic development in the areas of innovation and technology as well as scientific research technology. Without adequate talent training, sufficient nurturing of local scientific research talents, as well as appropriate investment in scientific research, no matter how Hong Kong attaches importance to its economic planning, it will only turn out to be hollow words. With only the hardware, we will not be able to deliver effective results in the economic scientific research and produce fruits of innovation.

I so submit. Thank you.

DR PRISCILLA LEUNG (in Cantonese): Deputy President, this is the Chief Executive's last Policy Address. Though the SAR Government and the Chief Executive may not really have much achievements over the past five years, I believe they have at least worked hard dutifully. Therefore, I wish to express my gratitude towards the Chief Executive and his team for their efforts in various aspects for Hong Kong over the past five years.

True, there are a whole lot of deep-rooted problems in Hong Kong. I have been a Member in this Council for three terms, now serving my third term as a legislator, and my tenure has spanned the terms of office of two former Chief Executives, Mr Donald TSANG and Mr LEUNG Chun-ying. Mr TUNG Chee-hwa, the first Chief Executive since we returned to China, had a business background, Mr TSANG had a civil servant background and Mr LEUNG had a professional background, though we can say that he was already very active in politics at that time. If we compare the nicknames of the three Chief Executives above, Mr TUNG, a successful entrepreneur, was called "TUNG the Old Fool"; Mr TSANG was labelled "Bowtie TSANG", and was given another nickname 3800 LEGISLATIVE COUNCIL ― 15 February 2017

"Greedy TSANG" in recent years; Mr LEUNG's nickname changed from "Mr 85 000" then to "CY the Wolf" now. These nicknames, descriptions or criticisms indeed show us the really complicated political and economic situation in Hong Kong.

I believe that all the previous Chief Executives did strive to deal with many deep-rooted problems in Hong Kong. Among these problems, I can still clearly recall the irony surrounding the "85 000" policy which was introduced in 2000. We were in the midst of the 1997 Asian Financial Crisis at the time, and everyone felt hatred when reminded of "85 000", or at the sight of Mr LEUNG. I remember some well-known businessmen telling me that they would certainly withdraw their investment or emigrate if Mr LEUNG would become the Chief Executive, as the "85 000" policy was attached to the fall in property prices then. Newspaper in 2000 reported the same stories too.

Then, in 2012, Mr LEUNG ran for Chief Executive. He mentioned this measure again, emphasizing his willingness to increase housing supply, and took this as the best selling point. Why did he do so? It was because the objective political and economic environment had changed. The economy collapsed during Donald TSANG's tenure as the Chief Executive, and many members of the middle class became homeowners in negative equity, causing the Government to halt land sales. In fact, the problems have existed for a long time, and it takes over 10 years to complete a construction project in Hong Kong under which potential sites are turned into disposed sites. Therefore, I believe we should not blame the problem on an individual. In fact, Hong Kong is full of deep-rooted problems, including problems relating to housing, welfare system, young people, education and cross-generation poverty. We cannot simply expect the Chief Executive to resolve them all within one term, nor can we possibly expect all the previous Chief Executives in the last 10 years to deal with them all in one go.

While other people may make some really disparaging remarks when referring to such a problem, I will relate his efforts with the story of a Chinese idiom I learnt in my childhood, which is about an old man's earnest, but considered stupid, attempt to remove a mountain. It is pretty good to describe LEUNG Chun-ying and his administration with this story. In fact, there were all sorts of deep-rooted problems when they came into office, and everyone recognized the mountains before us, one of them was of course the mountain of housing problem. He thus tried to remove the mountain plot by plot. Actually, I can understand his feeling when he said last time that they have made LEGISLATIVE COUNCIL ― 15 February 2017 3801 painstaking efforts in securing every inch of land supply. As a matter of fact, I spend much time meeting with the middle class, even helping the cloth hawkers in "Pang-tsai" in Sham Shui Po and residents in estates of "Four Little Dragons of West Kowloon". Residents in the locality or cloth hawkers making a living at the site firmly reject the Government's proposal to recover their lands for building development. This tells us how difficult it is to find lands in Hong Kong, and the enormous difficulties faced by the North East New Territories Development do not help at all. I believe that we must identify ways to resolve Hong Kong's problems with a sense of history.

Of course, we very much wish that the next Chief Executive can help us resolve these deep-rooted structural problems and lead Hong Kong forward. Hong Kong is dogged by problems, but I must point out that the existing system is not as bad as many young people have claimed, despite all the problems around us. Tax reform is a heated topic today, and I am open with this question. However, I must remind that the reform, if carried out, must not be done in the expense of Hong Kong's edge at present. The low tax policy was specifically written into Article 108 of the Basic Law when Hong Kong returned to China. Why was this the case? Many people regard that the low tax policy favours the rich, thereby proposing tax reform in this respect with a view to imposing higher taxes on the wealthy. I do not object this as long as they can figure out a fine two-tier tax system.

That said, many members of the middle class like Hong Kong's tax system, including two of my former colleagues. They came from France to Hong Kong exactly because of our attractive tax regime. Despite being lawyers, both of them considered it impossible to make any saving in France, and they were even not willing to gain promotion, as this would result in more tax payment. Therefore, they would rather stay in the original rank in the law firm. Subsequently, they were engaged by the City University of Hong Kong for teaching posts. They liked Hong Kong's tax regime very much, and had no idea why the people were always complaining as if everything had gone wrong in Hong Kong.

I wish to point out that Hong Kong is not without merits. That said, I believe that we truly have to think about ways to tackle cross-generation poverty.

As the saying goes, "Give a man a fish and you feed him for a day; teach a man to fish and you feed him for a lifetime." We should teach the people to 3802 LEGISLATIVE COUNCIL ― 15 February 2017 escape poverty. It is always my hope that we can lift more people above the poverty line, so that one day they become members of the middle class and are able to further move up the social ladder. In this regard, I share some of the viewpoints mentioned by Dr YIU Chung-yim in his speech just now, in which he said that the Government should deploy more resources on technology research and development for universities. But I wish to add a point. Apart from adding more resources, how about the software? Secretary Nicholas YANG is present now. Probably he knows well about what I am going to say. Universities are eager to see the commercialization of research and development results achieved by their professors. Hence, I have always supported the establishment of the Innovation and Technology Bureau in order to provide chances for the sector. It is because many professors do not have the knowledge about commercialization, and are thus unable to properly apply their research and development results, eventually wasting their intellectual property.

More importantly, while we always mention of supporting young people who aspire to start their own business and buy their own flats. However, does fulfilling their aspirations of property purchase mean buying flats for them? Or, should we teach and help them, so that they can have the jobs they like? If so, perhaps they will start their own business in the future. I consider that, in order for us to leverage on Hong Kong's own advantages, our young people and Hong Kong people in general must develop two perspectives. Industries in Hong Kong must have an international perspective and a national perspective. Missing either one will render them incapable to make full use of Hong Kong's advantages.

For example, China introduced "One Belt One Road" in 2013. I can be regarded as an active participant since 2014. We established a research institution and conducted numerous studies in collaboration with experts on international economy from over 40 countries, with topics ranging from conciliation, differences between the legal systems and mechanism for reaching consensus among these countries. We even put forward our recommendations in these areas. In the past, we had WTO. Regarding the development of the "One Belt One Road" initiative at present, however, in relation to the newly joined countries all over Asia and Central Asia, it is necessary that we can devise new method for resolving conflicts under China's leadership, so as to ride on China's rapid economic momentum and achieve a "win win" or even an "all win" situation for everyone.

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It does not make sense that Hong Kong will let other markets grasp this opportunity. Having taken part in many seminars, we even specifically proposed setting up a dispute resolution centre. The same is true for the Asian Infrastructure Investment Bank as the tasks concerned will certainly involve international cooperation. So, can we set up the centre in Shenzhen? Some suggest setting it up in Qianhai, while others suggest it be based in Beijing. Contrarily, many of my friends in the Mainland consider that we should establish the centre in Hong Kong. They are both experts and businessmen in the field who appreciate our legal system, software, financial institutions and talents in various sectors. But there is a big minus in Hong Kong, of which they really cannot understand. In fact, my friend studied in Hong Kong as early as in the 1990s, and moved aboard later, before returning to the Mainland as one of the major officials responsible for economy and finance. Hong Kong people give him an impression that "Anyone but CY" ("ABC") actually means "Anyone but China", in which "C" refers to China.

"One Belt One Road" is certainly unrelated to CY as it is proposed by the country, yet in comparison to netizens in other places, Hong Kong's netizens are the most scornful of "One Belt One Road", treating the concept with ridicules involving some very despicable images or wording. "One Belt One Road" is an strategic initiative on international economy. It is open to criticism, as in the case of WTO which is also subject to widespread criticism that free economy may not necessarily be that desirable. Likewise, globalization is open to criticism too, but the people cannot attack "One Belt One Road" with such derogatory words simply because it is proposed by China. The concept was heavily criticized even before any content was published. Imagine how many people can really explain what is "One Belt One Road"? However, these students have talked of this as if everyone mentioning "One Belt One Road" is trying to flatter China. We must eradicate such prejudice, especially the young people. How can we overcome this so-called economic stalemate if we cannot share the same feeling with the country and leverage on opportunities arising from China's economic development?

We do not merely wish to hand out money to the poor. This is not the case. We hope they can take their opportunities too, as this is the spirit of this city all the time, not exclusive to the generation of "Lion Rock Spirit". I have confidence in Hong Kong people. Many of the young people which I have met are ambitious, yet they will ask how can they seize the opportunities presented by such a giant mountain before others do? You aspire to the moon in the sky, but 3804 LEGISLATIVE COUNCIL ― 15 February 2017 can you grasp it right with you hand? You have to at least study how the rocket works, and know about the situation on the moon. Many achievements in the world are results of great patience and long-term effort. We must contemplate how to apply this spirit in our careers, while the same is true for those who wish to start their own business. We need to nurture a sense of history when looking at economic development, in order to know where we are standing. Say, we divide China's development into three stages. It is widely known that the country was full of political upheavals between 1949 and 1979. After hanging on for three decades, the country finally opened up its economy in 1979; the period between 1979 and 2009 was relatively stable. I belong to the second 30-year period, and one can fairly say that I am a beneficiary of this. At that time, we could be regarded as the "pioneers". We visited Beijing in 1987 and stayed there for a few years to learn about Mainland China and its various aspects, such as rule of law. In effect, we interacted with China. Some may claim that our generation have reaped all the benefits for a comfortable life today, and they are left with no upward mobility as a consequence. This is not true indeed. In my opinion, the new generation will create the next three decades, the period from 2009 to 2039. Why? Regarding the generation which were young and explored to start their business between 1979 and 2009, they no longer have the same body and mind if they are asked to venture overseas today. However, there are truly many entrepreneurs in China who wish to expand their business abroad because they have the capital, or because their business is in the right stage to explore internationally. But they do not have the experience, nor do they have the knowledge about practices in western countries. In fact, they are eager to use Hong Kong's professional talents for leverage. Relatively speaking, they trust the professionalism found in Hong Kong people, as well as our rule of law and financial system. While they wish to have Hong Kong people's assistance, they are wary of being betrayed, as they feel like unwelcomed in Hong Kong after learning about the news on the Internet, in which they are rejected even if they are spending in our city. As a result, they opt for Singapore instead.

Many friends of mine will visit Singapore and South Korea for shopping without having to come to Hong Kong now. They are afraid of being discriminated or driven away merely for carrying luggage. In my opinion, we need to have an international perspective and a national perspective in our mind, as this is the right spirit of Hong Kong. Moreover, we are presented with different opportunities today. In the past, entrepreneurs would set up factories in the Mainland engaging in contract processing and joint ventures. Yet we have LEGISLATIVE COUNCIL ― 15 February 2017 3805 the Internet nowadays. Every year, I visit the rural areas where my two kids will spend at least three weeks each year since they were born. There is not even a toilet in the villages. Despite the changes in big cities, rural areas just stay the same. I know some children from rural communities, watching them grown up, and I visit the Great Wall with children from different villages each year. Now, some of them have become parents, while some are secondary school graduates without being admitted to universities. However, all of them have started their own trade online with tiny capital, and are even wealthier than me. Young people in Hong Kong surely have better knowledge of Internet and future technological development, but this is probably not related to degree qualification. A degree facilities us to take the first step, yet the era of monopoly by degree holders has long gone. I believe everyone will get their chances as long as one is willing to do some thinking.

Therefore, in terms of economic opportunities, I must specifically talk about two types of persons. The first one is young people. The second is people with experience. I intend not to refer to them as the elderly, as some of them retire at 55, while more of them retire at 60. Speaking of retiring at 60, many Members in the Legislative Council … still very competent, they are really talents who retire relatively early. With capable minds, sophisticated live and work experiences and extensive human networks, they can be mentors for young entrepreneurs. On the contrary, young people are rather weak at human network, personal finance and endurance. They feel down for not achieving success merely after one year, and are disappointed for having to start over again after losing all the capital.

With regard to the elderly, I recall the movie titled The Intern starring Robert De Niro. He plays the role of an intern at the age of over 60, yet his skills in human interaction and attitudes in handling matters have instead been helpful for resolving many conflicts within the company he serves. In this case, many young co-workers can learn from him, and this is conducive to the company's development. I wish we can seriously look at business arising from the silver hair generation. It is because many people aged over 60 are still very capable. We should divide them into groups of 55-60, 60-65 and 65-70. The Government needs to offer opportunities to these group of people who are still able to make contribution to society. They may not have to take part in physical tasks, but if the Government is able to provide right places for them, they will absolutely be able to nurture new entrepreneurs in relation to current economic development. Even though the Government has introduced certain funding 3806 LEGISLATIVE COUNCIL ― 15 February 2017 schemes, young people have to get the know-how before they can sustain their nascent business. After all, any intellectual property needs to be commercialized into merchandises in order to explore new markets globally.

Young people may start with nothing. A recent live show TV programme claims that buying a flat is the essential step in a relationship. Actually we did not consider purchasing a flat as the target of life at that time. This should not be the target of life. Instead, we should formulate overall policies in assisting them for dealing with the housing problem they face. More importantly, they should aim for job satisfaction in life, but not simply setting their sights on attaining a degree. Therefore, I believe merely increasing degree places may not necessarily be the solution for problems confronting young people.

One of my students has become a bartender after finishing the legal course for barristers and becoming a pupil. He feels more happy working in a pub. This is the kind of choices young people make today, but we have to respect them instead of rigidly holding on to traditional values. While some colleagues insisted on keeping him at it, this may not be the most suitable path for him. We must allow him to find his dream. It is our responsibility to create an environment where the experienced with vigour and the youth with dreams can complement each other, so that those people without asset can climb up the social ladder to join the middle class, and even move further upward, while those belonging to the middle class will not move downward when they cannot keep their assets after they get old, as this will really be miserable for them. I wish that the Government can do some long-term planning and see if the proportion of middle class population can reach 50% after 5 or 10 years. Does the Government have such an ambition? I believe we should work together towards this goal.

Deputy President, I so submit.

MR SHIU KA-CHUN (in Cantonese): Deputy President, "Opportunities Gone, Livelihood Retrogressed, 'Government-Business-Rural-Triad' Collusion, and Social Dissension". This is the response I, together with Dr Fernando CHEUNG, Mr LEUNG Yiu-chung and Dr LAU Siu-lai, made when we met the press after the Policy Address delivery on 18 January.

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The Introduction of the Policy Address begins with the vision of "Developing the Economy and Improving People's Livelihood". How boldly said! It says that developing the economy can improve people's livelihood and promote social harmony and inclusion. And it goes on blowing its own trumpet, saying that Hong Kong has been rated the world's freest economy for 22 consecutive years, and that our inflation has been receding, and that the unemployment rate has remained at a very low level, so on and so forth. But, may I remind Mr LEUNG Chun-ying that he came here to deliver the Policy Address in his capacity as Chief Executive. He is not a fraudster selling fake herbs, try every deceptive means to deceive people.

Deputy President, I am a teacher and I often remind my students that they need to pay special attention to the preamble or presupposition of a question when they do projects. If they do not understand the preamble correctly, their efforts will be going down the drain no matter how brilliant or creative their answer is. Likewise, if he gets the direction wrong, no matter how hard he tries, he will only be getting closer to his destruction. What I mean is that he has set the direction of the Policy Address wrong. The Policy address seems to advocates "Developing the Economy and Improving People's Livelihood", but it actually advocates "Developing only the Economy and Ignoring People's Livelihood". The Government is bold enough to mention that Hong Kong is the world's freest economy, but it has overlooked the fact that our economy is already developed but the livelihood of the people is not improved.

The gross domestic product ("GDP") of Hong Kong in 2015 has increased by 15.2% as compared with the GDP in 2012. But the overall poor population size and the poverty rate in 2015 were 1 345 000 persons and 19.7% respectively, which were higher, rather than lower, than the overall poor population size and the poverty rate in 2012. Hence, developing the economy has not improved the livelihood of the people. The GDP per capita has increased by 15.2%, or some $40,000, as compared with the GDP per capita in 2012. But the poor population has grown, rather than reduced, by 30 000 persons, and the poor population after policy intervention still reached 970 000 persons.

If we refer to the Gini Coefficient, we will find that the Gini Coefficient of Hong Kong in 2015 was 0.537, the highest in 40 years. Last year, Hong Kong ranked eleventh in terms of its Gini Coefficient among some 150 countries and economies in the world. We can thus see how serious our wealth cap is in Hong Kong. In 2014, 1% of the richest population in Hong Kong accounted for more 3808 LEGISLATIVE COUNCIL ― 15 February 2017 than half of the total wealth in Hong Kong. The median income of the richest households is 19 times of that of the poor households. Two hundred and eighty thousand people have waited for 4.5 years but are yet to be allocated a public rental housing flat. Two hundred thousand people are living in partitioned flats. The remunerations of government employees are more than 40 times better than those of the grass-root workers employed under outsourced contracts. A survey on a happy index even shows that Hong Kong ranked seventy-fifth in this regard. Do Members think that Hong Kong people are happy?

Deputy President, I have again brought my friend with me today. (Member took out an elderly person's photograph). This elderly person is an outsourced street cleaner. He has been contributing to Hong Kong for decades and he still has to work in his seventies and eighties, earning only the minimum hourly pay of $32.5 without a paid lunch hour, nor a place to get change to work uniform. He is very worried when he gets sick and needs to raise money for his medical bills. What would this outsourced worker say if he were here today attending this Policy Address debate?

A British film, "I, Daniel BLAKE", just won an award at the Cannes Festival. Ken LOACH, the film director, focuses with compassion on the people at the lower echelons in his film. He wants to bring home the message that the working classes often cannot benefit from economic booms, but they are always the first to be hard-hit at times of economic crises. This outraged film director, at the age of 80, has revealed in his film the inadequacies of public welfare policies. According to LOACH, under the persistently ineffective benefit system, the Government keeps asking people to wait, with the aim of getting these people out of the benefit system. At the press conference after the Cannes prize presentation ceremony, the film director said, "When you get very old, you're just pleased to see the sunrise the next day, so we'll just take each day as it comes." Elderly persons can be overwhelmed by the sunrise in a new day, but I am unsure if this outsourced cleaner friend of mine ever has a chance to see the sunrise, and whether he will be the same overwhelmed, or feeling a headache instead because it is time for him to start work.

The Chief Executive seems to turn a blind eye to the livelihood of the grassroots. He continues to brag about neoliberalism in the Policy Address. After two or three decades of experimenting with the trickle-down theory, people, whether in Hong Kong or the world, have proved that the theory actually does not work. This is a consensus reached in the political, economic and academic LEGISLATIVE COUNCIL ― 15 February 2017 3809 circles. During the five-year administration led by LEUNG Chun-ying, society becomes divided and the discrimination and xenophobic atmospheres thickened. Beset by this predicament, the new Chief Executive must progress from the mindset of the past administration, suitably return the power grasped by a small number of people to the general public and allow different opinions to be voiced out and to co-exist.

In the coming five years, the Government can explore the idea of a social economy, in which people groups or people in a community act and help themselves to develop a bottom-up community economy. By so doing, people of the lower echelons can get a fair share of the return with their hard work and have a greater chance of participation and more room for autonomy and mutual help, so that people can live pleasantly, blissfully and happily, and they can make a living with dignity under a social economy that conforms to the principle of righteousness. Community bazaars, community housing, community creativity and community enterprises can all achieve the functions above. If the Government is willing to accept good advice, it really does not need to make big moves to achieve good results.

The Government often says Hong Kong pursues a free market and that it will develop the economy first and then improve people's livelihood. But the free market is a fake one from the start. It is businessmen-oriented capitalism. It shows itself in the forms of "partitioned flats", the refusal to build public housing, the "shrunken flats" and many other examples that happen in our everyday lives. I earnestly hope that this friend of mine can be here today to participate in this debate and listen to our responses. I very much wish to know if he is really here, whether the Public Officer can look straight at his eyes and say to him that developing the economy can truly improve his livelihood.

Thank you, Deputy President.

MR LEUNG YIU-CHUNG (in Cantonese): Deputy President, today we discuss LEUNG Chun-ying's last Policy Address during his term of office. Regardless of the contents of the Address, it is most likely that the policies put forth will either be left to the next term of Government for implementation, or simply treated as empty discussions. It was like what happened four years ago when he first assumed office, he made promises, which were not meant to be realized, just for the purpose of satisfying our spirit.

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As a matter of fact, it will mean little even if contents of the Address are materialized. Since he usually expresses himself in "doublespeak", it makes little difference whether the policies are implemented or not. What is more, innovative ideas are wanting in this Policy Address, it is a lackluster piece which fails to put forth any new policy or new direction to resolve the problems currently facing Hong Kong.

The theme of this year's Policy Address is "Make Best Use of Opportunities, Develop the Economy, Improve People's Livelihood, Build an Inclusive Society". Like what Mr SHIU Ka-chun has said just now, together with several other colleagues, we have revised the theme into: "Opportunities Gone, Livelihood Retrogressed, 'Government-Business-Rural-Triad' Collusion, and Social Dissension". To me, the revision reflects the sentiment of many wage earners and grass-root citizens.

The SAR Government has all along stressed the importance of economic development. Admittedly, our robust economic growth was the most important factor driving Hong Kong's evolution into a global metropolis. Generally speaking, when a place enjoys good economic development, its living standards will rise accordingly and its livelihood will be improved. Therefore, I think people in general recognize the significance of economic development.

However, Hong Kong's economy has regrettably displayed an over-reliance on Mainland's support since the reunification and this certainly is not a blessing to us. The Policy Address attaches too much importance to "looking northward", loses sight of the vital role played by Hong Kong in the international market, and fails to map out any concrete strategy to take forward the development in Fintech. The Policy Address runs on for pages, what exactly has it raised? They are: the world's largest offshore Renminbi liquidity pool, the National 13th Five Year Plan, the Shenzhen-Hong Kong Stock Connect, CEPA, the Belt and Road Initiative, and so on. With such emphasis and reliance, the SAR Government and its people will only get empty mirages. Mirages aside, it offers no direction for either innovative development or self-development. Where is Hong Kong's economic development going? This Policy Address provides absolutely no answer. LEUNG Chun-ying has reiterated time and again the continual development of the financial market and financial services industry in Hong Kong. But regrettably, this Policy Address makes no mention of our laggard financial development vis-à-vis other countries and areas. How is he going to lead the long-term financial development of the territory?

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I must stress here that Hong Kong's economic development in recent years, as promoted by the Government, is highly distorted: benefits are skewed towards large consortia and enterprises, industries are getting homogenous, and development of small and medium enterprises is checked as they fall into prey to large enterprises. We may say that the ordinary public cannot partake any of the fruits of economic prosperity, and we see no advancement, only continued setbacks in livelihood. In 2015, three years after LEUNG Chun-ying took office, the poverty population in Hong Kong stood at 1 345 000, calculated with welfare subsidy factored out. The figure was some 30 000 greater than 1 312 000, which was the poverty population recorded in 2012 before he took office. Even when welfare subsidy was factored in, the poverty population still stood at 971 000, about 10 000 higher than the 2014 figure. The poverty problem in fact has not been improved in any significant measure. What we are actually asking for are not huge changes, just an end to the increase in poverty population, and yet we see growth instead. Hence, the wealth gap of Hong Kong still ranks among the top in the world. Despite Hong Kong's apparent economic prosperity, our economic gain goes only to a handful of rich, powerful people and vested interests at the end of the day. What else is left to the ordinary public then?

The biggest problem with Hong Kong's economy today is that industrial development is far too homogenous. Over the years, it has been focusing on bubble economies such as real estate and realty, finance, service industries, tourism, and so on. Leaning considerably on external economies, Hong Kong's economy is vulnerable to external factors and susceptible to extreme risk. But more importantly, these industries are mostly dominated by a few oligopolists. If our policies continue to slant towards them, it will only generate more potential risks to Hong Kong's economy, and bring benefits not to the general public but to existing economic giants only.

What Hong Kong now needs are support to its domestic economy and creation of more real economies, including local and community economies and some real innovative enterprises. The Government should allocate more resources for supporting self-made production and local production, for promoting bazaars, the entrepreneurial development of small shops, and so on, so as to help grass-roots citizens and women engage in production and the young utilize their creativity, with a view to releasing our development from the confines of an homogeneous set of industries. It is regrettable that this Policy Address has yet to suggest effective measure with regard to this aspect of 3812 LEGISLATIVE COUNCIL ― 15 February 2017 economic development, as it puts forth proposals only on collaboration with the Mainland. To the grassroots and to a wide social spectrum, these proposals are downright detached from their lives, ineffective and unhelpful.

Apart from developing the economies above, I believe the Government should be more proactive in the distribution of economic outcome. It must not blindly follow the free market and should relinquish the low and simple tax regime philosophy. The most direct and effective approach is to reform the existing tax regime, for instance, introducing progressive profits tax, tax on dividend income of significant amounts, vacant property tax, and so on. It should also allocate the $800 billion-plus fiscal reserves and various tax incomes appropriately, with special emphasis on livelihood policies so as to return the wealth to the people and to raise their standard of living.

Deputy President, I so submit.

MR WONG TING-KWONG (in Cantonese): Deputy President, this Policy Address is the last Policy Address of Chief Executive LEUNG Chun-ying in the term of office of this SAR Government. But it has set out specific and feasible planning for various livelihood, economic and land supply topics which are related to the long-term development of Hong Kong. These topics include assisting the disadvantaged, promoting innovation and technology development and re-industrialization, assisting Hong Kong in taking part in the development of 13th Five-Year Plan and the Belt and Road Initiative, increasing the supply of public and private housing, planning for long-term land supply, etc. This Policy Address is definitely not a policy agenda of a caretaker government, but a policy address with commitment and accomplishment. In this connection, I, the Democratic Alliance for the Betterment and Progress of Hong Kong ("DAB"), which I belong, and the Import and Export sector pledge our support to the Policy Address. And we hope that the next Chief Executive and SAR Government can follow the good direction laid down in this committed and accomplished Policy Address.

On the whole, this Policy Address is worthy of our support and affirmation. However, regarding promoting Hong Kong's economic development, the Policy Address focuses most of its policy measures on developing new industries in a longer time frame. There are very few measures on promoting the development of our traditional and pillar industries, or on helping small and medium LEGISLATIVE COUNCIL ― 15 February 2017 3813 enterprises ("SMEs") in Hong Kong to tide over the challenges in the present business environment, and no immediate measures is proposed to assist SMEs. In this regard, it is disappointing.

The present economic environment of Hong Kong is undoubtedly clouded by a load of external negative factors such as the uncertain trade policy of the United States, the rate hikes by the Federal Reserve, the Brexit, fluctuations in the Renminbi exchange rate and the feeble European economy. It is expected that our economic development and business environment will be plagued by these new factors.

Statistically speaking, for 2016 as a whole, the values of our total exports, re-exports and domestic exports dropped as compared with 2015, with the value of domestic exports decreased by 8.5%. A visible trade deficit of $420.1 billion was registered, equivalent to 10.5% of the value of imports of goods. The imports and exports trade in Hong Kong has experienced a dropping trend for more than a year, and the value of total retail sales in last year as a whole dropped by 8.1% as compared with the year before last.

Under this economic environment, SMEs have generally become less confident about their economic prospect and business performance in 2017. This year, the Hong Kong Productivity Council announced a drop of 0.6% of the Hong Kong SME Leading Business Index to 41.9 for the first quarter of 2017. The index has remained below the 50 threshold for two years, showing a prevailing fragile confidence among SMEs on their business.

Against this backdrop of uncertain economic outlook, it is worrying that Chief Executive LEUNG has put forth in his Policy Address the proposal of progressively abolishing the "offsetting" of severance payments or long service payments with Mandatory Provident Fund ("MPF") contributions and expressed his intention to map out within this Government term a standard working hours proposal. These have undoubtedly created much pressure on SMEs, micro-enterprises and entrepreneurs.

I can certainly understand that Chief Executive LEUNG has been subject to extensive pressure from the labour sector and society to implement the commitment he made in his Election Manifesto on solving the MPF "offsetting" problem. But I hope the SAR Government, honourable Members here and 3814 LEGISLATIVE COUNCIL ― 15 February 2017 members of the public can also understand that abolishing the "offsetting" arrangement will deal a serious blow to SMEs and micro-enterprises which have tight cash flow.

To begin with, many SMEs are now under very tight cash flow. Some of them even have to rely on loans to maintain their daily operation. A common Chinese saying, "10 kettles with nine lids", aptly describes their situation. Any unexpected expenditure will possibly rupture the capital chain of SMEs and micro-enterprises, forcing them to wind up their business. The present MPF "offsetting" arrangement unquestionably reduces the retirement protection rendered by the MPF Scheme, but it also saves SMEs and micro-enterprises from the risk of capital chain rupture due to a sudden need to make a large sum of long service payments for their retiring employees.

Worse still, in the case of operational difficulties, these SME and micro-enterprise bosses will inject every usable penny into their business operation as a last-ditch attempt to save their business. At this critical juncture, do you think they can still reserve capital for severance payments in the event of business failure and closure?

The Government now proposes to adjust downwards the level of severance payment or long service payment payable from the existing entitlement of two thirds of one month's wages to half a month's wages as compensation for each year of service; and in the 10 years after the implementation of the abolition, the Government will share half of the expenses on severance payments or long service payments in the first two years, with a 20% subsidy cut every two subsequent years until the eleventh year when employers will have to shoulder all the such payments.

Although the proposal is helpful in alleviating the pressure on SMEs and micro-enterprises, it still leaves a critical issue unresolved, and that is SMEs and micro-enterprises still have to use a large sum of cash to make unexpected severance payments or long service payments. SMEs and micro-enterprises are criminally liable to any defaults in severance payments or long service payments, despite due to tight cash flow, during the government subsidy period, to say nothing of their need to shoulder the full share of severance payments or long service payments after the 10-year period.

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In this connection, I hope the SAR Government can seriously and carefully listen to the concerns of these SMEs and micro-enterprises during the public consultation period, especially their pressure of having to deal with a sum of unexpected cash expenditure. Given that the Administration plans to spend almost $24 billion on abolishing the MPF "offsetting" arrangement, can it make use of the resources to relieve SMEs and micro-enterprises from such pressure and formulate a tripartite proposal balancing the interests of all these stakeholders?

There are now about 320 000 SMEs and micro-enterprises in Hong Kong. They occupy 98% of the commercial units in the territory, provide almost 1.3 million job opportunities and employ almost half of the private enterprise working population. They are an important pillar of our economy and play a critical role in the economic development of Hong Kong. SMEs and micro-enterprises are small-scale operations with little financial resources. Unlike large consortia, they are far less capable of countering crises. Predicting a bleak economic outlook, SMEs and micro-enterprises find it increasingly difficult to borrow money from banks. SMEs now mainly rely on the SME Financing Guarantee Scheme ("Scheme") and its special concessionary measures to tackle this problem. The Scheme helps them to obtain financing from banks with credit guarantee provided by the Hong Kong Mortgage Corporation. However, feedbacks from the industries in the past years show that the application procedure of the Scheme is very complicated and claims are handled very slowly, thus dampened their incentive to make financing applications. Besides, the interest rates of the Scheme are high, which is incongruent to the present low-rate environment. But another financing scheme with credit guarantee, the Special Loan Guarantee Scheme launched by the Government in December 2008, was well-received by SMEs. Given that the old one is better than the new one, the Government should find out the reason and consider relaunching the Special Loan Guarantee Scheme to replace the existing Scheme, and it should also streamline the different financing or fund application procedures so as to speed up the vetting and approval procedures with greater flexibility.

SMEs often drive the diversified development and upgrading of industries and the enhancement of technologies. They also serve as a platform for young people to display their creativity and set up their business. However, there are very few financing schemes available for SMEs in Hong Kong and there is no comprehensive policy to assist them. As a result, they cannot get any help to counter difficulties at economic downturns, nor can they serve as a means to help 3816 LEGISLATIVE COUNCIL ― 15 February 2017 the economy to upgrade and transform. Hence, the Government should attach greater importance to SMEs and micro-enterprises when it formulates its policies. I suggest the Government should consider further upgrading the existing SMEs Committee and let the Financial Secretary be its coordinator and convenor. The committee can serve as a platform to raise views on matters affecting the development of SMEs and micro-enterprises, with a view to improving their business environment through policies, legislation, capital, technologies, removal of their operational barriers, enhancing their competitiveness and facilitating their sustainable development.

The SAR Government should also make an extra effort to capture the opportunities rendered by major national strategies such as the Belt and Road Initiative and the 13th Five-Year Plan, in a bid to establish Hong Kong as a platform for Mainland enterprises to go global and facilitate local and Mainland enterprises to jointly compete in the global market. In the past 10-odd years since the implementation of CEPA, we were allowed to export products to the Mainland without tax, and the Mainland services and trading markets were opened to us with mutually-recognized professional qualifications. All these arrangements have enabled Hong Kong enterprises to enter the Mainland more smoothly for business expansion. With the accumulation of experience, the problem of "big door opened but small doors yet to be opened" is gradually, though not totally, resolved. We hope that the Government can make good use of the expanding networks of Hong Kong Economic and Trade Offices and Liaison Units in the Mainland as well as the CEPA Joint Working Group to take forward discussion between Hong Kong and the Mainland and to clear up obstacles for Hong Kong business operators to expand their business northward. According to some industry players, the Hong Kong SAR Offices in the Mainland cannot provide much assistance to them when they encounter operational problems in the Mainland. I suggest the Government to further consider setting up a complaint unit to specifically follow up these cases and provide legal assistance to Hong Kong business operators.

To date, Hong Kong and Guangdong are still quite different in terms of policy, legislation and market environment. In this connection, the Government should actively consider setting up in Guangdong a one-stop business information platform, in the form of website and information centre, to provide information on policy, legislation, financing channel, business management and market environment for merchants coming from Hong Kong, so as to help them actively develop their Mainland market. Moreover, many Mainland enterprises are now LEGISLATIVE COUNCIL ― 15 February 2017 3817 interested in establishing their business in Hong Kong and then develop their offshore markets. The platform mentioned above can also provide business information on Hong Kong for these enterprises, so that they can more quickly adapt to this new market and more smoothly develop their business here. Regarding professional services industries, the Government can also consider establishing a one-stop platform for professional service development in the China (Guangdong) Pilot Free Trade Zone regions in Qianhai, Nansha and Hengqin, so as to provide effective assistance for different industries entering the Mainland.

Deputy President, I also wish to talk about the development of the Hong Kong tourism industry. Tourism is a traditional economic pillar. It contributes to 5% of the Gross Domestic Product and provides a living for 270 000 people, accounting for 7.2% of total working population of Hong Kong. But the tourism industry has suffered setbacks in recent years. Affected by the drop in both visitor arrivals and visitor spending in Hong Kong, retail sales registered a year-on-year decline of 8.6% in volume terms from January to November 2016. We should be aware that inadequate room and facilities for tourism have been an issue in Hong Kong, and lacking new tourist spots has been another issue in recent years. Naturally, tourists will come less frequently when they find Hong Kong too crowded and lack new tourism spots. Hence, in order to save the tourism industry, the Government must step up publicity and promotion of Hong Kong as a hospitable city and try every means to find new tourist spots and increase room and facilities for tourism, so as to make Hong Kong more appealing to tourists.

I wish to inform Members of the progress of the boundary shopping mall in San Tin, which has taken years of planning. The assembling of the first batch of model shops is now completed. After obtaining the approval from the Buildings Department on the model shops, construction of shops can be kick started. The opening of the shopping mall is targeted at July this year. Undeniably, the preparation of the shopping mall is much more difficult than expected, which delays the commissioning date. In the past two years, I have been liaising between the Government, property owners, chambers of commerce and shop owners to find an appropriate location for constructing the shopping mall. The original intention is to divert tourists from other districts, so as to lessen the pressure on the communities in those districts in receiving tourists, and at the same time, provide an additional option for local residents to spend their leisure time. In face of the setbacks suffered by the tourism industry, some people are 3818 LEGISLATIVE COUNCIL ― 15 February 2017 concerned that the boundary shopping mall may be negatively affected. In fact, the San Tin boundary shopping mall will not only serve Mainland tourists, it will also be a new shopping location for international tourists and local residents. We should understand that there are often unexpected ups and downs in our economic development, and we should not overlook the overall and long-term planning and development of the tourism industry only because of short-term cyclical economic adjustments. In the long run, Hong Kong needs to expand the development of its tourism industry and enhance its software and hardware in receiving tourists, so as to attract more Mainland and overseas tourists to visit and spend their money in Hong Kong. We look forward to the early commissioning of the boundary shopping mall, so that it can serve as a new shopping venue for international tourists and local people.

Regarding financial policy, DAB and I welcome the Policy Address in that it has set out the measures the Government will do to promote business opportunities for different sectors of Hong Kong and facilitate cultural exchange under the national development strategy of the Belt and Road Initiative. We also hope that the SAR Government will seize the opportunity to fight for the Asian Infrastructure Investment Bank, the New Development Bank BRICS and the Silk Road Fund to establish their bases in Hong Kong when they take forward their financing, financial management and project risk management businesses, so as to showcase the unique financial edges of Hong Kong, and that the Government will make use of its reserve to fight for the issuance of underlying funds under the Silk Road Fund, so as to make use of our edge of having international talents to assist Hong Kong enterprises to invest in the Belt and Road Projects.

At the same time, the SAR Government should further strengthen cooperation with the Mainland financial sector, including actively exploring the proposal of connecting the futures markets in Hong Kong and the Mainland, so as to take advantage of the "London-Hong Kong Connect", a mechanism to be established in which the Hong Kong Futures Exchange and the London Metal Exchange will work as a connected system, to create a clearing platform between London, the Mainland and Hong Kong and a futures trading market connecting Europe and Asia.

We hope that an over-the-counter market and trading market covering the Mainland and Hong Kong as well as a connected bond system catering for cross-boundary bond trading, custody and clearing can be established, so that on LEGISLATIVE COUNCIL ― 15 February 2017 3819 the basis of accepting investment from overseas financial institutions and institutional investors in the China bond market, the Hong Kong bond market can be further developed. We also hope that the Government can actively consider issuing more bond products of different forms and currency units, including government bonds in Renminbi denomination and iBond, so as to broaden the investor base and also encourage the business sector to be innovative in their financial endeavours, including developing the new product market in the Mainland such as the green bonds issued in the Mainland.

Deputy President, with the gradual expansion of the system of Mainland-Hong Kong mutual recognition of financial products, funds issued by banking and insurance sectors in the two places will be mutually recognized and their corresponding markets will be linked, thus facilitating small and medium stock dealers and insurance companies in Hong Kong to set up their offices and businesses in the Mainland.

Last but not least, I wish to talk about the administrative problems facing the current Government. Since the election of LEUNG Chun-ying as Chief Executive, some members of the media industry with an ulterior motive have been trying every means to smear his character and create materials for the opposition camp to launch political attacks against LEUNG Chun-ying and the SAR Government. This has made the work progress of LEUNG Chun-ying and the SAR Government very difficult and also created the excuse for the opposition camp to exculpate themselves from being the schemer of savage acts, such as the Occupy Central movement and the Mong Kok riot.

Undoubtedly, a major problem facing our society is housing, a problem often described as "long-standing in time, massive in scale and intense in degree". The opposition camp has been criticizing the SAR Government for failing to address the housing problems of the people, while exhausting all means to stop the SAR Government from developing new land and constructing public housing. This shameless act of those who are "left" in form but "right" in essence fully illustrates how insincere the opposition camp is in their pledge of reversing the home-seeking plight of Hong Kong people. They want to use the grass-root housing problems to reap political mileage. Their evil intention is horrendous indeed.

The new round of the Chief Executive election is in the pipeline. Some ill-intentioned members of the media industry and the opposition camp have 3820 LEGISLATIVE COUNCIL ― 15 February 2017 started their new smearing action against candidates that are sincere in serving the Hong Kong public, affirmed by the Central Government and supported by majority Hong Kong people. I hope that members of the public can clearly see their contemptible motives. I also hope that after the new Chief Executive is elected, he or she will continue the policy direction of the incumbent SAR Government in vigorously developing new land and actively addressing people's housing problems.

But of course, new faces will bring in new cultures. Since the reunification, the SAR Government has encountered the problem of inadequate communication and coordination between Policy Bureaux and departments, which has undermined its administration. I hope that the new Chief Executive can reverse this situation and improve the quality of his or her governance, and more importantly, avoid letting these ill-intentioned members of the media industry and the opposition camp use it to undermine the credibility of his or her administration.

Deputy President, I find the Policy Address this year pragmatic and proactive, and I pledge my support to the Motion of Thanks. I so submit.

MR CHRISTOPHER CHEUNG (in Cantonese): Deputy President, this Policy Address is the swansong address of Chief Executive LEUNG Chun-ying, and is also the longest address during his term of office with more than 33 000 words and a total of 279 paragraphs. He is not slackening in his efforts even though he is going to leave his office in June. Instead, he is putting forward a lot of initiatives in order to comprehensively realize his promises made in his election manifesto five years ago, which tie in with his vision of developing the economy and improving people's livelihood. This does not look like the mindset of a caretaker Government but a proactive and capable Government, and this is commendable.

As a Member from the financial services sector, first of all, I would like to talk about financial services development. In this Policy Address, Chief Executive LEUNG Chun-ying is still placing much emphasis on the development of our sector and putting the financial section in the first part of the Policy Address. Besides, he has given an account of the achievements made in some substantial financial aspects. For instance, after the establishment of the Shanghai-Hong Kong Stock Connect, we need to launch the Shenzhen-Hong LEGISLATIVE COUNCIL ― 15 February 2017 3821

Kong Stock Connect, promote Hong Kong as the offshore Renminbi centre, strive for Hong Kong to be a member of the Asian Infrastructure Investment Bank ("AIIB"), and promote the development of financial technology.

I think the Chief Executive's commitment to support financial development is beyond doubt. He is also very concerned about the work of the Financial Services Development Council, Hong Kong ("FSDC"), and has particularly commented in detail on a whole page the achievement of FSDC in releasing 26 reports. However, it is a pity that the measures benefiting small and medium enterprises ("SMEs") are still limited in the Policy Address, while there are only just a few recommendations to support and care about the small and medium securities dealers. Nevertheless, I would like to say that the current development achievements of Hong Kong as a financial centre have very much to do with the hard work of the Chinese-invested brokers of our older generation. FSDC was set up under the fervent encouragement of the sector which thus has high expectations from it. Facing the operating difficulties of SMEs, it is our hope that FSDC can bring forth better recommendations for development. It is unfortunate that it has fallen short of our expectations and is unable to pass in the appraisal. If we only chase after the bubble reputation internationally but fail to recommend locally some practicable strategies, we are merely attending to the superficials but neglecting the essentials.

Therefore, it is our expectation that the current Government and the next Government will attach importance to the contributions of local Chinese-invested brokers and will create a level playing field to them. We are not asking the Government to give out money casually or dole out public money recklessly to our assistance. We only ask for fair treatment by not imposing the threshold meant for regulating large international financial institutions on our local brokers. Otherwise, we will have difficulties in operation and the operating environment will become worse.

The Chief Executive has recently launched the Technology Voucher Programme to particularly subsidize SMEs, including securities dealers of the financial services industry to improve their technological equipment in order to catch up with the rapid development of information technology. This is a benevolent initiative as securities dealers can also be benefited. However, the amount of subsidy is capped at $200,000. In my opinion, this is only a good start but does not represent everything we might consider or mean that the problem can be resolved. It is because huge amount of money usually has to be 3822 LEGISLATIVE COUNCIL ― 15 February 2017 invested in order to upgrade technological equipment and this cannot be afforded by general SMEs. If the Government can offer more assistance in the technological aspect, such as opening up a number of platforms or, in aligning ourselves with the development strategy of our nation's Belt and Road Initiative, proactively assisting us in launching authentication service for online account opening so as to provide the sector with a set of safe, acceptable and practicable authentication standards for online account opening, this will bring the sector to a new chapter by enabling the sector to catch up with the technological development of Hong Kong and restore its contributions to the financial services industry.

The Policy Address this year mentions that the Hong Kong Trade Development Council ("TDC") will collaborate with FSDC in the promotion of our financial services industry outside Hong Kong, so that we can continue to make contributions to our mother country as well as to Hong Kong. Our industry welcomes this initiative, but we hope that the Government can also look after the needs of SMEs so that they can also enjoy some business opportunities, particularly when the development strategy of the nation's Belt and Road Initiative will enter into a critical moment of development this year while the work of the AIIB is also in full swing. I believe that as an international financial centre, Hong Kong can properly play the role as the nation's super-connector in financial reform.

In my opinion, Hong Kong is fully qualified to play a more important role and exercise greater function in AIIB. I suggest that after bidding to join AIIB, the Government of the Special Administrative Region ("SAR") should further seek to set up the Hong Kong operating centre of AIIB, so that Hong Kong can give full play to its role as an international financial centre and can attract more multinational corporations to set up headquarters in Hong Kong, thus strengthening the financing function of our financial market and attracting corporations of Belt and Road countries to be listed in Hong Kong.

Besides, I also agree to the proposal in the Policy Address as to develop more financial products, in order to deepen and widen the financial market in Hong Kong. For instance, although the Shenzhen-Hong Kong Stock Connect is launched, the Primary Equity Connect is still not available and the futures products tracking the Shanghai Shenzhen CSI 300 Index have not been touched upon. However, in Singapore, which has been carrying on constructive competition with us, A50 Index Futures are now being traded on the Singapore LEGISLATIVE COUNCIL ― 15 February 2017 3823

Exchange, and we learn that the transactions are very active. Why does the SAR Government not striving for us in terms of the Shanghai Shenzhen CSI 300 Index?

As regards the development of exploring new markets, although CEPA allows local securities dealers to set up business in the Mainland as standalone entities, the threshold is very high, especially to the general SMEs. I thus think that the SAR Government should allow Hong Kong securities dealers to set up wholly owned branches in pilot zones of the Mainland, and they can be restricted to set up Mainland branches only engaging in businesses relating to the Southbound Trading Link of the Shanghai-Hong Kong Stock Connect and the Shenzhen-Hong Kong Stock Connect.

In order to boost Hong Kong's status as an offshore Renminbi centre, and attract the inflow of capital for the Mainland, we support developing more Renminbi denominated financial products to deepen and widen the market. In my opinion, we should not change our stance during the recent fluctuations of the Renminbi currency rate, because with Renminbi being taken as a Special Drawing Rights ("SDR") currency by the International Monetary Fund ("IMF"), I deeply believe that it will be used extensively and become more and more popular in the international arena. In this regard, Hong Kong precisely has much room for development.

Deputy President, I am concerned about the development of the financial market, as I take this as my lifelong career. The financial industry, being a high value-added industry, can provide good employment opportunities to young people. If Hong Kong can maintain the status as an international financial centre, other related industries can also be benefited. It thus has extensive marginal benefits which the Government should really not overlook. Nevertheless, if the Government is adopting a laissez-faire attitude, not maintaining a balance between quality and quantity, the development of this economic pillar industry will very likely take a downturn. I thus hope that the incumbent or the next Government will continue to work hard in maintaining the orderly development of the financial market, ensuring a fair, open and impartial operation of the market, stepping up enforcement against illegal acts such as market manipulation, and clearing out the fraudulent shares, with a view to boosting confidence of investors and restoring vitality of the market for its continuous growth.

3824 LEGISLATIVE COUNCIL ― 15 February 2017

It is a matter of course that Hong Kong is running a free market economy, and we are against the approach of the Government or the supervisory institutions which only resort to regulation or more and more stringent supervision, thus imposing unnecessary pressure on SMEs. With the coming into effect of a number of international agreements in recent years, the compliance costs in Hong Kong have greatly increased. If the regulatory institutions only go for easy targets and heavily penalize those dedicated securities dealers who have committed slight mistakes or force them to leave the industry, I will definitely not agree with them and this is also not conducive to the overall development of the financial market in Hong Kong.

We must work hard to explore new markets and products, so that members of the financial services sector can be given equal opportunities and equal share of the results of economic development. For example, if funds can be listed and traded on the stock market, or can be for sale by securities dealers during issuance of bonds, all parties concerned will be benefited and the whole financial industry will flourish, with the absence of such phenomenon as inequality rather than scarcity. I believe that only if the market is healthy and orderly can it attract high quality international corporations to be listed in Hong Kong which can make good use of the financing function of the local financial market, thus rendering our market stronger, the confidence of investors greater and our industry more sustainable.

In the promotion of economic development, I particularly appreciate the Chief Executive's efforts in meeting the challenge and striving for more opportunities for the development of Hong Kong. The existing venue of the Hong Kong Convention and Exhibition Centre ("HKCEC") in Wan Chai is indeed running out of space. However, there is not an expansion proposal acceptable by all parties. Once it is expanded, there will be problems in the arrangements to ease the traffic and the crowds, and the remedial measure concerning the sports facilities of that district is also a difficult question to handle. Hence, when the proposal of making use of the Wan Chai Sports Ground as part of the expansion project of HKCEC was first introduced, it received heated discussion. Nonetheless, I hope that different departments of the Government can work together for a comprehensive planning of HKCEC development so as to minimize regional resistance, in the hope that there will be one more highlights in the Hong Kong economy which can enjoy sustainable development and growth while creating more employment opportunities and business opportunities for the benefit of people's livelihood. I hope that agreement can be reached with the LEGISLATIVE COUNCIL ― 15 February 2017 3825 residents of that district on HKCEC services so that a win-win situation can be attained.

Development of tourism is also very important, as this can create employment opportunities for lower to middle class and can also benefit the retail and catering industries. Earlier on, due to a drop in the number of visitors to Hong Kong, local retail industries experienced an inclement winter. It is fortunate that with the help of the Government and the Hong Kong Tourism Board, the industries survived the inclement winter and we begin to feel a touch of spring at present.

Nevertheless, I think we still have to work hard and be innovative no matter in festive activities or tourist attractions, particularly when this year marked the 20th anniversary of Hong Kong's reunification with the Mainland, and we of course have to organize more activities to articulate the new image of Hong Kong after reunification and to attract more inbound tourists. Apart from allocating more funding, investing in propaganda, promoting and organizing mega events, the Government also has to seriously invest in hardware facilities. After the Hong Kong-Zhuhai-Macao Bridge is commissioned, how to make use of the artificial island with an area of 500 000 sq m to receive more tourists with a view to supporting the existing recreational facilities on Lantau Island, developing eco-tourism and increasing more tourist attractions and facilities, is also an imminent question facing the incumbent Government and the next administration. As a Chinese proverb goes, "the ancestors planted the trees, and their descendants enjoy the cool under the shade". I hope that after seeing this problem, the incumbent Chief Executive has already prepared some proposals, based on which we can improve the development project with collective wisdom. I hope that shortly after the next Government has assumed office, it can build on past achievements and do better in the future. In regard to housing and land issues, I will discuss them in due course.

Thank you, Deputy President, I so submit.

DR LAU SIU-LAI (in Cantonese): Deputy President, the economic measures in this Policy Address of LEUNG Chun-ying are characteristic of the SAR Government's long-standing economic policy of favouring the rich and powerful. They are heavily tilted and biased towards the rich, completely ignoring the 3826 LEGISLATIVE COUNCIL ― 15 February 2017 overall needs of society and Hong Kong people. That is why I find it very difficult to thank him.

To begin with, we must realize the very purpose of economic activities. The purpose is to improve people's livelihood or to provide them with basic livelihood protection. Society is understandably made up of different social strata, and we are not saying that the living standards of all Hong Kong people must be the same and each of them must be given the same amount of resources. But while an economic policy should seek to increase the wealth of the wealthy, it should also aim to raise the living standards of the poor, so that they can all live a reasonable life. Sadly, we can see that the economic policy of LEUNG Chun-ying has always been biased heavily towards the property development and financial industries, condoning their dominance and ignoring the needs of the middle class and grass-root people.

Nowadays, every society is faced with global economic competition, which is why we must upgrade our own competitiveness. I too do not advocate any heavy exploitation of the financial industries and capitalists. Yet, we must note that these capitalists are the only ones who can survive and upgrade themselves in the fierce global competition. If our internal economic policies cannot protect the well-being of the common people, the wealth gap in our society will definitely get wider and wider, because these capitalists can change their business strategies any time they want to or simply pull out their capitals altogether. This explains why the working-class people and the grassroots in developed places are invariably pressured by some kind of "downward mobility" that makes the poor even poorer.

Any overall economic policy should be people-oriented, aiming to protect all social strata against deprivation and give them livelihood protection. Consequently, labour protection and retirement protection are indispensable. Besides, we must also check whether there can be a more equitable economic strategy that can enable the masses to live more happily and freely, and to cultivate a sense of belonging to this society.

What will become of a society that neither offers any social security nor follows an equitable economic policy? We often talk about our GDP growth in isolation and boast of our economic success. But has it ever occurred to us that the life of elderly and grass-root people is getting more and more miserable? Out there in the streets, more and more elderly persons must live a difficult life of LEGISLATIVE COUNCIL ― 15 February 2017 3827 scavenging, and even middle-aged people are beginning to do so. When such scenes become more and more common in our society, do we feel sorry? Can we actually put in place a more equitable policy to deliver the broad masses of grass-root and elderly people from such a miserable life?

Actually, apart from emphasizing our GDP at the macro level, we must also note that we should support the local community economy in the midst of all the global competition. Let me use the Link Real Estate Investment Trust ("Link REIT") as an example. Twelve years ago, speculation was encouraged in the name of economic development, so the Link REIT was put on the speculative market, and exploitation of the local market by multi-national syndicates has since been condoned, with the result that the broad masses of grass-root people have faced not only fierce employment competition but also high commodity prices and lack of goods variety in the course of consumption. For this reason, grass-root people have suffered immensely over the past decade or so.

LEUNG Chun-ying has repeatedly said that he wants to conquer the very big mountain called Link REIT. But I frankly cannot see any measures in the Policy Address. Suppose we look at the whole thing from another angle, aiming at balanced economic development rather than condoning speculation, what can we do? Well, we can actually develop the local community economy, one example being the development of bazaars.

There will be many benefits if we can give the ordinary people sufficient lands, space and appropriate policies for the development of bazaars, so that they can engage in goods trading with a low threshold. On the one hand, the right of grass-root people to earn a living can be protected, and they can then create jobs and identify means of subsisting within their own strata. In this way, society will not think that grass-root people must depend on welfare assistance and cannot stand on their own feet. Bazaars can enable grass-root people to stand on their own feet. This is the first desirable result. What is the other result? The answer is that they can easily trade in a bazaar with a low threshold and in turn build up connections in local communities. When kaifongs walk past a bazaar, they can chat with stall operators, buy quality goods at low prices and get to know one another, in contrast to the sense of alienation felt in a cold, modern city. At the same time, such bazaars of the common people can enable elderly people and women to make their own commodities and products with their personal talents, thus giving them a sense of fulfilment in life. In this way, they will be able to apply their talents to their jobs or work, bringing to themselves the greatest 3828 LEGISLATIVE COUNCIL ― 15 February 2017 degree of satisfaction and hope. More importantly, if we can establish some permanent bazaars with local colours, we will see that such local community economic activities can also promote tourism development, apart from serving the grassroots.

Nowadays, what do visitors see in Hong Kong? Mostly international brand name products without any local colours. Many visitors may wonder why they should visit Hong Kong, as such brand name products can be bought anywhere else. What visitors wish to see in Hong Kong is our unique local culture, and they want to have in-depth tours in Hong Kong. But then this very city has turned increasingly devoid of any local colours. The real development of bazaars can in fact also promote tourism development. But before these local community economic activities can really take place, the support of sound economic policies or the policy support of other bureaux must be available.

What is the present stance of the Government on the development of bazaars? Well, the matter is handled by the Food and Health Bureau. However, it is impossible to support and promote the development of bazaars simply from the perspective of environmental hygiene. The setting up of a bazaar needs lands. That is why a clear list of bazaar sites should be compiled, so that organizations can know which sites are available. In this way, they can initiate consultation and join hands with the general public to consider which sites are suitable for developing bazaars. There must be a fresh start for the development of bazaars, and we must cooperate with non-governmental organizations in order to identify a suitable mode of operation. Hence, it is necessary to put in a certain sum of money as seed fund. More importantly, since the development of bazaars involves many ordinances and types of licences, the support of different government departments is required. I therefore hope that this particular economic policy can be promoted and developed under simpler procedures and with vigour. It is only in this way that different social strata can come to think that this is a livable city.

I want to emphasize the point that a city must be livable not only to rich people. Someone may be living in her la la land, not knowing where to buy toilet rolls or how to take the Mass Transit Railway ("MTR"). But has it ever occurred to us that toilet rolls are made by the grassroots and MTR compartments are cleaned by the grassroots? No city can possibly ignore the grassroots. I hope everyone can realize that a city can be described as livable only when everyone living in it is happy. What we need is this kind of people-oriented LEGISLATIVE COUNCIL ― 15 February 2017 3829 economic mindset, one which can give hope to all strata of people living in a city. I therefore urge the Government―the current-term Government or any other governments―to go in the direction of developing the local community economy, so as to enable the interests of different social strata to receive equal attention and give new hope to Hong Kong.

I observe that this Policy Address of LEUNG Chun-ying does not say anything whatsoever about a bazaar policy, something that was promised many years ago. It does not say anything about how to tackle the Link REIT either. As a result, it is very difficult for us to thank him. I can even say that we can only express deep regret.

Thank you.

MR YIU SI-WING (in Cantonese): Deputy President, I speak in support of the Motion of Thanks today. The Chief Executive, Mr LEUNG Chun-ying, has already decided that he would not seek re-election and thus, this is the final Policy Address he delivered in office. It seems that the Policy Address is delivered in greater length and with richer and more comprehensive contents, and it can be regarded as a summary of the work of the current term Government in the last five years. Specialized and detailed discussions have been provided on problems caused by the deep-rooted conflicts in the society of Hong Kong in such areas as housing, ageing population, retirement protection, health care services, and so on.

Deputy President, not many paragraphs are devoted to tourism in the Policy Address this year. New initiatives proposed in this regard are not too many and they can mainly be summarized in the following few points: Firstly, given the shortfall of convention and exhibition venues, the Wan Chai Sports Ground will be used for developing new convention and exhibition facilities in 2019; secondly, to celebrate the 20th anniversary of Hong Kong's return to the Motherland, the Government and the Hong Kong Tourism Board ("HKTB") will hold a number of mega events, including summits, heritage exhibitions, large-scale sports events and light shows, to attract more high-yield overnight visitors; thirdly, the Government will invite a tender this year for the Kai Tak Tourism Node in the vicinity of the Kai Tak Cruise Terminal to develop a world-class tourist attraction.

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As a matter of fact, apart from the events proposed for the celebration of the 20th anniversary of Hong Kong's return to the Motherland, which can create a stimulus effect for the tourism industry in the coming year, long-term planning would be required for other initiatives. Among them, Kai Tak Tourism Node is a part of the Kai Tak Fantasy project proposed years ago rather than a new initiative. Furthermore, practical measures in the short and medium term are not available in the Policy Address to support the development of the tourism industry.

On the contrary, in other parts and paragraphs of the Policy Address which have nothing to do with tourism, we can find quite a number of initiatives which are conducive to the development of the tourism industry and these include:

Firstly, the relaxation of visa requirements. The Government has reached a consensus with Belarus on mutual visa exemption and is planning to relax visa requirements for Cambodian nationals;

Secondly, the implementation of rural conservation pilot projects in areas such as Tai O, Shui Hau and Pui O of Lantau to take forward various rural conservation initiatives, including nature conservation and education, revitalization of old village buildings as well as promotion of ecological and cultural tourism;

Thirdly, improving a number of remote public piers to facilitate public and visitor access to outing destinations and natural heritage, and the first phase will cover about 10 public piers in the New Territories and the Islands District;

Fourthly, supporting the conservation of rural areas through harnessing community efforts, and taking forward revitalization projects in Lai Chi Wo to rejuvenate its ecological, cultural and architectural environment;

Fifthly, creating a "bicycle-friendly" environment by providing cycle tracks in new development areas such as Hung Shui Kiu and Yuen Long South; extending the cycle track network within the open spaces of the Kai Tak Development Area to about 13 km; linking up the existing scattered sections of cycle tracks in the New Territories to provide a cycle track of 82 km connecting the eastern and western New Territories;

Sixthly, the implementation of the Revitalising Historic Buildings Through Partnership Scheme which involves 19 historic buildings, and eight among them LEGISLATIVE COUNCIL ― 15 February 2017 3831 have completed revitalization works and are open to the public. Among these, four have won the Asia-Pacific Awards for Cultural Heritage Conservation from the United Nations Educational, Scientific and Cultural Organization;

Seventhly, the completion of a number of art and cultural facilities in the West Kowloon Cultural District ("WKCD") one after another, and the taking forward of the development of the Hong Kong Palace Museum in WKCD to enhance its attractiveness to both locals and visitors from the Mainland and overseas; and

Eighthly, organizing for the film sector Belt and Road promotional tours to countries with market potential, such as Iran, Indonesia, Malaysia and India, with a view to attracting film producers to come to Hong Kong for post-production and location filming and production facilitation services.

The above eight initiatives are closely related to the tourism industry, but they are included in different parts and paragraphs of the Policy Address and will be taken forward by different Policy Bureaux. Just imagine, if a Tourism Bureau is established, the initiatives mentioned above will be collectively reflected in the coordination of tourism resources, and more tourism planning in a wider sense can be inspired.

Deputy President, a Tourism Bureau can be found in many countries and places to coordinate, regulate and promote the development of tourism, but such duties are now respectively taken up by three organizations in Hong Kong, namely, the Tourism Commission, the Travel Industry Council of Hong Kong and HKTB. The Travel Industry Authority ("TIA") proposed to be established will only be tasked with trade regulation and issues concerning tourism planning will not be addressed. Hence, trade members generally call for the setting up of a Tourism Bureau and hope that the Government would give active consideration to the proposal. However, under the current circumstances, the setting up of TIA is an established fact. In order to ensure the healthy development of the tourism industry, we hope that the Government would consider establishing a cross-bureaux and high-level committee to assist and coordinate the work of different Policy Bureaux in taking forward various tourism-related projects, so that these projects will achieve the greatest effectiveness to the largest extent. Various Policy Bureaux should not be allowed to maintain the existing practice of going their own way without communication and coordination during policy implementation.

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Deputy President, the legislative process of the proposed ordinance on the establishment of TIA has already commenced. The legislative exercise will bring about tremendous changes to the licensing and regulatory regimes for travel agencies, tour escorts and tourist guides, and create great impacts on the business ecology of travel agencies. I hope the Government would continue to listen to the views expressed by the industry during the legislative process, so that the proposed ordinance will accomplish the intended regulatory effects, while at the same time will not stifle the development of the trade, and will even be able to achieve the effect of supporting the sustainable development of the tourism industry.

The tourism industry of Hong Kong has been exposed to various degrees of challenges in the last two years, thus affecting directly the economy and employment situation of Hong Kong. It is our hope that greater importance will be attached by the Government of the next term to the development of the tourism industry. The Government should not find excuses of not doing anything about it on the one hand, while emphasizing on the other hand that the tourism industry is one of the four economic pillars of Hong Kong. Ever since I joined the Legislative Council in the last term, I have been proposing to the Government that short-, medium- and long-term tourism planning initiatives have to be formulated to develop tourism in Hong Kong in a coordinated and well-planned manner. However, after a lapse of few years, apart from pursuing improvements to the existing facilities, not many concrete measures have been formulated to help relieving the tourism industry from its plight.

By contrast, neighbouring places like Hengqin in Zhuhai and Macao are making their tourism planning in a well-planned and orderly manner, and there are indeed many experiences for Hong Kong to draw reference from. Take Macao as an example. As the gambling business of Macao has suffered a serious setback since the launching of the anti-corruption campaign in the Mainland a few years ago, Macao has changed its planning objective to building the city into a world centre for tourism and leisure, thereby transforming itself strategically from a purely gambling city into a place for family holiday tours. Although the annual total visitor arrivals in Macao for 2016 have only increased slightly by 0.8% when compared with those for 2015, the total overnight visitor arrivals have increased by 10%. As for Hong Kong, the total number of visitors we received last year have decreased by 4.5%. It can thus be seen that we should map out the development plan for tourism in a well-planned and orderly LEGISLATIVE COUNCIL ― 15 February 2017 3833 manner so that the industry will remain invincible in the face of an ever-changing economic environment.

Deputy President, since the introduction of the Individual Visit Scheme by the Mainland in 2003, inbound tourism of Hong Kong has undoubtedly relied heavily on the Mainland market, and over 75% of the total visitor arrivals are visitors from the Mainland. Given the consumer demand of Mainland visitors, Hong Kong has been focusing its publicity efforts on traditional tourist attractions and shopping destinations, and investing mainly in man-made attractions. However, as man-made attractions require huge investments and a duplicate can easily be found elsewhere, continuous efforts have to be made to inject new elements into the attractions, lest they will lose their attractiveness. Hong Kong's reputation as a shopping paradise is also threatened by competition from neighbouring regions and the change in spending pattern of Mainland visitors, and hence the relevant Policy Bureau does have the responsibility to readjust the arrangements made in tourism investment and advertising strategy.

As we can see, the Government has spared no efforts in promoting mega events in recent years, including the highly popular Hong Kong Sevens, which has a history of 40 years. According to a survey, 44% of race goers in the event are overseas visitors and their average spending is as much as $21,000 per visitor, generating a revenue of $370 million every year and making the event the most successful mega event in Hong Kong. Events held in recent years such as the Hong Kong Wine and Dine Festival, Hong Kong Cyclothon and the Formula E motor racing championship staged last year are all mega events which have potential for further development.

HKTB is now planning to invite organizers of world-renowned electronic competitive sports to host their events in Hong Kong. Surveys indicate that the value of gambling on electronic competitive sports has already exceeded that on golf and rugby and this has become the seventh largest industry in the world. It has huge market potential and enjoys great popularity among young people. I hope such emerging industries could be developed into signature mega events which enjoy international reputation, so as to attract more high-yield overnight visitors and enhance the international image and status of Hong Kong.

Deputy President, HKTB will launch the Old Town Central promotional campaign this year to reintegrate various tourist attractions in Central with a view to providing visitors with different routes for self-guided walk, which cover 3834 LEGISLATIVE COUNCIL ― 15 February 2017 different themes such as historical architecture, art and culture, modern living, dining and entertainment, and so on. I consider the approach worth encouraging. We should start from local culture and characteristics if we want to promote diversification of the tourism development of Hong Kong.

Hong Kong is a place of cultural diversity and has a rich variety of intangible cultural heritage, and 10 of these intangible cultural heritage items have already been inscribed onto the national list of intangible cultural heritage. Among them, the Tai Hang fire dragon dance, the Cheung Chau Jiao Festival and the dragon boat race during the Dragon Boat Festival are favourite festive activities for visitors. There are 480 items in the First Intangible Cultural Heritage Inventory of Hong Kong, and these items form the treasure trove of our tourism resources. Take martial art as an example. Over 10 categories of martial art are included in the Inventory, including Tai Chi Tanglangquan (Praying Mantis Boxing) which is originated from Shandong in the north and brought to Hong Kong in the south, Shaolin Tiebigong (Iron Arm Skill) which is one of the 72 Shaolin martial art skills and Hung Gar Kuen Style (Hung Fist) of Foshan. The successors of these branches of martial art settled in Hong Kong in time of war and started teaching the art skills. Together with other local branches of martial art in Hong Kong, a stirring of interest was created in learning martial art, and dragon dance, lion dance have also become essential performing arts items on festive days. Therefore, we should explore these items further so that promotional campaigns might be launched to help boost tourism.

Deputy President, green tourism has grown in popularity worldwide, and Hong Kong has been regarded as a hikers' paradise by a lot of visitors because there are numerous hiking routes in the territory, and they are located in close proximity to urban areas and can conveniently be accessed by different modes of transport. MacLehose Trail has been cited as one of the world's top 20 hiking trails by the United States National Geographic Channel, and as early as in 2004, the Dragon's Back was named the most celebrated urban hiking trail by the Time magazine. The number of visitors to country parks is as high as 11 millions every year, and many overseas visitors have come specially for hiking and bird-watching. Besides, the Hong Kong Global Geopark is a recognized global geopark under the United Nations Educational, Scientific and Cultural Organization, and a rare example of global geopark in a cosmopolitan city. After more than two years of publicity, the volcanic rock in the East Dam of High Island Reservoir in Sai Kung has also gained more attention and grown in popularity.

LEGISLATIVE COUNCIL ― 15 February 2017 3835

Such local characteristics in Hong Kong can actually offer us abundant resources for development. Hong Kong is a premier tourist city in the world, and in the Top 100 City Destinations Ranking announced by the Euromonitor International Limited, it ranked first in 2015 for seven consecutive years with a record of 26.69 millions overnight visitors that year. This has best illustrated Hong Kong's attractiveness to high spending visitors, and we should repackage our tourist resources to turn day trip visitors to overnight visitors and encourage overnight visitors to stay a few days more, so as to move our tourism industry up the value chain.

The development of tourism with local elements does not necessarily involve the provision of large attractions. We can just start by using the resources at hand and adding into the existing facilities the elements needed to satisfy visitors, and then followed by a focused and phased publicity programme to promote and publicize these distinctive tourist resources of Hong Kong to visitors from all over the world and local people, thereby conserving and transmitting such resources and bringing multiple benefits to the industry. The city's position as an events capital, the diversification of local culture and the natural environmental features are all valuable resources of Hong Kong. It is the responsibility of the Government to protect and publicize these resources in order to show to the world a more precious side of Hong Kong.

Deputy President, I so submit.

MR CHAN CHI-CHUEN (in Cantonese): Deputy President, this is the fifth and final Policy Address delivered by LEUNG Chun-ying since he assumed office. Therefore, fellow Members, the media and members of the public would try to check the list of commitments in his election manifesto as well as the list of measures proposed in the previous Policy Addresses he delivered, so as to find out what empty promises he has made and what proposed measures he has put into practice.

However, LEUNG Chun-ying's nature as a "big liar" has not changed a bit and in paragraph 276 of the Policy Address this year, he dared to say that all commitments in his election manifesto had basically been implemented. Who is he trying to deceive? How many people would believe him? If someone has to compile a dictionary and identify an example to explain the meaning of the word "self-deception", I think this should be the best case for illustration.

3836 LEGISLATIVE COUNCIL ― 15 February 2017

What LEUNG Chun-ying has done in his governance during the past five years should be obvious to all. When he said that we should "rise to the challenges ahead", he has actually "escaped from meeting the challenges ahead", and he has acted impressively at the very beginning but done badly at the end whenever a complex issue was encountered. For example, he has failed to perform up to public expectation and achieve the desired results as far as the following issues are concerned: the abolition of the Mandatory Provident Fund offsetting mechanism, standard working hours, public housing production, universal retirement protection. As for other issues which are not controversial at all, such as the asset and income limits applicable under the Old Age Living Allowance Scheme, he has refused to revise the limits and has only announced a slight relaxation even though they are considered too low by Members of all political parties and groups in the Legislative Council.

Deputy President, since I started my working life as a member of the broadcasting industry, I have paid special attention to the Government's broadcasting policies, the development of the television industry in particular. In paragraph 179 of his first Policy Address, LEUNG Chun-ying pointed out: "Over the past decades, Hong Kong's television drama, music, films … have gained immense popularity in overseas Chinese communities. Talented … professionals … are not only making their way to Hollywood, but are also engaged extensively in film and television production in both the Mainland and Taiwan. The impact of Hong Kong culture on other cities is testimony to the abundance of our creative talents. Given suitable support, Hong Kong can scale new heights in cultural and arts development."

As we may recall, there were indeed some very blooming days of the television and film industries of Hong Kong in the 1980s and 1990s, but things are no longer what they were before. Not only has the Government failed to provide "suitable support" as suggested in the Policy Address, it has also created a lot of obstacles for the development of the industries. The current debate session covers the policy areas of commerce and industry as well as economic development, and the prosperous development of the television industry and popular culture industry does have a very close relationship with the overall economic development of Hong Kong.

Mr YIU Si-wing has just mentioned the tourism industry of Hong Kong in his speech, and I remember that a lot of overseas visitors were attracted to Hong Kong back in those days when our television and film industries were in full bloom. What we witness now is just the same. The success of Korean LEGISLATIVE COUNCIL ― 15 February 2017 3837 television dramas has attracted a large number of Hong Kong people to go sightseeing and shopping in South Korea. Hence, a strong popular culture could have a very great impact on the economic development of Hong Kong, and both the catering industry and fashion industry would be benefited. If television programmes produced in Hong Kong are still the "must-watch" entertainment programmes for Mainlanders, Taiwanese and even Korean, Southeast Asian people every day, the economic outlook of Hong Kong will definitely be very much different from what it is today.

Hong Kong's broadcasting industry has been hit by a calamity in the recent five years with the closing down of a number of media organizations one after another. Digital Broadcasting Corporation Hong Kong Limited ("DBC") has terminated its business last year, Metro Broadcast Corporation Limited ("Metro") and Phoenix U Radio Limited ("Phoenix U") have separately surrendered their digital audio broadcasting licence, and Asia Television Limited ("ATV") has terminated the operation of its domestic free television programme service in April last year. However, although Ricky WONG has displayed the greatest ambition on and is most interested in developing a television business, his plans have run into snags everywhere because the LEUNG Chun-ying Government has repeatedly created a lot of obstacles for him, making it unreasonably difficult for him to apply for a domestic free television programme service licence.

It is a cold winter for the media sector during the five years' governance by LEUNG Chun-ying. The Government should of course not be made to take all the blame for the diminishing influence of the media industry, but what exactly has the SAR Government done for the creative industries, especially the television industry over the past five years? As we all know, the television industry plays a very important part of the whole creative industry, and all singers, celebrities, members of front-stage and backstage staff who hit great success in the movie and digital entertainment industries have all built up their fame first when they were working as trainees in television stations. This industry chain is now at stake as the television industry is beginning to decline. Has the Government formulated any policies specially for the television industry, or has it washed its hand of everything and simply let the industry run its own course and fend for itself? Things may in fact be better if such an attitude is really adopted but I, on the contrary, have the feeling that the Government would only try to create obstacles for the industry. I am not trying to blame Secretary Gregory SO because as we all know, the licensing control for domestic free television programme service is in the hand of that "one single man".

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Relatively speaking, the Government has put in more efforts to promote the development of the film industry, and has set up the Film Development Fund and the Create Hong Kong office. As far as the film industry is concerned, it is proposed in paragraph 34 on creative industries of the Policy Address this year that efforts should be made to attract film producers of the Belt and Road countries such as Iran, Indonesia, India to come to Hong Kong for location filming. A review should be made two years later on how the initiative has been implemented, so as to find out location filming has been conducted for how many Iranian, Indian, Indonesian, Malaysian films here in Hong Kong, and what economic benefits have thus been generated.

I always look forward to the announcement of the Government's policy on the television industry during the delivery of the policy address every year, but not a single word has been mentioned all these years. While ATV has already closed down, Television Broadcast Limited has also not been doing as well as before, and the television industry of such places as Taiwan, South Korea and Mainland China has already outperformed that of Hong Kong, rendering it necessary for singers and performing artists in Hong Kong to develop their career in the Mainland and Taiwan. How did it happen, and where did such a change come from? Does the Government have any role and responsibility at all? Is it the Government's intention to sit still, do nothing and let our television industry become a sunset industry? We are now watching Korean, Japanese, Taiwanese and Mainland-produced dramas, but it seems difficult for us to name some good dramas produced recently in Hong Kong.

It is noted that there are currently three companies planning to apply for a domestic free television programme service licence, namely, Hong Kong Television Network Limited, Phoenix Hong Kong Television Limited and Forever Top (Asia) Limited. Among them, Forever Top (Asia) Limited has already asked the Government to put on hold the processing of its application when the application procedures have not yet completed. Earlier, Hong Kong Cable Television Limited has also informed the Government that its subsidiary, Fantastic Television Limited, would put on hold its application for the use of terrestrial airwaves. It can thus be seen that investors of the television industry are really concerned about the future development of the industry, and are therefore hesitated to commit a significant investment in this regard, or are even planning for an escape from a huge loss before it is too late.

While the Government has rejected a licence application back then, no one is willing to commit a significant investment today when the Government is ready LEGISLATIVE COUNCIL ― 15 February 2017 3839 to grant a licence. As for digital audio broadcasting, this is nothing but a bubble that can never escape the fate of bursting. After Phoenix U has announced in 2015 the termination of its digital audio broadcasting service, DBC and Metro also surrendered their digital audio broadcasting licence on the grounds that the pace of development has fallen below their expectation.

I started working in a radio station in 1994 and since then, there have been many discussions about the launching of digital audio broadcasting. According to the arguments put forward back then, digital audio broadcasting would render the transmission of text images possible and offer better sound quality. However, as far as the transmission of text images is concerned, digital audio broadcasting has completely lost its competitive edge in the Internet world. As for sound quality, it turns out that people nowadays do not attach very great importance to this aspect because the contents of information are much more important. As all commercial operators of digital audio broadcasting service have already withdrawn from the market, Radio Television Hong Kong is the only broadcaster left to pant for the last gasp and provide the public with the service. If its digital audio broadcasting service is also terminated, I will certainly ask the Government to buy back all the digital radios in my possession.

According to the Government, a policy review would be conducted on digital audio broadcasting, but although the review has not yet completed, I am sure and we all should know that it is not likely that any good results would be obtained. I hope the Government would "cut loss" as early as possible and save the resources for developing other programmes. Resources should also be made available to give focused attention to the development of free digital terrestrial television service.

In fact, discussions on the Policy Address this year should not be confined to the one delivered by LEUNG Chun-ying, but should also include the proposals put forward by candidates of the Chief Executive Election, and I have also paid attention to this aspect. Carrie LAM has just released a booklet consisting of over 40 pages, and instead of an election manifesto, it looks more like an autobiography or a personal photo album that we found in the 1980s. It is stated in the booklet that efforts should be devoted to develop the creative industries of Hong Kong, including the cultural industry, because cultural connotations are among the important soft powers behind city development and economic development. I cannot agree more with her in this regard, but how should we develop the creative industries?

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What have the principal officials done about the television policy over the past five years when they are in office? John TSANG also indicates that we should support and enhance the development of cultural and creative industries, with special target at areas with competitive advantages such as film, popular music, animation, design, art trade, thereby expanding into the international market, but he does not dare to mention the television industry. I hope all candidates of the Chief Executive Election would try to do something to save our television industry, which was once the most successful industry and the most blossoming soft power of Hong Kong, and would not just pay lip service to supporting the development of cultural and creative industries.

I so submit.

MR WU CHI-WAI (in Cantonese): This is LEUNG Chun-ying's last Policy Address. Though LEUNG Chun-ying has apparently given up his usual practice of struggling and provoking social conflicts, he is still adopting the kind of governance which violates Hong Kong people's will. In dealing with many problems, he has much said but little done, and has even give up his tasks midway in numerous occasions. Despite having been able to point out the crux of the problems, he handled them using the worse means possible. Probably he had good intentions, yet the means he adopted were ridiculous to the bone.

LEUNG Chun-ying only focused his speech on the people's livelihood when concluding his Policy Address without introspecting any of the irreconcilable contradictions brought by his governance in the last five years. He owes Hong Kong people an apology. The Democratic Party expresses utter disapproval and regret in respect of this.

LEUNG Chun-ying did not mention the constitutional reform in his Policy Address at all, nor did he truthfully summarize the faults in his governance, especially the damage to society because of his administration based on cronyism and struggling. This certainly does not help in alerting and reminding the candidates of the Chief Executive Election to prevent Hong Kong from taking the course of "LEUNG Chun-ying 2.0" again in the future.

As regards LEUNG Chun-ying's self-perception that he has honoured most of his election pledges, the Democratic Party considers this as another example of LEGISLATIVE COUNCIL ― 15 February 2017 3841 his "hypocritical rhetoric". He regards that he has fulfilled many pledges despite having merely finished them in part, or not even having started working on the tasks at all. Examples are universal retirement protection, standard working hours and many other issues about the people's livelihood. Many of his unfinished tasks will have to be handled by the next Government then.

Therefore, with regard to this Policy Address, the Democratic Party can only take it for a report under which LEUNG Chun-ying attempts to justify and glorify himself, and to hide his wrongdoings while bragging about himself by repeating any previous achievements. Such a report is totally not up to standard and without quality, nor is it showing any remorse in him. He has not introspected about the problems of his governance over the last few years, neither has he offered a way out for the next Government so that it can restart afresh.

(THE PRESIDENT resumed the Chair)

Regarding the measures about industry, commerce and economy proposed in the Policy Address, this "LEUNG Chun-ying style" can be seen over all the paragraphs as well. One major dispute concerning the Policy Address is the proposal to use the Wan Chai Sports Ground for comprehensive development. We recognize a lack of convention and exhibition venues in Hong Kong, but why does the Government not develop the site adjacent to the AsiaWorld-Expo on Lantau earmarked for this purpose, instead of changing the use of the Sports Ground? Up to this moment, the Government has yet to account for such an option to take the hard route but not the easy one.

Another example is the development of Hong Kong/Shenzhen Innovation and Technology Park in the Lok Ma Chau Loop. The Government's arrangement to directly engage the Hong Kong Science and Technology Parks Corporation ("HKSTPC") as the manager of the Lok Ma Chau Loop has been subject to queries in society too. Though the Government explains that HKSTPC has experience in developing science parks, yet it is the best way to adopt a single management model? Does the Government have to confirm assigning HKSTPC for managing the project right at this stage? Is it necessary to handle the project concerned by adopting the existing management model?

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Speaking of the Development of Lok Ma Chau Loop, I would like to thoroughly discuss re-industrialization in Hong Kong, and this is exactly why we believe that HKSTPC may not be capable to handle the project. Since the Government has established the Innovation and Technology Bureau, re-industrialization has become one of the Government's major policies. The Secretary for Innovation and Technology has mentioned re-industrialization in different occasions, pointing out that re-industrialization means focusing on the three areas of robotics, healthy ageing and smart city. That said, in both the past and current Policy Addresses, LEUNG Chun-ying says that re-industrialization should include "biotechnology, big data, the Internet of Things, artificial intelligence and smart city".

The Government's descriptions of re-industrialization vary in different occasions, so what exactly does the Government mean by re-industrialization? What kind of blueprint is there? How will it benefit people in different social classes? How is it going to turn the slogan of re-industrialization into practical action, and even into a locomotive for a diversified economy in the future? The Policy Address has given no answer for these questions.

The Government states in the Policy Address that tax and financial concessions will be offered in order to promote innovation and technology. The Democratic Party believes that the Government should clarify the blueprint and goal of re-industrialization before introducing any policies. We consider that, by promoting re-industrialization, the Government must set its sight on taking forward new industrial production, so as to diversify Hong Kong's economy and benefit people in different social strata.

Promoting diversified industrial development means not to put all your eggs in one basket, so that Hong Kong's economy can withstand downturns in different cycles of different industries. So, when the financial or the tourism sector are staying in the troughs, high-tech industrial production can still provide the momentum driving the development of various sectors, thereby maintaining overall economic vitality. Take Dongguan as an example, the shortages of labour in recent years have rendered many enterprises to try using robots as a replacement for manpower. This has then driven the entire industry chain forward, and sustained relevant logistical and ancillary services.

However, how about the Lok Ma Chau Loop and industrial parks under planning at the moment? Will the Government consider applying similar LEGISLATIVE COUNCIL ― 15 February 2017 3843 practices? Will it earmark factory premises and lands for high value-added industrial production, so that Hong Kong can maintain a diversified economy in the future? But the Government has already decided to deal with this matter through HKSTPC without confirming the directions for the above issues. In fact, the people are wondering if the Government has spent its limited resources on areas where they are needed most?

In a nutshell, the Government has spent big on innovation and technology and re-industrialization in the Policy Addresses this year and the last. Nonetheless, despite having developed the Cyberport and continuously expanded the Science Park over the last 10 years or so, the Government is still unable to take our high-tech sector beyond the stage of research and development ("R&D"). In the face of the bottleneck, the sector is still unable to effectively commercialize its R&D results. On the contrary, most of our R&D results are commercialized successfully abroad, or even in the Mainland, where they are further developed into popular products. This is exactly the question we must respond to when we carry out the Development of Lok Ma Chau Loop.

How come we can believe that we will be able to commercialize our R&D results solely by doing more researches, and that Hong Kong people will benefit from the blueprint for re-industrialization? In fact, many people point out that Hong Kong focused on the financial, logistics or service industries in the past because we offered services of much higher standard than those provided in the Mainland, making us capable to earn hefty premiums and much added value. However, Hong Kong society must agree that we cannot aim at turning the entire population into talents in the science and technology field as in the case of the Silicon Valley. There are people from all walks of life in our community with varying level of education. Therefore, society and the Government should take this into account when deploying resources on re-industrialization, so as to commercialize our R&D results through such process and create a diversified momentum to drive the economy forward.

So, I hope the Government can draw up a blueprint for re-industrialization, consult the trade and the community, formulate related business promotion and preferential policies again as soon as practicable, and even prepare for relaxing the regulations concerned, in a bid to eliminate any obstacles for commercializing R&D results into industrial commodities. Otherwise, the so-called re-industrialization will merely become another watchword, while the Development of Lok Ma Chau Loop and the Science Park will eventually become 3844 LEGISLATIVE COUNCIL ― 15 February 2017 a grand slogan, used by others as stepping stones. Not consensus can be reached in society under such circumstances, nor can we create sufficient impetus for a diversified economy in the future.

Thank you, President.

MR DENNIS KWOK (in Cantonese): President, I think we all agree that Hong Kong's economy is facing many uncertainties, including Donald TRUMP of the United States Government, Brexit, and the rising protectionist sentiment in global trade. Indeed, Hong Kong is set to face enormous risks and crises in both economic and financial arenas. Against this background, candidates running for the next Chief Executive Election must have the ability to lead the city to brave these crises, especially in the economic and financial aspects.

In the future, Hong Kong must develop a knowledge-based economy. Today, I would like to focus my discussion on the financial development and the financial technology ("Fintech") development, the two topics which are of greater concerns to the professionals. In the area of Fintech development, I think the Financial Secretary is also aware of some recent developments in the global market. Actually, Hong Kong has been lagging behind other regions, particularly Singapore or Israel where is more far away from us, in the development of Fintech. It is not important that we are lagging behind others in this area, but what matters most is Hong Kong needs to focus on developing and nurturing the fundamental cornerstones we already possess in the Fintech development.

Thanks to its sound policy of tilting toward start-ups, Singapore has become the choice for start-ups or other countries to set up their centres in Asia, making the country the world's second largest Fintech development centre. Let me illustrate this point with an example: the implementation of a Fintech Supervisory Sandbox ("FSS"), a scheme the Secretary should be well aware of. The Government implements this policy in the hope to attract more Fintech companies to start up their businesses in Hong Kong. It aims to provide a safe environment for Fintech companies to test their products without the risk of regulatory non-compliance. However, why FSS is not successful? It is because only large banks can participate in the scheme while other insurance companies, securities dealers, or smaller emerging enterprises are denied access to it.

LEGISLATIVE COUNCIL ― 15 February 2017 3845

Recently, I have taken meal with a lawyer working for a small Fintech company as its legal adviser. He told me that: "Although our Fintech company is small in size, probably with only tens of millions of dollars in investment, we still try to conduct a pilot trial under FSS. However, we are unable to do so because of the high threshold of FSS."

I hope that the Secretary can address this problem because we would like to have more start-ups setting up businesses in Hong Kong. While the Government wants start-ups to set up offices in the Hong Kong Science and Technology Parks and Cyberport, it has set high thresholds for its trial schemes (such as FSS), essentially making start-ups unable to make use of this system. Instead of only offering large banks such favourable policies, why couldn't we also allow start-ups to make use of this nice platform? The Government should also provide assistance to smaller companies. I believe the Secretary has taken note of my opinion on this.

The second point I would like to raise relates to the reform of the Hong Kong financial market. The Securities and Futures Commission ("SFC") issued a consultation last June, which covers, among other things, the need to reform the listing mechanism. I have also discussed this issue with the Under Secretary. I understand that after publication of the consultation document, many members of the industry have submitted their views to SFC. The views are diverse, some are critical while some others supportive. However, in its submission, the Financial Services Development Council ("FSDC") opposes the reform put forward by SFC. It seems that SFC and FSDC are also disagreeing with each other.

We can see that different opinions have emerged during the consultation exercise. It is important for SFC to sufficiently consider the views collected. Whether the Listing Review Committee or the Listing Policy Committee currently proposed by SFC is put forward only after due consideration? Is there a need for SFC to listen to views of the industry to see if the extent of the reform currently proposed is too substantial, or is there any duplication and redundancy? I hope the Under Secretary can give a response to this because, as I know, SFC is preparing new documents which have incorporated these views, and it will come to the Legislative Council to explain its new position in due course. I hope that SFC can use this period of time to fully consider the many views given by various persons.

3846 LEGISLATIVE COUNCIL ― 15 February 2017

This point is relevant to the topic of start-ups I mentioned just now. As we can see, most companies attracted to list in Hong Kong are of considerable size. Of course, some will say it is a must for companies to have considerable size and track record before they can go listing. However, the fact is other financial centres have already formulated new systems to attract some pre-revenue companies to launch IPO there. Pre-revenue companies refer to the relatively new companies which businesses are related to Internet or Fintech. They own excellent technological concepts, though unable to generate profit for the time being. This kind of company is, indeed, most in need of financing. Whether the development of the Hong Kong financial market can make room for and attract this kind of start-up to launch pre-revenue IPO in the city, so that we can provide financing to these companies with high development potentials before they can earn profits? This actually warrants careful consideration.

I hope that in considering how to reform the financial market, SFC and the Hong Kong Exchanges and Clearing Limited should also take Hong Kong's overall development into consideration, so that they can hammer out a system of financial listing with better clarity, certainty and efficiency in dealing with all listing applications. Meanwhile, more opportunities should be created for Fintech companies to carry out financing activities here in Hong Kong. Indeed, it is absolutely necessary for Hong Kong to step up its efforts in exploring this market, as it can attract overseas Fintech companies to carry out financing activities in Hong Kong and thus create more business opportunities.

I hope that the Secretary and the Under Secretary can respond to these two points. Thank you, President.

IR DR LO WAI-KWOK (in Cantonese): President, the Chief Executive, Mr LEUNG Chun-ying, has delivered the fifth Policy Address in his term of office. Although this is the last Policy Address of the current-term Government, the Chief Executive does not adopt a passive approach characteristic of a caretaker government. Rather, he has still put forward many positive ideas on the future development of Hong Kong and a number of supporting measures. This should have our approval.

Actually, the several Legislative Members belonging to the Business and Professionals Alliance for Hong Kong ("BPA"), including me, once put forward our views on the 2017 Policy Address and Budget of the SAR to the Chief LEGISLATIVE COUNCIL ― 15 February 2017 3847

Executive in a submission with 119 proposals entitled "Diversified development and sharing the fruits of achievements". Of these proposals, over 50 have been taken on board and included in the Policy Address, covering such areas as innovation and technology, industrial development, land and housing, social welfare and people's livelihood, culture and education, and so on. This shows that the Government is committed to promoting the sustained economic development of Hong Kong and improving people's livelihood. BPA welcomes this. However, a number of measures have yet to be implemented, and resources should be earmarked correspondingly in the Budget to be announced later if any concrete results are to be achieved.

President, although the local employment market remains relatively stable at present and the unemployment rate is on the low side, Hong Kong as an externally-oriented economy has to face keen competition under economic globalization on the one hand, and take into account a host of uncertain factors on the other. Such factors include the beginning of the interest hike cycle in the United States, the reintroduction of different types of policy of trade protectionism in various countries, the implementation of economic restructuring in the Mainland, and so on, and all these may lead to downward pressure on the Hong Kong economy. In order to be prepared for danger in times of safety, Hong Kong should strive to enhance the competitiveness of different sectors and industries, and try to identify new development opportunities, so that it would be possible for us to break through the predicament in economic development and explore a new way forward for people in different social classes.

President, we will not be able to explore a new way forward without promoting new industries. The rule of law is upheld in Hong Kong, intellectual property rights and the freedom of information are protected here, and there is also the provision of advanced science and technology infrastructure. These have provided us with some very favourable conditions for the development of innovation and technology industry and network economy, and the extended application of innovation and technology will also help to enhance the competitiveness of different sectors and industries. Yet, very regrettably, Hong Kong has obviously been lagging behind other neighbouring places over the years in the development of innovation and technology. I have repeatedly urged the SAR Government to try its best to catch up and expeditiously develop a long-term strategy for innovation and technology development, so as to provide additional technology research resources to promote commercialization of technology results, industrialization of commodities and internationalization of industries.

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Honestly, I must say that the current-term SAR Government has spared no effort in promoting innovation and technology. In particular, since the establishment of the Innovation and Technology Bureau in November 2015 after the approval of the relevant funding application by the Finance Committee of the Legislative Council, a number of measures have been implemented to enhance the atmosphere for innovation and technology development in Hong Kong. The Government has even announced in the Policy Address last year that an investment of $18 billion would generously be made to promote innovation and technology development so that, inter alia, $2 billion would be earmarked for conducting more mid-stream and applied research projects in local universities; $2 billion would be set aside to set up an Innovation and Technology Venture Fund for co-investing with private venture capital funds on a matching basis in local innovation and technology start-ups; and $500 million would be set aside to set up an Innovation and Technology Fund for Better Living to finance projects that make use of innovation and technology to improve our daily life. These funding schemes will undoubtedly help to encourage research and development and business start-up, and promote industrialization of scientific and technological achievements.

Land supply is another factor which restricts the development of innovation and technology industry and other emerging industries. I would like to declare that I am now a member of the Board of Directors of Hong Kong Science and Technology Parks Corporation, but no pecuniary interest is involved. After more than 10 years of efforts, the Science Park at Pak Shek Kok has already achieved some cluster effects to become a flagship of innovation and technology, but its further expansion has regrettably been restricted by the problem of insufficient land. I have strongly opposed the Government's decision to rezone an 8-hectare plot originally reserved for the Phase 4 Development of the Science Park for medium-density residential development in October 2014, and have repeatedly urged the Government to identify other sites for development of facilities similar to the Science Park, so that innovation and technology industry would blossom.

I am happy to see that the Government has now set aside sizable sites, including one of over 50 hectares near the Liantang/Heung Yuen Wai Boundary Control Point, for use by the innovation and technology sector and other emerging or traditional industries. It is even more striking that the SAR Government and the Shenzhen Municipal Government signed a memorandum of understanding at the beginning of January this year on the development of a Hong LEGISLATIVE COUNCIL ― 15 February 2017 3849

Kong/Shenzhen Innovation and Technology Park in the Lok Ma Chau Loop in Hong Kong, with an area quadruple that of the Science Park at Pak Shek Kok. In the meantime, the Government supports the construction by the Hong Kong Science and Technology Parks Corporation of an InnoCell adjacent to the Science Park. InnoCell will provide residential units with flexible design and ancillary facilities, such as shared working spaces, for leasing to staff of the incubatees and start-ups in the Science Park, and it is hoped that the construction will be completed in three years. These initiatives are undoubtedly very encouraging, but the SAR Government will be faced with great challenges in building social consensus, soliciting support from all relevant stakeholders and properly implementing each of these measures.

President, promoting innovation and technology development without any continuous injection of resources in research and development may only result in a loss in the development momentum. The ratio of the total research and development expenditure of Hong Kong to Gross Domestic Product has only increased very slowly from 0.68% in 2003 to 0.76% in 2015, far lagging behind other economies in the region which have placed much emphasis on innovation and technology. I have repeatedly proposed to the SAR Government that Hong Kong should strive to increase the ratio to 2.5% or above in the future 10 years. In order to encourage enterprises to undertake research and development, BPA has proposed to provide enterprises with tax deduction at three times of the research and development expenditure, so that more resources would be put in to develop production lines of high added value. BPA has also proposed the setting up of a research fund of $10 billion by the Government to encourage the development of scientific research industry. I am happy to see that it is mentioned for the first time in the Policy Address this year that the Government would consider implementing such support measures as offering tax and financial concessions to attract innovation and technology enterprises, and I hope actions would be taken as soon as possible to discuss the concrete measures with the commerce, industry and technology sectors in order to avoid making no decision after deliberation.

As for promoting the development of other industries, it is proposed in the Policy Address this year that more international mega events would be organized to attract more high-yield visitors, and measures would be taken to increase the supply of convention and exhibition venues, such as using the Wan Chai Sports Ground for comprehensive development. I think the relevant sectors would be benefited from such initiatives.

3850 LEGISLATIVE COUNCIL ― 15 February 2017

In addition, in order to promote re-industrialization, the Government is preparing to build a Data Technology Hub and an Advanced Manufacturing Centre in the Tseung Kwan O Industrial Estate, and industries enjoying advantages in the process include biotechnology, big data, the Internet of Things, artificial intelligence and smart city. Specific measures should be drawn up to implement the proposal, and the Government should also consider the issue as a whole when attempts are made to promote the development of industries.

I have moved a Members' motion in this Council in March 2015 to urge the Government to expeditiously formulate a long-term, comprehensive and balanced industrial policy, and the motion was passed with amendments and additions proposed by Members from different political parties. I consider it necessary for the SAR Government of the next term to establish clear policy vision and targets for the subject, so as to put into practice the public finance principle of allocating resources where they are required. Through the Government's fiscal measures and resource allocation, the growth of different industries should be strategically stimulated. By means of land supply, tax concessions, special subsidies, personnel training, cooperation among the Government, industry, academia and the research sectors, comprehensive ancillary measures should be provided to strategically stimulate the growth of different industries and attract overseas investments.

Not only should we strengthen the pillar industries (including finance, logistics, tourism and professional services), we should also support the growth of emerging industries (including environmental protection, innovation and technology, testing and certification, cultural and creative industries) as well as revitalize traditional industries (such as food manufacturing and processing industry), so that Hong Kong economy will develop in the direction of diversification and towards the provision of high value-added services.

President, if Hong Kong wishes to explore development opportunities for local industries to go global, we should make full use of the advantages we enjoy under "one country, two systems" and our globalized business experience and network, and complement the blueprint of the Belt and Road Initiative and the National 13th Five-year Plan, so as to strengthen Hong Kong's role as a super-connector and promote regional economic cooperation.

A number of measures have been put forward in this regard in the Policy Address this year, including the beefing up of the establishment and resources of the Belt and Road Office, the enhancement of the network of Hong Kong LEGISLATIVE COUNCIL ― 15 February 2017 3851

Economic and Trade Offices in the Mainland and the Belt and Road countries, the provision of training programmes for these countries on railway operations and aviation, and so on. These measures are necessary but are obviously inadequate. In fact, demand for professional services from regions along the Belt and Road is very strong, and professional services have already become Hong Kong's important industries, enjoying an unique competitive edge in the region.

The Chief Executive launched the $200 million Professional Services Advancement Support Scheme last year to support the local professional sectors in their exchanges, cooperation and related publicity efforts targeting overseas markets. I consider it necessary for the Government to timely review the effectiveness of the Scheme and allocate additional resources for the purpose. An inter-departmental steering committee for the Belt and Road led by the Chief Executive was set up in Hong Kong last year with a few Secretaries of Departments and Directors of Bureaux as committee members, and it is responsible for formulating policies and strategies for Hong Kong's participation in the Belt and Road Initiative. I think the SAR Government should also include in the committee veteran members of the industry and commerce, finance, engineering and infrastructure sectors, so that useful ideas can be drawn on collective wisdom to review how we could make best use of the new opportunities created by the Belt and Road Initiative. Policy measures could thus be formulated and resources be allocated accordingly to give focused attention to the development and promotion of competitive industries and professional services of Hong Kong.

In the meantime, it would also be necessary for the Government to perfect the Mainland/Hong Kong Closer Economic Partnership Arrangement (that is, CEPA), and strive to extend the "early and pilot implementation" approach beyond Guangdong Province to other provinces and municipalities. The Government should also put the various economic and trade agreements signed with the Mainland into practice, so as to deepen cooperation in such areas as infrastructure, industrial investment, technology and culture, information technology and environmental protection.

Besides, professional services provided by Hong Kong also have the potential of assisting Mainland enterprises to go global. I have previously proposed that the SAR Government should encourage and support local engineering companies to cooperate with Mainland enterprises and jointly bid overseas projects, and facilitate the participation of science and technology organizations from Hong Kong in regional science and technology cooperative research and development projects. It is stated in paragraph 46 of the Policy 3852 LEGISLATIVE COUNCIL ― 15 February 2017

Address this year that the SAR Government is discussing with the Mainland authorities how we can participate jointly in local or cross-boundary infrastructure development projects, and I consider this an important step forward. The SAR Government should continue its discussions with governments of various places, and proactively assist the relevant sectors to resolve difficulties in actual operations.

President, on the other hand, not much has been mentioned in the Policy Address this year on support to small and medium enterprises and relief for middle-class families. I and my fellow colleagues from BPA hope that more specific support measures in this regard would be introduced by the SAR Government in the Budget to be announced this month. Besides, I and my fellow colleagues from BPA strongly oppose the proposal to progressively abolish the offsetting arrangement under the Mandatory Provident Fund, since this will exert extra financial pressure and burden on the industrial and commercial sectors. In our opinion, any changes to be made to the offsetting arrangement should be underpinned by a consensus reached among the Government, labour side and employer side, so as to prevent any adverse impacts on business environment and social harmony. The Government should separately handle the two issues of retirement protection and job security.

President, the Chief Executive Election of Hong Kong has already begun and no matter who becomes the new Chief Executive, I share the same concern as many people and hope that the SAR Government would balance the development of and the support given to different classes in our society, and continue to provide resources for economic development and care for people's livelihood. Good policies should not be given up, and should instead be implemented step by step according to the planned targets and time frame, with a view to avoiding policy inconsistency.

With regard to the amendments proposed by several pan-democratic Members, especially the allegation that the various policies and measures proposed by the Chief Executive in the Policy Address would trigger social conflicts and result in social dissension, I and my fellow colleagues from BPA consider that they are not based on objective facts and are just subjective statements used to declare the movers' political stance. We can hardly agree with the amendments, let alone supporting them.

With these remarks, President, I support the original motion moved by Ms Starry LEE in her capacity as the Chairman of the House Committee.

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MS YUNG HOI-YAN (in Cantonese): President, I echo the policy vision of the current-term Government in "Developing the Economy and Improving People's Livelihood". We know only too well that only through economic development can we improve people's livelihood and promote social harmony and inclusion. Regarding people's livelihood, I believe many people see that in recent years, the SAR Government has listed land as its top-priority task and has actively increased land and housing supply. In this Policy Address, the Chief Executive has set out specific proposals on issues that have caused numerous ongoing wrangles in society, such as retirement protection, the arrangement of "offsetting" severance payments and long service payments with Mandatory Provident Fund contributions, etc. But whether Chief Executive LEUNG Chun-ying has basically implemented all commitments in his Election Manifesto, as he claimed so in the Policy Address, is a question to be answered. Regarding the economy, Hong Kong has weathered several political storms in the past few years. These storms have left society increasingly divided, and the political climate and economic environment worsened, and in particular, inactivated the retail and tourism industries. But the Policy Address obviously lacks strength in boosting the economy, and hardly any assistance is offered to the business sector, especially small and medium enterprises ("SMEs"). In this regard, it is disappointing.

I thus hope that the current-term Government can make good use of the remaining time to focus on alleviating the long-existed livelihood issues, especially those related to land and housing, and at the same time take forward a diversified development of industries to broaden our economic framework. I hope that, by so doing, the Government can ultimately share economic returns with the people, thereby improving their quality of life. I also hope that, by so doing, it can reduce oppositions and conflicts in society, so that we can build a harmonious, stable and prosperous society together.

President, according to the First Quarter Economic Report 2016, the earnings ratio of SMEs dropped from 9.8% in 2010 to 2.8% in 2014. SMEs are an important constituent in the Hong Kong economy. There are now about 320 000 SMEs in Hong Kong, employing over 45% of the working population. I thus hold that the Government must strengthen its support to SMEs, help them counter the risks posted by the unstable global economy and help them upgrade and transform their enterprises through better use of innovation and technology. This will also greatly benefit the overall economy and employment in Hong Kong.

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As a matter of fact, in recent years, innovation and technology has already become an important element in comparing the competitiveness of countries and regions in the world. According to the Global Competitiveness Report 2016-2017 published by the World Economic Forum, Hong Kong drops to the ninth place among 138 global economies and still loses out to Singapore. Among the different pillars, Hong Kong is rated the weakest in its innovation pillar, scoring only 4.4 out of 7 and ranking lower than Singapore, South Korea, Taiwan and Malaysia in this regard. The Report points out that our weak capacity to innovate is one of the problems facing the business community in Hong Kong. Innovation is often closely linked to research and development ("R&D"), which often gives birth to creative ideas, products and services. I thus believe that one of the reasons for our poor innovation performance is that our R&D investment lags seriously behind our counterparts, and thus directly affected our competitiveness.

Our Hong Kong Foundation released its research report on the innovation and technology of Hong Kong in the end of 2015. The report compared the R&D spending of six Asian regions. It finds that private and public spending on R&D in Hong Kong both contributed least to the Gross Domestic Product ("GDP"), especially private R&D spending. Contributed only 0.3% to the GDP, private R&D in Hong Kong lagged far behind South Korea (contributed 3.3% to its GDP) and was even behind the corresponding spending in Singapore, which contributed 1.2% to its GDP and was the second last on the list. Hong Kong is lagging far behind. As for other regions, private R&D spending in China contributed 1.6% to its GDP, and 2.3% and 2.8% to the GDP of Taiwan and Japan respectively. Regarding public spending on R&D, Hong Kong and China contributed most minimally in this regard, only 0.4%, while South Korea again topped the list, contributed 1% to its GDP in this regard. On the whole, the R&D investment of Hong Kong only accounted for 0.7% of the GDP, while both Singapore and China accounted for 2%, Taiwan 3%, and Japan and South Korea 3.6% and 4.3% respectively. Hence, the Hong Kong Government should strategically explore how it can properly take forward its R&D investment.

President, I welcome the Government's decision to strengthen its support to innovation and technology. It proposes in the Policy Address this year to construct at a site adjacent to the Science Park an InnoCell with ancillary facilities such as residential units and working spaces for leasing to staff of the incubatees and start-ups in the Science Park. I absolutely welcome the Government to support the development of innovation and technology, so as to LEGISLATIVE COUNCIL ― 15 February 2017 3855 create job opportunities for young people and step up assistance for start-ups. That said, the Government must make comprehensive consideration when formulating the policy concerned. I suggest that the Government should make a comprehensive review of the Science Park, Cyberport, and Hong Kong/Shenzhen Innovation and Technology Park, and that it should also review the positioning and the division of work of the three projects already with concrete planning, with a view to mapping out a better and more well-planned innovation and technology strategy that is more beneficial to the long-term development of Hong Kong.

More specifically, the Government can make an in-depth study on how to gradually incorporate adjacent land and facilities into the existing development foundation laid down by the Science Park, and how to systematically link up and consolidate the soft and hardware (such as related talents and technologies) and resources, and introduce the development concept of a smart city. The aim is to develop the Science Park into another smart city outside East Kowloon, and provide more development space and opportunities for young people. I believe this suggestion is worth the further consideration by the Government.

President, the economy is closely related to people's livelihood. A sound economy will provide Hong Kong with the desirable criteria and foundation for improving social conditions and people's livelihood. I hope that the current-term or the next-term Government will continue to uphold the policy vision of "Developing the Economy and Improving People's Livelihood" and actively launch more measures which are conducive to the long-term development of Hong Kong and supportive to SMEs, the middle class and the professionals, and helpful to young people in job-seeking or business start-up, as well as helpful in improving people's quality of living, so that the economic, political and social fronts of Hong Kong can progress forward healthily and smoothly.

President, I so submit.

MR HOLDEN CHOW (in Cantonese): President, the Chief Executive has delivered his last Policy Address in his term of office, putting forth many constructive initiatives aiming to help the elderly as well as the disadvantaged, community development, etc. Meanwhile, in respect of economic development, the Government adopts an enhanced mindset and is set to materialize the development of a smart city, allocate additional resources to support industrial development in innovative technology, participate in the Belt and Road Initiative 3856 LEGISLATIVE COUNCIL ― 15 February 2017 to expand business opportunities, and open up more land for development. Actually, the year's Policy Address seeks to realize the Chief Executive's governance philosophy of "making positive changes while maintaining stability", which echoes with the requirement set by the Democratic Alliance for the Betterment and Progress of Hong Kong ("DAB"), that is, "doing the right thing for future's sake". And so it is deemed a Policy Address of commitments meant to make a real difference. Let me express once again my recognition and appreciation for it. The Chief Executive election will take place in no time and no matter who is to assume the office of Chief Executive, I do hope that he or she can maintain a committed attitude and carry on with the governance philosophy of making a difference in policy implementation.

President, as we can see, the Government has launched some initiatives to promote the of high-end maritime industry over the past few years, including setting up the Hong Kong Maritime and Port Board as well as the Hong Kong International Aviation Academy. President, DAB has been hoping that the Government can be more proactive in implementing measures to attract ship owners or ship management companies to set up their headquarters in Hong Kong while developing high value-added services, including ship registration, sales and purchases, chartering, ship management, maritime arbitration, etc. to promote Hong Kong as a high value-added maritime services hub. To this end, we have to draw reference from other leading flag states in the world, including the experiences of Panama and the Republic of the Marshall Islands ("Marshall Islands"), with a view to strengthening our competitiveness.

President, let me provide some figures here for Members' reference. In the past two decades, the number and gross tonnage of ships registered in Hong Kong were respectively 484 and 5.4 million tons in 1997 but have increased respectively to 2 525 and over 108 million tons in 2017. This helps illustrate the great potential for and fast speed of the development of Hong Kong's maritime industry. Having talked to members of the industry, I understand, as told by them, that to turn Hong Kong into a more prestigious high value-added maritime services hub so as to attract more ships from all over the world to register in Hong Kong and fly the Hong Kong flags, apart from facilitating lower costs, shorter time and simpler procedures in ship registration, it is necessary for the Marine Department to further increase its manpower so that it will be able to provide support, coordination or certification services in the shortest possible time in case a ship registered in Hong Kong gets into trouble at any time anywhere in the world.

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President, I would give one more example here. Both Panama and Marshall Islands, which I have mentioned just now, are actually among the world's top countries at present in terms of the provision of exceptional high value-added maritime services and many ships registered in these two places. The success of maritime services hinges on timing and quality. I trust that Hong Kong must be able to outperform them as long as there are adequate resources. As I have said just now, with sufficient manpower, the Marine Department will be able to respond to requests for assistance by ships at the fastest speed.

President, Marshall Islands is only a small country but it still managed to rise to the top in this domain. The Marshall Islands is also renowned for its round-the-clock service which provides various non-stop services 24 hours a day. Should any ship registered in the Marshall Islands come across any difficulties at any location in the world will immediately be catered for with the provision of coordination and related services. I reckon that Hong Kong can draw useful lessons in this regard from the Marshall Islands.

Furthermore, we are also of the view that the authorities should put in efforts to strengthen connection and bridging of programmes on maritime studies and maritime law among the Maritime Services Training Institute (which currently provides training for seafarers), the Vocational Training Council and The Hong Kong Polytechnic University or the City University of Hong Kong, with a view to systematically train up more high-calibre talents for the maritime industry.

President, less than 2 500 persons have benefited from the Maritime and Aviation Training Fund so far, and the current-term Government has allocated only $0.1 billion to the Fund which is launched this year. We genuinely hope that it will inject a much larger sum to the Fund for providing training to more people of the younger generation in order to help them attain professional qualifications.

President, I also hope that the Government will step up publicity on the various jobs in the maritime industry that require specific areas of expertise and lay more emphasis on the significance of the maritime industry in contributing to Hong Kong's economic growth, including providing to the public certain information, such as the number of job placements offered every year in the industry, facilitating better understanding of the high value-added maritime industry by the public, thus making it possible for the industry to pursue more efficient development.

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President, we also noticed that the proposal of tax concession offer for the development of aircraft leasing business is finalized this year at long last which signifies an important step towards promoting effectively the development of aircraft leasing business in Hong Kong. In my opinion, the Chief Executive should be given due recognition for all his efforts made in this respect.

As a matter of fact, the business of low-cost carriers had seen speedy growth in earlier years. Moreover, airlines all over the world were in hot pursuit of operating flexibility for the sake of refining their asset allocation frameworks then, thus giving rise to the aircraft leasing business. Currently, both Ireland and Singapore are two successful giants in aircraft leasing business. Singapore is the aircraft leasing centre in Asia for the time being while Ireland is the world's largest market of aircraft leasing. Over 50% of the world's commercial planes are either owned or managed by Irish airlines or finance corporations.

As regards the situation in China, Tianjin's aircraft leasing industry has been thriving for the time being, thanks to the tax concession offered by the local government in tandem with the policy in place to provide necessary support. Actually, Hong Kong has quite a lot of privileges that will attract more aircraft leasing enterprises to operate their business in Hong Kong. There, I believe that the tax concession offer to be rolled out will be conducive to developing Hong Kong into a major aircraft leasing centre in Asia, thereby enhancing further our competence as an international aviation hub.

Meanwhile, since aircraft leasing necessarily entails a diversified array of professional financial products or services (such as financing, operating and chartering as well as sale-and-lease-back services), we consider it a must to provide more training to nurture professional talents. As for the advisory services on disposal of old aircrafts and aircraft fleet management, they can actually become ancillary trades and help create employment opportunities for our community. Therefore, I still want to emphasize that for the sake of enhancing or developing the aircraft leasing industry, we do hope that the Government will inject more resources for training relevant professional talents more effectively to support the development of the industry.

Speaking from my point of view as a lawyer, the provision of legal services related to the handling of aircraft leasing was never popular in the past and rarely was there any dedicated law firms to provide legal services in this respect. I LEGISLATIVE COUNCIL ― 15 February 2017 3859 think the Government should invest more resources in nurturing legal professionals and popularize relevant legal services so as to enhance our competitiveness.

President, I do have something to say about the Competition Ordinance currently in operation. Even though the Ordinance is already in operation, those small and medium enterprises ("SMEs") as well as consumers who seek to complain about acts of dominating or monopolizing the market by large companies can only lodge their complaints with the Competition Commission first for consideration by the Competition Tribunal before instituting legal proceedings. Only after a judgment is handed down will the results be known.

President, I find such procedures overly time-consuming. I think, for the sake enhancing our competitiveness in the market while consolidating the rights and interests of both the SMEs and consumers, the Government should actively study further refining the litigation process under the Competition Ordinance. Simply put, we wish that the Government will provide access to justice by way of private action so that the complainant can bring direct judicial proceedings against the complaint subject. With the option of instituting direct proceedings, it will no longer be a necessary step for every single case to go through the Competition Commission for inquiry and legal actions. I trust that this will serve as an alternative which also helps save time.

What is more, the existing scope of our legal aid scheme does not cover matters concerning anti-competitive practices or anti-monopoly. I opine that the Government should consider whether such scope should be expanded to cover issues on the provision of legal aid to the complainants concerned, provision of free legal advice service or court costs subsidies. Given that the Competition Commission is currently in lack of manpower as well as resources for conducting anti-competitive inquiries, its manpower shortage problem will be aggravated should there emerge any substantial cases in the future. President, to ensure that the Competition Commission genuinely perform its functions, we are of the view that efforts to enhance its resource sufficiency should be made, including setting up a litigation fund under the Competition Commission in a bid to strengthen the Competition Commission's capacity to institute proceedings. In addressing the shortfall of manpower, I want to reiterate, as informed by the world's past experiences in inquiring into anti-competitive practices, that the work conducted under the inquiry into a case for the purpose of instituting prosecution may involve much staff effort. We are, therefore, aware that the Competition 3860 LEGISLATIVE COUNCIL ― 15 February 2017

Commission is at present under very tight manpower constraints indeed, thereby undermining its capacity to conduct inquiries and institute prosecutions. Hence, I hope the Government can put in more efforts in this regard.

President, I will speak again on other issues later. I so submit.

MR LUK CHUNG-HUNG (in Cantonese): In the current term of Government, the Chief Executive LEUNG Chun-ying attaches much importance to the governing principle of appropriate proactivity. A prominent example of this is the establishment of the Innovation and Technology Bureau to provide policy support or ancillaries for the research and development, application and commercialization of innovation and technology. After the inauguration of Innovation and Technology Bureau in 2015, people have been eager to see what policies or ancillaries will be launched, as Hong Kong's development in scientific research definitely lags behind many other areas and our investment in scientific research, in particular, is sorely insufficient. Take our neighbour Shenzhen as an example, the research and development ("R&D") investment it makes contributes more than 4% to its gross domestic product ("GDP"). Therefore, many renowned innovation and technology enterprises and brands, such as Huawei, Tencent and DJI, are headquartered in Shenzhen and they create many opportunities for employment and economic activities there.

However, Hong Kong is totally different. Our conventional four pillar industries aside, we are actually lagging behind in innovation and technology. Our R&D investment only makes up less than 0.5% of our GDP. Hong Kong is highly developed economically but the amount of our investment in innovation and technology is disproportionately low. A number of scholars have suggested that Hong Kong must raise its R&D investment to 4% to 5% of GDP in order to recover lost ground.

Recently, the Government has announced the development of the Hong Kong-Shenzhen Innovation and Technology Park in the Lok Ma Chau Loop and we welcome the plan warmly. The piece of land in the Loop has been left vacant for two decades. Following the straightening of the Shenzhen River, the Hong Kong Government and the Shenzhen Municipal Government eventually entered into a Memorandum of Understanding under which Shenzhen recognizes Hong Kong Government's land ownership over the Loop. Hong Kong and LEGISLATIVE COUNCIL ― 15 February 2017 3861

Shenzhen will join hands to develop the Hong Kong-Shenzhen Innovation and Technology Park, which will be managed under the Hong Kong Science and Technology Parks Corporation and placed under Hong Kong laws, on land earmarked for innovation and scientific research development. I believe that this development project will give a boost to the local innovation and technology industry.

Hong Kong has already had many scientific research collaborations with the Mainland. In terms of production, many Hong Kong institutions have set up trade and academia joint research bases in Shenzhen for scientific research transfer. Both The Hong Kong Polytechnic University and The Hong Kong University of Science and Technology have yielded productive results in scientific research. But how do we turn these results in scientific research into commercial products? As the technology park in the Loop lies adjacent to Shenzhen, the geographical advantage it enjoys will facilitate collaboration between the two sides, and products of our scientific research can thus be made more effective and marketable. The project will help generate abundant job opportunities and provide the young with more spacious room for career development. It will also promote the complementarity of edge between the two areas, with a view to creating a win-win situation.

In as early as 2003, the Hong Kong Federation of Trade Unions put forth a proposal to develop a research, development and coordination centre for Chinese medicine in the Loop. The proposal remains pioneering as at today. The lingering problem of Hong Kong, in our opinion, is the homogeneity of our industries which confines the development scope of the young and diminishes their chance of moving upward. Therefore, the Hong Kong society has to go for innovation and technology. With regard to Chinese medicine, Hong Kong enjoys world reputation in areas such as research, development and testing, whereas the Mainland is capable of producing products with the availability of resources and industrial plants. Therefore, the Loop is a suitable meeting place for talents specializing in Chinese medicine and in scientific research from the two cities. Hence, taking the opportunity that the Hong Kong-Shenzhen Innovation and Technology Park is posed to be set up, we would like to raise once again the blueprint drawn up by the Hong Kong Federation of Trade Unions back then, to let research on Chinese medicine grow in the Loop, so as to promote the development of Chinese medicine in Hong Kong.

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We have met a good number of hurdles in the establishment of Innovation and Technology Bureau, including filibustering by members of the opposition camp, and survived only narrowly. Much of the time has been wasted and we have to reflect on this. Take for example, DJI, an enterprise situated in the neighbouring city Shenzhen, enjoys the world's biggest market share in civilian drones for aerial photography. Its founder Frank WANG is a 2006 graduate of The Hong Kong University of Science and Technology. Why did Mr Frank WANG choose to go to Shenzhen instead of staying in Hong Kong as early as 10 years ago? This question provides good food for thought for our colleagues present here and for Hong Kong as a whole.

With these remarks on the issue, I so submit. I will raise other comments in the sessions to follow.

Thank you, President.

MR MARTIN LIAO (in Cantonese): President, the Legislative Council now debates the last Policy Address by the Chief Executive in his term of office. As with its predecessors, this Address remains vigilant in formulating strategies for the Hong Kong community proactively and this time it proposes more than 180 new policy measures. Among them, some pave way for the sustainable development of Hong Kong, others are new development directions raised in response to controversial issues and meant to be discussed by the community. All in all, this Policy Address is an embodiment of the strenuous efforts made by the current term Government on various aspects of governance in the last four years. For instance, with regard to elderly care and poverty alleviation, it proposes adding a higher tier of assistance for elderlies with more financial needs, following the formulation of the official poverty line and the launch of the Low-income Working Family Allowance Scheme. On health care, the 10-year Hospital Development Plan, which was earmarked with a provision of HK$200 billion last year, has already had several of its projects started. In the identification of land for housing production, land sale for private housing development has doubled within the five-year period in the current term of Government, while the supply of land for public rental housing development has yet to meet the demand regrettably.

On the economy, the Policy Address this year keeps up the effort in putting forth a number of measures to help Hong Kong's industries, both old and new, LEGISLATIVE COUNCIL ― 15 February 2017 3863 take innovation to the next level. It also helps further consolidating regional economic integration and assists various sectors in Hong Kong to seize the strategic opportunities presented by the National 13th Five-Year Plan and the Belt and Road Initiative. The Special Administrative Region Government is now in discussion with the Country's ministries and commissions, on joint participation in the works projects under the Belt and Road Initiative which are valued at hundreds of billions US dollars. The Government will also take forward the plan to establish new economic and trade offices in five countries along the Belt and Road, on top of increasing the number of liaison units in the Mainland to strengthen our connection. All these measures agree with the suggestions I made in the Council over the years. Admittedly, all these government endeavours deserve recognition by the community.

President, the economy lays the foundation for livelihood. Only under a persistently prosperous economy can we have the financial means to keep improving people's livelihood; and only under a diversified economy can the young apply their respective strengths and realize their potential. Against the backdrop of a complicated and volatile global political and economic scene this year, we must keep vigil in times of safety, take practical steps in nurturing the vigorous growth of new industries, on top of recognizing and endeavouring to overcome our own weaknesses. As time is limited, I would like to focus on two topics about which I have always been concerned and are most relevant to "innovation", that is, innovation and technology and financial innovation.

The Policy Address this year talks a lot about innovation and technology, though the emphasis is still more on "hard power" than on "soft power". President, the Government has announced the $18 billion allocation for promoting innovation and technology, via measures such as the establishment of the Midstream Research Programme for Universities and the Innovation and Technology Fund for Better Living. It will also step up investment in the hardware of the innovation and technology industry. On land supply, apart from finalizing the Hong Kong/Shenzhen Innovation and Technology Park in the Lok Ma Chau Loop Area, an InnoCell will be constructed adjacent to the Science Park to lease work space and residential units to innovation workers in the Science Park. A sizable site near Liantang/Heung Yuen Wai Boundary Control Point has further been set aside for development. On investment in information infrastructure, the Government proposes establishing a Common Spatial Data Infrastructure, and increasing the number of Wi-Fi hotspots to more than 30 000. These proposals and measures are all to be welcomed.

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Measures for upgrading "software" are not altogether absent from the Policy Address. Paragraph 57 of the Address suggests the University Grants Committee review the allocation of research grants, expand the assessment criteria to include research impact and effectiveness of knowledge and technology transfer. These measures are arguably most down-to-earth as they strategically target university subculture, help shift academic focuses away from upstream foundational research and development and thesis writing, and encourage universities to allocate more resources in applied research and development instead. University professors are motivated to take part actively in the Midstream Research Programme for Universities. Collaboration among the industry, academia and research sectors are promoted to help enhance the climate for innovation and technology. All these measures are well worth our support.

Unfortunately, the Policy Address on the whole has fallen short of providing adequate support for developing "soft power" of the innovation and technology industry. First of all, as I have pointed out repeatedly, our legislation, which fails to keep up with the ever-evolving business model of the innovation and technology industry, is now restraining its growth. This problem has yet to receive due heed from the Government. For instance, several international innovation and technology enterprises that enjoy sizable clienteles, including Uber the network on-demand transportation service provider and an online apartment rental service provider, have recently hit development hurdles while conducting business activities under the sharing economy in Hong Kong, due to a problem in local legislation. Furthermore, the protection offered by intellectual property rights are highly important to innovation and technology products, an indispensible "soft power" of the industry. But the amendment of copyright legislation last year was halted abruptly due to a filibuster in the Legislative Council. Subsequent to that, the authorities have not provided a date for putting forward the amendment proposals again, thus giving people an unfortunate signal that the relevant legislation is not going to be revised any time soon. Admittedly, our exemplary legal system and global-looking professional services are the software edge that we now enjoy. But if we would like to jump on the international bandwagon to develop the innovation and technology industry, we must first settle the conflict between the new industry and the old business model, eliminating these weaknesses in our "soft power".

It is also disappointing that the Policy Address offers no targeted measures to boost resources allocation or policy support for innovation and technology in Hong Kong. It is true that after the establishment of the Innovation and LEGISLATIVE COUNCIL ― 15 February 2017 3865

Technology Bureau, the climate for innovation and technology has improved and authoritative organizations, such as Sweden's Karolinska Institutet and the MIT Innovation Initiative, have set up local branches in Hong Kong. All these, however, have not freed us from the impasse of inadequate allocation for innovation and technology. Together with private investments, the scientific research funding in Hong Kong now contribute only 0.7% to the Gross Domestic Product ("GDP") and the Government's allocation makes up a mere 0.4%. In comparison, ours trails far behind the 4.4% in Israel, the 4.1% in South Korea, the 2% in our neighbours Singapore and Taiwan, and is way lower than the 3% resources allocation made by other developed countries and areas.

I hope the Government can learn from its admirable counterparts, raise determination to formulate an overall policy blueprint for the development in scientific research, and increase its allocation to society. Measures to be adopted may include encouraging enterprises to increase resource allocation in scientific research, and providing tax concessions for science and technology development industries, giving them tax deduction in spending on research and development, talent development and acquisition of advanced technological equipment. The Government may also consider granting tax breaks and reduced profits tax rates for scientific research start-ups, to let them focus on developing products that Hong Kong enjoys advantages and potential, such as robots, medical technology, and smart city, with a view to helping the commodification and evolution of scientific research results into Hong Kong brands.

Furthermore, Hong Kong has for years failed to groom research and development talents in science and engineering, thus stifling the development of innovation and technology industry. In view of this, the Government must examine its weaknesses, strive to improve education policy and promote an atmosphere conducive to innovative and scientific research.

At present, the eight higher education institutions in Hong Kong are only able to give training to just a few hundreds of graduate students in engineering and technology a year, or about a thousand-plus graduate students if those in science are included. And it is all possible for these students not to join scientific research-related professions after graduation. Statistics in 2014 showed that, scientific research personnel in Hong Kong numbered 28 000 and their proportion in local population was lower than that in the Organisation for Economic Co-operation and Development countries. In Hong Kong, the admission scores of STEM (science, technology, engineering and mathematics) 3866 LEGISLATIVE COUNCIL ― 15 February 2017 disciplines are generally lower than that of the business school. STEM graduates also face smaller salaries and fewer job choices. Hence, few people in Hong Kong choose to engage in scientific research. Findings of a study indicated that among the 1 250 STEM research graduates in 2015, only 157 went to STEM-related professions other than academic research. And the median incomes of those who join professional, science and technology industries are about 20% lower than those in finance, insurance, education and administration.

If the Government wants to encourage more young people to join the innovation and technology industry, it must nurture an intense interest in them early on. It should consider, for instance, making STEM-related coding education a compulsory part of the curriculum and enhance it comprehensively throughout our primary and secondary school curricula. Moreover, I suggest the Government learn from the experience of the United States where the National Aeronautics and Space Administration works with schools regularly and lets young students get in touch with a variety of knowledge in astronomy, learn the structure and scientific principles of a rocket from a tender age, so that students will not find rocket building and space travelling remote, and more importantly, have their dreams and interest in science deepened. As for secondary school students, the Government can work with leading technological enterprises and ask them to provide resources in STEM education, to help impart relevant knowledge in scientific research-related professions, with a view to inspiring students' enthusiasm in joining the innovation and technology industry.

On financial innovation, the Policy Address this year proposes establishing Hong Kong as a hub for the setting of standards for cutting-edge technology, actively studying projects on cyber security and "Blockchain", and building a pool of talent. While these should all be welcome, the Address has regrettably stopped short of discussing the provision of concrete support measures.

The galloping advancement of financial technology ("Fintech") unleashes huge development potential. A report predicted that the global investment in Fintech will exceed US$46 billion by 2020. Though Hong Kong is an international financial hub, it regrettably remains a laggard to its counterparts, yet again due to insufficient "soft power".

According to a Fintech research report by the accounting firm Ernst &Young, Hong Kong ranks last in a list of seven major financial markets after New York, London, Singapore and a few others. The governments of New LEGISLATIVE COUNCIL ― 15 February 2017 3867

York and London understand the need to keep up with the times, have amended legislation to help regulators stay close to the development of innovative business models, and hence have successfully developed the cities into leading Fintech hubs. A study by the Bank of China indicated that Hong Kong would enjoy good potential to become a Fintech hub, provided that our legislation was revamped. It has been almost two years since the inauguration of the Steering Group on Financial Technologies and regrettably we have not seen it make too many proposals to promote development. Till now, our regulatory legislation stays ambiguous, and new legislation remains on the drawing board. As a result, some technologies which are maturely-developed in oversea countries, such as mobile payment, P2P lending and equity crowdfunding, have their development in Hong Kong trailed behind other cities. Fintech in the territory is hence advancing at snail pace.

Take P2P lending as an example. It has been long since the first P2P lending start-up emerged in the United States. People there need not borrow money from a bank, they can just go online and let lenders analyse their borrowing records and decide the size of loan. Adopting this innovative commercial model, however, constitutes an offence of illegal funding in the present day Hong Kong. To partake a share in Fintech, the Hong Kong Government must face up to and resolve the problem originating from the failure of our legislation to support development. It should also strike a balance between the need to safeguard market stability and consumer interests, and that of innovation as soon as practicable, so as to put the latest commercial model in question under appropriate regulation. Regarding equity crowdfunding, for instance, the Government may consider enlarging the relevant supervisory sandbox to cover non-banking trades and start-ups, via the introduction of appropriate regulatory measures and regulatory licencing platform.

Technology is not the only factor contributing to development in financial innovation, new mindset is another vital one. The development of green finance, for instance, presents a great opportunity for Hong Kong to aggrandize its bond and project finance markets. According to the People's Bank of China, China is projected to invest more than US$1.05 trillion on green projects during the National 13th Five-Year Plan. With only 15% of the sum coming from the Chinese Government, development opportunities are created in abundance. The development of bond market in Hong Kong has been sluggish for years, with a concentration in Exchange Fund Bills or bonds issued in the name of individual 3868 LEGISLATIVE COUNCIL ― 15 February 2017 statutory bodies to raise funds. Its development is definitely incompatible with our status as an international financial hub. However, as the world places increasing emphasis on green economy, many countries have signed the Paris Agreement which targets climate change. China, the United Kingdom and many other countries have got in on the act, commit themselves to developing green finance, and the assets they invest in green products and projects accelerate rapidly. Indeed, the Hong Kong Government also talked about developing green financial products last year and vowed to step up publicizing to the world Hong Kong's strength in capital markets. It is a shame that these proposals are not followed up in the Policy Address. The Hong Kong Government should make hay while the sun shines, consider establishing a Green Finance Advisory Council or other similar bodies, for the formulation of ongoing focus and provision of assistance. The Government and public organizations can take the lead in issuing green bonds so as to send a clear signal to the financial industry locally and globally, and promote long-term development in areas such as asset management, derivatives, insurance, and private equity fund.

Of course, even if the Government is prescient enough to formulate timely and appropriate policy measures for the economy, its hands will be tied once it meets filibuster in the Legislative Council. While fellow colleagues works hard in pressing the Innovation and Technology Bureau for promoting the innovation and technology industry, I particularly hope that they can learn from the painful lesson that the Bureau took almost three years to set up because of a filibuster in this Council, and refrain from forgoing our opportunity in economic transformation easily and randomly, just for political reasons. I also trust that policies beneficial to Hong Kong will be adopted and continued to be implemented by whoever elected as the Chief Executive.

Lastly, I would also like to talk about the business environment as well as small and medium enterprises. Proposals made by the Policy Address this year on abolishing the "offsetting" mechanism in the Mandatory Provident Fund scheme and on the standard working hours have drawn special attention from the business sector. These proposals, on top of exerting a direct impact on the room for survival of the small and medium enterprises, bear a far-reaching impact upon Hong Kong's economic development and international competitiveness. Despite the proposal in the Policy Address to abolish the "offsetting" mechanism, employers and employees hold different opinions over the issue. The Government will keep on consulting the stakeholders in the following months LEGISLATIVE COUNCIL ― 15 February 2017 3869 over this important topic. Likewise for the policy on standard working hours, though the Standard Working Hours Committee has submitted its report and proposals late last month regarding the policy, the relevant policy direction will only be finalized after the Government releases an analytical report in the months to follow. Meanwhile, the labour representatives also hold dissenting opinions. I hope that the Government and various sectors in the community can continue discussing rationally for an improved solution that is acceptable to all and beneficial to society. I will also actively convey the opinions of my constituency to the Government.

President, I so submit.

MR ANDREW WAN (in Cantonese): President, perhaps the only reason for Hong Kong people to feel thankful is that this is Chief Executive LEUNG Chun-ying's last Policy Address. Upon reviewing the contents of the Policy Address and LEUNG Chun-ying's governance in the last five years, it can be said that the Policy Address is indeed a report of his numerous counts of broken promises and denials of his poor administration. As legislators, we must consider the big picture instead of merely pointing out the less significant areas where he has done right, but not referring to the more series faults committed by him.

To be fair, of course it is impossible that the Government has "zero" accomplishment over these five years. The Government is duty-bound to produce a certain level of attainment. However, the Chief Executive should know that one's achievements cannot outweigh his faults. As the Policy Address has gone back on too many promises made in relation to such areas as constitution, housing, lands, labour, education and the subject of this session, economic development, commerce and industry and technology. I believe that it is rather difficult to feel happy or thankful in respect of this performance.

Mr WU Chi-wai from the Democratic Party and other Members have directed strong criticisms about commerce and industry, economic development and technology just now, so I intend to focus on a less-discussed topic in this session, that is, the policies, measures and inadequate legislation regarding consumer protection under the subject of economic development, commerce and industry.

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President, after the Trade Descriptions Ordinance came into effect, on the surface the Government has made certain improvements in the laws and regulations concerning the protection of consumers' rights and interests in recent years. However, our existing legislation is still inadequate in dealing with the rapid advance in technology and the diversified economic and consumption patterns. Obviously the pace of legislative improvement cannot catch up with the development, and the laws are full of loopholes. Unfortunately, the Government's responses are far from adequate.

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

Let us look at the example of online shopping which has been popular in recent years. The Consumer Council received 3 300 to 5 600 complaints about online transactions over each of the past three years, representing nearly 18% of overall complaints at most, that is, around one fifth of the total number. Such a percentage is alarming indeed, as it accounts for almost 20% of all the complaints. Most of these cases involved air tickets and electronic products.

Many large scale online shopping platforms and gym and fitness centres closed down last year. Even a foreign airline ceased operation. With respect to the above, the Democratic Party and my office received almost 1 000 cases of request for assistance. The victims did call the Police, and they contacted the Consumer Council and the Commerce and Economic Development Bureau. Regrettably, due to the excessive coverage of this policy area and various technical issues, the victims are mostly unable to get the rights they deserve, not even the money they paid. In the end, they can only opt for a seemingly right direction to lodge claims as creditors in bankruptcy cases. However, everyone understands that creditors involving such tiny amounts can almost claim nothing back. A fraction of consumers are relatively lucky as they have paid by credit cards, and if they have followed our advice, including joining us personally to express their opinions to the Hong Kong Monetary Authority in a bid to exert pressure on banks and card issuers and make them honour their words and fulfil their responsibilities under the chargeback mechanism in the credit card system, those consumers would receive refunds of payments made by credit cards.

Unfortunately, such a mechanism involves an immense number of barriers, as in the case of insurance claims. Consumers can only be refunded after going LEGISLATIVE COUNCIL ― 15 February 2017 3871 through all the complicated procedures and meeting all the criteria. After card companies have reluctantly refunded, consumers are still required to accept an additional condition under which card companies do not eliminate the possibly that they will claim the money back from consumers in the future. These arrangements demonstrate the lack of consumer protection provided by the Government through its polices and measures under the market at present. The Government must keep abreast of this mode of consumption and the latest economic pattern.

Apart from the example above, some unscrupulous merchants have adopted certain practices to circumvent government regulation. For example, the scams widely seen in the beauty industry in recent years have developed into versions 2.0 and 3.0. Con artists will trick the victims with words of romance in a love fraud and lure them to spend astronomical amounts of money on beauty treatments. Sometimes the cost can reach hundreds of thousands of dollars. They can always devise new means to deceive the victims. The above is an example of the ways applied by them to avoid regulation.

Deputy President, the above example probably illustrates only a part of the loopholes and inadequacies in policies protecting the consumers. In fact, there is no shortage of solutions, only that Government has long ignored our advice or the voices in the community. Take the beauty industry as an example, we of course cannot regulate morality as a response to the con artists mentioned by me just now. Moreover, unless there is evidence for a scam, all of us know that it is really difficult to prove the fraud if the consumers were deceived at that moment. That said, it does not mean that we can do nothing to protect consumers. We can simply introduce cooling-off period for consumer agreements. Even if the deceivers invent a perfect story, when the consumers calm down back home, then regardless of whether they were besieged in the fitness centre, or whether they were trapped and forced to sign an agreement right after they had taken off their clothes for a spa treatment at the beauty centre … these always happen in fact. Why can we not handle this by introducing a cooling-off period? In this case, merchants can no longer force consumers to sign anything. Why is the Government unwilling to do so?

Next, we take online shopping as an example. A few major online shopping companies went out of business last year. I provided assistance to one of them. At that time, I suggested the Government to establish a consumers protection fund as in the case of the Travel Industry Compensation Fund. It can 3872 LEGISLATIVE COUNCIL ― 15 February 2017 even set up a fund specifically for online shopping. Of course, we know that this is technically difficult, but did we not face any technical difficulties in many improvement measures launched in the past? Were we not able to resolve them all and launch the needed measures? This demonstrates how determined and bold is the Government to solve the problems. I hope that Government can realize that this does not only affect consumers, but the trade and their goodwill as well.

Deputy President, allow me to draw the example of the gym and fitness trade. In fact, if we told others that we joined a fitness centre in the last few years, others would instantly wonder if we were coerced to do so. Some members of the trade may not like such a perception too, as those black sheep have jeopardized the reputation of the entire trade, affecting the good operators as well. I believe any proper merchant will not like this. Therefore, these rules and regulations can serve to protect both the consumers and the trade.

To be fair, apart from the Democratic Party, other political parties did propose introducing cooling-off period for consumer agreements. Members of the community had proposed this for years, too. The Democratic Party also recommends the establishment of a consumer dispute resolution centre. I believe it is a good way to reach reconciliation between the two sides before they have to take the cases to court easily. It is because some disputes can be resolved through mediation under certain circumstances. This is also an option to complement a few limitations and shortcomings of the Consumer Council.

If we look back on the past, we would have a feeling that the Government was trying to protect the business sector all along, despite all these specific proposals. By merely introducing lax controls, it actually does not attach much importance to consumer protection. As I have said earlier, a cooling-off period will not affect those sincere merchants, and this will only expand their market share as a result of an enhanced business environment. Such a measure will not create any impact for them.

Therefore, I really hope the Government can keep abreast of the times and adopt a new attitude to enhance protection for the people. In particular, we advocate the introduction of a cooling-off period in certain industries, such as beauty, fitness and telecommunication industries, or any industry which involve substantial amount of money and long-term service agreements. Furthermore, with regard to the measures mentioned by me, I hope the Government can kindly LEGISLATIVE COUNCIL ― 15 February 2017 3873 heed our words without regard to the political spectrum of the parties concerned. It should not ignore the advice simply because it is offered by the pro-democracy camp. On the contrary, the Government should listen to any constructive voice in order to create a harmonious and healthy social environment and make room for effective social policy in Hong Kong. It is the Government's duty to enhance regulation on consumer activities and plug any loopholes. I hope both consumers and merchants can benefit from this in the future.

Deputy President, I so submit.

MR JIMMY NG (in Cantonese): Deputy President, Chief Executive LEUNG Chun-ying published the final Policy Address in his term of office last month. The Public Opinion Programme of the University of Hong Kong collaborated with the Hong Kong Council of Social Service to survey public satisfaction with the Policy Address. The result indicated an overall score of 52.3 out of 100, a rise of 11 from last year, a return to pass level. The poll conducted by the Hong Kong Institute of Asia-Pacific Studies of The Chinese University of Hong Kong also showed an increase of 7.4 points in overall score of the latest Policy Address as compared to last year. Perhaps we should put it this way: this Policy Address is mainly about measures relating to economic development, improvement of the people's livelihood, and problems confronting different social strata. Quoting the words of State President XI Jinping, it is about integrated policy implementation. The Policy Address deserves our support in general, and I trust it can help us recover from the doldrums in politics over the last few years and promote social harmony and stability.

It is worth mentioning the proposals brought out by the Policy Address to resolve the shortage in convention and exhibition venues in Hong Kong, as well as to establish more Economic and Trade Offices overseas and liaison units in the Mainland. The commerce and industry sector welcomes these moves, as these are the steps to enhance Hong Kong's competitiveness and promote long-term economic and social development. However, there is room for improvement in terms of measures concerning offsetting arrangement under the Mandatory Provident Fund ("MPF") Scheme, corresponding manpower resources for re-industrialization, tax support for enterprises expanding outside Hong Kong and improvement in business environment under expensive land premiums and high property prices, and so on. Next, I will comment in four areas.

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First, the commerce and industry sector rejects the abolition of MPF offsetting arrangement. All of us know that the abolition of MPF offsetting mechanism has aroused heated debate in society. The Government's proposal to gradually abolish the offsetting arrangement is merely an attempt to buy time. As I have said before, while the Government is leaving the water for the shore, the business sector is moving the other way around. It simply postpones the implementation of the abolition without really lifting the heavy financial burden to be shouldered by the commerce and industry sector in the future. At present, over 90% of companies in Hong Kong are micro, small and medium enterprises, and many of them are unlimited companies, such as law firms and accounting firms. Abolishing the MPF offsetting mechanism will certainly increase the commercial sector's operation costs. In the worst case, company owners may go bankrupt if they cannot afford employees' severance payments or long service payments. Therefore, the Government should serious contemplate and review all other possible alternatives to improve the situation. I recommend the Government that, on top of the comprehensive review on the MPF Scheme, it should review other social protection schemes too, so as to ensure the fair use of resources in society.

Second, from last year's to this year's Policy Addresses, the SAR Government has expressly pointed out the potential of re-industrialization as the next bright spot of Hong Kong's economy. I especially notice that this year's Policy Address mentions re-industrialization for seven times, indicating that re-industrialization has become one of the Government's major policies. However, nothing concrete has taken place when it comes to resolving the problem of corresponding manpower resources for re-industrialization. It is because the Government has offered no specific detail of expanding the pool of talent for innovation and technology apart from the consultancy study on the feasibility of drawing up a talent list commenced by the Labour and Welfare Bureau. It is widely known that high calibre talents are the essence of re-industrialization. Therefore, Deputy President, I believe we can consider further enhancing the Quality Migrant Admission Scheme to attract talents in the innovation and technology sector to Hong Kong, so as to tackle the problem concerning manpower resources for re-industrialization. The Government should start examining ways of supporting the enhancement of traditional industries, as well as to adopt new ideas.

Third, the commerce and industry sector welcomes the measures to strengthen tax support for enterprises proposed in the Policy Address. One of LEGISLATIVE COUNCIL ― 15 February 2017 3875 the measures is the Government's plan to introduce a bill into the Legislative Council this year to amend the Inland Revenue Ordinance to offer tax concession so as to attract companies to develop aircraft leasing business in Hong Kong. However, I incline to the idea that the Government's tax support should further tie in with the State's "One Belt One Road" initiative, with a view to encouraging Hong Kong enterprises to expand their business abroad. Also, it should formulate policies with longer lasting effects, such as reviewing relevant sections in the Inland Revenue Ordinance and other tax measures. With regard to certain Hong Kong enterprises operating in the Mainland or the Belt and Road countries, the Government can also consider offering tax allowances for the machinery and plants used, as well as inputs devoted to intellectual property and research and development. Moreover, it can also consider offering cash subsidies or providing extra tax concessions for two or more times on research and development expenses.

Furthermore, many owners of small and medium enterprises ("SMEs") have relayed to me that it is difficult to obtain bank loans. In fact, they are even unable to open bank accounts. Such circumstances not only impede Hong Kong's economic development, but also hinder Hong Kong's future participation in the "One Belt One Road" development introduced by the State. "One Belt One Road" offers SMEs with unprecedented opportunities to promote the brand name of Hong Kong's manufacturing sector abroad, but we have to first deal with the pressing problems in business operation, such as difficulties in securing bank loans and opening bank accounts. I suggest the Government to set up a special funding and loan guarantee scheme under the "One Belt One Road" framework, offering favourable approval criteria for Hong Kong enterprises investing and starting business in countries along "One Belt One Road", and to provide proper interest subsidies, thereby dovetailing with the State's "One Belt One Road" strategy at full stretch.

Fourth, the commerce and industry sector wishes to see an improvement in business environment under expensive land premiums and high property prices. However, regarding commercial and economic land uses, the Policy Address only lists some figures about land sale, and land supply in Kowloon East, without thoroughly considering issues which have concerned the commerce and industry sector for long, including redefining "industrial use". We have to note that the long-standing problem of high property prices have led to escalating operation costs. In my opinion, the Government must take the initiative to establish a highly competitive market for land and property, and prevent excessive price 3876 LEGISLATIVE COUNCIL ― 15 February 2017 hikes through competition, so as to reduce business costs in the overall economy, thereby enabling SMEs and companies in the creative sector to sustain their business. The resulting economic diversification will then expand the depth of business support measures and creativity in Hong Kong's commercial sector, and further bring Hong Kong forward to become an innovative economy.

In a nutshell, the current Government has the heart and strength to resolve a series of deep-rooted problems concerning politics, economy and the community. That said, the mission is still not accomplished yet. I hope the next SAR Government can continue the measures conducive to the economy and the people's livelihood, and that it will always set its mind to improving the welfare of the people. I believe such steps will benefit Hong Kong with time.

At last, I have noticed that Mr HO Kai-ming, the representative of the labour constituency, has spent much length in his speech to urge the Government to promote re-industrialization in order to boost employment and promote economic development. This shows that the commerce and industry sector and the labour sector in Hong Kong do share the same view on many issues. It is because everyone knows that Hong Kong is, after all, a capitalists economy. The people can truly benefit from social advancement and lead a good life only if there are a relaxed political atmosphere, robust economic development and a solution for improving the people's livelihood.

Deputy President, I so submit.

MR CHUNG KWOK-PAN (in Cantonese): Deputy President, the theme of the last Policy Address delivered by Chief Executive LEUNG Chun-ying this year is "Make Best Use of Opportunities Develop the Economy Improve People's Livelihood Build an Inclusive Society". If we look at the policy address of last year, we can see that the theme is "Innovate for the Economy Improve Livelihood Foster Harmony Share Prosperity". Deputy President, do you notice a resemblance between the themes of the two policy addresses? They are almost identical. So, I think I may as well use my script last year as the basis of my present speech. Why? I put forth many views last year. Despite the passage of one year, the Government has still failed to implement any of my proposals. Are those unaccomplished tasks so very complicated? Do such tasks require five or even seven years to be accomplished? Absolutely not.

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Let me give two examples as illustrations of my proposals last year. These two proposals were also mentioned in LEUNG Chun-ying's election manifesto in 2012. He said that as Hong Kong products had considerable room for development in the Mainland market, he would assist Hong Kong products in establishing permanent exhibition venues in the Mainland. He has failed to do so. Finding exhibition venues is no difficult task. It can be accomplished by entrusting the Trade Development Council to rent a venue in every province and municipality. This can be accomplished within half a year. He has failed to accomplish even such a simple task. He also said that he would develop wholesale markets in Cheung Sha Wan and Sham Shui Po. In Cheung Sha Wan, many people are already engaged in the computer business and the garment business. If he wants to develop wholesale markets, he can simply allocate resources to the relevant District Council or communities. Or, he can cooperate with local shop owners for this purpose. Likewise, this can be accomplished within half a year. But after a passage of one year, he has failed to do so. And the theme of the Policy Address remains exactly the same as that of the policy address last year.

Four years have passed, and the Chief Executive's tenure is drawing to a close. His Policy Address this time around is very extensive, and he spent two and a half hours on reading out the 20 000 words or so therein. It can be said that the Policy Address has given a summary and an account of his work. But most regrettably, I honestly fail to see any accomplishment and fruit in economic development over the past four years.

We certainly cannot say that there is nothing we can do. For example, speaking of the creative industry as mentioned in paragraph 30, he has put forth a new point, the point that we must unleash the intellectual property right potentials of the film and design as well as animation and comics industries to attain cross-sector synergy. This is absolutely agreeable to me. Back in the 1980s and the 1990s, Hong Kong's film industry was very popular in the entire Southeast Asia. And, the garment manufacturing industry I now represent was a major industry in Hong Kong in the 1980s and the 1990s. In the 1980s and the 1990s, these industries of Hong Kong already enjoyed a leading position in Asia. Why should we refuse to redevelop these industries or enable their crossover with other industries?

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I have always talked about South Korea. South Korea is an apt example. In the 1980s and the 1990s, Hong Kong's film and garment manufacturing industries reigned supremacy, and these industries in South Korea were no match for ours and virtually unknown to people. But during the 10 years since the Asian financial turmoil in 1997 or 1998, they devoted tremendous efforts to develop these industries. As we can see, with government support and the efforts of the industries, the development of South Korea's film and fashion industries is now very prosperous, and the Korean wave has swept across Southeast Asia. This is what is called "soft power". Our traditional industries already developed quite well in the 1980s and the 1990s. Why is it impossible to redevelop these industries and play to their strengths? We definitely have the ability and foundation. So, I certainly agree that we must give play to the synergy in the creative industry. The crossover of the fashion industry with the film industry, or the crossover of the film industry with the fashion industry, the animation and comics industry, the toy industry or other traditional industries in Hong Kong, can definitely bear some fruit.

Besides, the Policy Address talks about the Inland Revenue Ordinance ("the Ordinance"). Secretary Prof K C CHAN is not present. The Policy Address mentions the possibility to introduce amendments for the purpose of offering tax concessions to the transportation and logistics industries. At the Council meeting of 13 November 2012, I asked a question about why sections 16 and 39E of the Ordinance could not be amended. Section 16 is about intellectual property right, and it must be amended if the SAR Government wants to develop Hong Kong into an intellectual property right centre. What is section 39E all about? We in the industrial sector have set up plants and invested in machinery in places outside Hong Kong. The purchase of such machinery and also our investment have indeed taken place through Hong Kong, only that the machinery is used for production in the Mainland or Southeast Asia. In that case, why should we be denied of any tax rebate or reduction under section 39E? All this is certainly conducive to industrial development and raising the investment desire of entrepreneurs. I hope that those who agree to the introduction of tax concessions under the Ordinance can also support the amendment of sections 16 and 39E. We already put forth these proposals five years ago. That means we already saw the necessity for amendment back then. We already raised these issues five years ago. Fortunately, five years later, the Government agrees to give consideration. But Secretary Prof K C CHAN has just left. He has missed all this. I hope he will pay attention to this.

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Furthermore, speaking of the trade and investment environment, I already said last year that free trade was very important and necessary to Hong Kong. But sadly, as I said last time, Hong Kong missed the opportunity of joining the Trans-Pacific Partnership ("TPP"). But this does not matter now, as the new United States Government has thrown it into the rubbish bin. Even so, does this mean that we should not strive for free trade all the same? For example, can we discuss the possibility of free trade with the United States and Britain separately? Particularly, as Britain is now preparing for Brexit and will delink from the European Union in many aspects, it can be the right moment for discussion. The United States' abandoning of TPP has severed its ties with 10 countries or so. So, we may hold separate discussion with it.

All this will be beneficial to Hong Kong's trade and investment environment in the future. This is especially so when the new TRUMP administration has said that it may take issue with China's international trade policy and its manipulation of the Renminbi exchange rate. Any actual actions to be taken by him for this purpose may produce some impact on this unique economy of Hong Kong or even do good to both sides as Hong Kong is a separate customs territory and an independent member of the World Trade Organization. We can act as a mediator between both sides if they put up a fight, and Hong Kong may be able to have some gains. So, shouldn't we grasp the present opportunity to initiate discussion with these advanced economies on our future free trade prospects?

Another issue is of course the Belt and Road Initiative. I believe many people are unaware of what the Belt and Road Office is now doing. But certainly, several paragraphs in the Policy Address state that a high-profile summit will be held. What actual good will this bring to Hong Kong? In other words, what roles can Hong Kong play? At present, many people are talking about financial services or infrastructure development. But we should consider one realistic question. Most companies in Hong Kong are small and medium enterprises ("SMEs"). What can we do in the area of infrastructure development? Is it right to say that the opportunity is exclusive to large construction companies? What can SMEs do? Isn't it necessary to negotiate free trade agreements whereby we can sell our products to the other side and vice versa? How can we attract trading?

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The authorities should disseminate such information to people more often, rather than merely telling us that the Belt and Road Office is now doing its work. What is it doing anyway? This is likewise the case with the Financial Services Development Council ("FSDC") as mentioned by some Members today. The Government has indeed put forth some 20 proposals. But so what? How should it implement these proposals? Should the Government set up a quasi-Policy Bureau (such as FSDC) which can truly live up to its name to deal with the relevant matters? Or, should it put such an organization under an existing government department?

But much to my bewilderment, whenever I want to discuss a particular topic, the Bureau Director in charge will leave the Chamber. Secretary Nicholas YANG has just left. Secretary Prof K C CHAN left the Chamber as soon as I began to discuss financial services just now. He had been here before I did so. But now, I want to discuss technology. But Secretary Nicholas YANG has just left. I am really sorry. Perhaps my speech does not sound quite so agreeable.

Re-industrialization certainly commands our support. Fortunately, Secretary Gregory SO is still here. He is clear about certain things. When we apply for the relevant fund under the Innovation and Technology Commission ("ITC"), we very often have to complete a pile of application forms. We are still at a loss as to how we should fill in the forms even after reading them. What should we do then, Secretary? But we are glad to see that the Hong Kong Research Institute of Textiles and Apparel has been set up for the textiles and garment manufacturing industry. It is run quite so well. I can give Members a few examples later. Nevertheless, we still face the same problem, the problem that our project proposals must undergo double vetting, meaning that a committee under the Research Institute will conduct a feasibility assessment of a proposal, and then the proposal will be submitted to ITC for second vetting. Isn't this a cumbersome and time-consuming process?

If the relevant professionals consider a proposal to be feasible in their assessment and give their approval, why is it necessary to approach another government department afterwards in order to apply for the fund? What is the point of doubling the efforts? This arrangement gives many people the feeling that they want to "push somebody off". This means they feel that … Well, whatever.

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Of course, many other issues relating to innovation and technology have also been brought up, including re-industrialization, the development of a smart city and data sharing (meaning the shared use of data). But they should tell people what data they are referring to and how to share such data, along with the provision of actual examples. The development of a smart city sounds appealing. But actually, people do not understand what a smart city is like. Everybody wants to be smart. But how can a smart city benefit us? Some terms are more concrete and sound immediately comprehensible, such as the Wi-Fi Connected City Programme. In other words, territory-wide Wi-Fi coverage will be provided. People can easily understand the meaning of territory-wide Wi-Fi coverage. It means that people can have Wi-Fi connection wherever they go, right? All this can be easily understood. What is meant by the "smart city" you refer to?

Another point I am driving at is that after all, technological investment requires government subsidies. Singapore is a competitor of Hong Kong. Their technological investment accounts for 2.1% of their Gross Domestic Product ("GDP"). In the case of Hong Kong, the rate persistently remains at zero point something percent. If we follow the example of Singapore, we should increase our investment. If Hong Kong's GDP amounts to some $2,000 billion, the authorities should invest over $40 billion, rather than saying at the very beginning that they intend to invest $18 billion this year. As I have learnt, the Budget this year will project a fiscal surplus of $80 billion. Our fiscal reserves stand at some $800 billion, and now there is an addition of this $80 billion fiscal surplus. Recently, a Chief Executive Election candidate said that the Hong Kong Monetary Authority ("HKMA") had not handed out any dividends over the past two years. Such dividends amount to some $70 billion. These three sums add up to a total of $1,000 billion. In other words, our fiscal reserves amount to $1,000 billion. Can the Government invest a huge sum in technological development?

(THE PRESIDENT resumed the Chair)

Just now, I said that I could give an example. One example of successful technological research concerns the textiles and garment manufacturing industry. Now, a yarn manufacturer is planning to make huge investment in Hong Kong and set up a fully automated yarn manufacturing factory of some 30 000 sq ft. 3882 LEGISLATIVE COUNCIL ― 15 February 2017

Can you believe it? What will it use as its raw material? All is used clothes from the recovery process. The used clothes will be pulverized and turned into yarns, and the yarns so produced will be offered for sale afterwards. These yarns are environmentally-friendly and manufactured with the use of new technologies. They are a result of successful technological research in Hong Kong and can be commercialized. Secretary, please do more promotion for such products, as this will bring forth numerous business opportunities. The successful implementation of this process can create business opportunities. This is an apt example of re-industrialization, one which originates from the traditional textiles and garment manufacturing industry. So, it is not correct to say that Hong Kong does not have the ability. Rather, Hong Kong absolutely has the ability, only that all the constraints must be removed, and the application procedures for government funding must be streamlined.

Speaking of economic development, I must talk about the offsetting mechanism concerning the Mandatory Provident Fund ("MPF") Scheme in the last part of my speech. This Policy Address makes no mention of the assistance for SMEs at all. But it does talk about how to take away the lives of SMEs: by abolishing the MPF offsetting mechanism. Just now, Mr Jimmy NG said that SMEs could not obtain any bank loans due to the requirement on banks to conduct pressure tests for the purpose of ascertaining their repayment ability. Enterprises' repayment ability is certainly low in times of poor business. With low repayment ability, enterprises will certainly be denied of any loans. If so, they will be unable to sustain their business. This is a vicious cycle. Why do enterprises (especially SMEs) have to face so many constraints, ones which stifle their room for survival? Their room for survival is already very narrow. But the Government still wants to tighten its policies.

The United States President Donald TRUMP has indicated a necessity to relax the regulation of banks. Let see if HKMA will follow suit. This is the only way to ensure their room for survival. But then, the Government now proposes to abolish the MPF offsetting mechanism. The Government's proposal is utterly unable to solve the problem. The Government also proposes to offer a 10-year transition period. What will happen in the 11th year? Enterprises will close down. Now, the Government also proposes to offer subsidy in phases. The subsidy amount is the largest in the first phase, or the first year. One will definitely hasten to apply for the subsidy at once when the subsidy amount is the greatest. Who will wait until the 10th year? So, this will not work at all. But it does not matter, as the business sector has already come up with a nice idea and LEGISLATIVE COUNCIL ― 15 February 2017 3883 will raise it with Chief Secretary for Administration Matthew CHEUNG when the time comes, in the hope of reaching an agreement and in turn resolving this matter in the long run.

I so submit. Thank you, President.

(Mr LEUNG Kwok-hung indicated his wish to raise a point of order)

PRESIDENT (in Cantonese): Mr LEUNG Kwok-hung, do you have a point of order?

MR LEUNG KWOK-HUNG (in Cantonese): As stipulated, the quorum of the Hong Kong Special Administrative Region Legislative Council shall be not less than one half of all its Members. I think the number of Members now present is less than one half of all the Members.

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

(After the summoning bell had been rung, a number of Members returned to the Chamber, but some Members had not returned to their seats)

PRESIDENT (in Cantonese): Will Members please return to their seats.

MR KENNETH LAU (in Cantonese): President, this is the last Policy Address delivered by the Chief Executive LEUNG Chun-ying in his term of office and is the lengthiest ever, covering a wide array of issues, including various policies on promoting sustainable economic development, improving people's livelihood, increasing land supply. According to statistics, the recurrent and non-recurrent expenditure on new projects will exceed $46 billion.

Adopting neither the mentality of a guardian government nor that of "no action, no mistake", the Chief Executive dared to put forth certain new ideas and new attempts in composing this year's Policy Address, such as identifying sites 3884 LEGISLATIVE COUNCIL ― 15 February 2017 from the land on the periphery of country parks for housing construction, setting up a conservation fund, and conserving private land of high ecological value via non-in situ land exchange.

For all that Members may not concur with every single recommendation outlined in the Police Address, but I must admit that the Chief Executive did have, taking into account the short-, medium- and long-term development of Hong Kong, proposed quite a number of relief measures, I regard this Policy Address a proactive and pragmatic one.

President, the theme of this session is Economic Development and Innovation and Technology. I will then focus on the development of Hong Kong's tourism and industries.

The world's political and economic landscapes underwent substantial changes last year, with the United Kingdom's decision in a referendum to leave the European Union coming first, which was followed by a "black swan" soaring out as the President of the United States of America from the presidential election, namely Donald Trump, who advocates trade protectionism. Given the complexity of the ever-changing political as well as economic situations of the world, certain hidden concerns also emerged in Hong Kong's economy. Our retail and tourism industries have been facing tough times.

According to the figures released by the Census and Statistics Department, the monthly survey of retail sales for last December was estimated to be $42.4 billion, 2.9% down from the same period in 2015, a decline for 22 straight months. On tourism figures, the number of overall overnight visitor arrivals of last year is similar to that of two years ago, except that the overnight per capita spending hit a record low at around $6,700, 7.4% down from that of two years ago.

Since the launch of the Individual Visit Scheme in 2003, our tourism industry experienced a honeymoon period for about a decade, during which the visitor per capita spending increased every year until 2014. It began to drop since then. During peak years, each Mainland visitor spent $8,900 on average, but the per capita spending in the first half of last year slipped to $7,100, representing a significant drop of about 20% from the peak years.

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What we learn from the above figures is: retailing and shopping tourism is becoming less and less attractive to Mainland visitors. Besides, the depreciation of Renminbi has served to dampen their consumption desire.

Last year, the Chief Executive suggested in his Policy Address that Hong Kong's tourism industry should move towards diversified and high value-added development, and that is why the Formula E Championship took place in Central Harbourfront area. Yet, "diversified" and "high value-added" development seems to be necessarily linked with the approach of attracting visitor flows through staging mega and large-scale events according to the Government. Following that same old approach of attracting visitors with world-class events, this year's Policy Address still proposes that we hold light shows and large-scale sports events. Devoid of novelty, this approach is nothing to write home about. Just wonder if it can serve to attract visitors having paid multiple visits to Hong Kong before to come again.

Many friends of mine, both from the Mainland and abroad, admire deeply the natural environment of Hong Kong. They travelled a long way to go hiking in places like Sai Kung, Lai Chi Wo, etc. to enjoy the beauty of nature and get in touch with the cultural landscape of villages there in the New Territories. The Hong Kong Tourism Board has been promoting cultural tours to the old industrial areas in recent years and achieved success in enabling visitors to look at Hong Kong's history from new perspectives and learn also the creativity of our younger generation. This initiative surely helps boost a local culture of creativity while enriching visitors' imagination.

Regarding "diversity", has the Government ever considered developing cultural tours and eco-tours in remote villages so as to show the visitors a new façade of Hong Kong that gives a fresh feeling? Since water, electricity, roads, sewage system and the like have been absent from those remote villages for ages, the living condition of the villagers can be improved if the Government proceeds to build tourist facilities in those villages, thus leading to a win-win situation.

President, I would also like to talk about the development of industries in Hong Kong. At present, the development of industries in Hong Kong is too narrow. Our economy has been driven by the finance industry and real estate industry and is most susceptible to economic fluctuations. Innovation and technology pose an important opportunity for developing other types of pillar 3886 LEGISLATIVE COUNCIL ― 15 February 2017 industries in Hong Kong. Last year, the Government set up the Innovation and Technology Bureau to link up top-tier global as well as Mainland research and development institutes and venture capital firms. In this year's Policy Address, there are altogether 22 paragraphs elaborating on how the Government will promote the development of applied scientific research, help those start-ups, promote re-industrialization and develop a smart city.

Hong Kong is inalienable from the Mainland in terms of economic, trade and cultural development. Both Qianhai and the Hong Kong/Shenzhen Innovation and Technology Park in the Lok Ma Chau Loop will provide platforms to enhance talent and technology exchange between Guangdong and Hong Kong. According to media reports, some 4,000 Hong Kong-invested enterprises have been registered in Qianhai as at the end of last year, an increase of about 50% year-on-year. It is estimated that the number of Hong Kong-invested enterprises will increase by over 2 000 this year.

The planning for the Lok Ma Chau Loop is a good example of our leveraging on the National 13th Five-Year Plan and fully capitalizing on the advantage of "one country, two systems" to fulfil the role as a "super connector" and channel foreign capital into the Mainland. This brings mutual benefits.

I really welcome the Government's proposal of promoting the development of emerging industries. However, regarding the contents of the Policy Address concerning innovation and technology, it seems that emphasis has been placed on developing "hardware", including allocating resources mainly for increasing land supply and taking forward infrastructure projects, such as the construction of an InnoCell adjacent to the Science Park to provide residential units to scientific research personnel from outside Hong Kong; the launch of the Wi-Fi Connected City Programme to increase the number of free Wi-Fi hotspots to 34 000 or so within two years. It seems that the Government has neglected the "software" required for supporting these initiatives. President, for "software", I mean the initiative to review the legal aspect for the industries concerned, which is absent from the Policy Address. Take, for instance, the taxi industry was hit hard by the emergence of the highly popular Uber, but innovation and technology enterprises like this one has demonstrated to us the business mode of "sharing economy" which allows greater flexibility in life. Yet, this type of commercial practice is deemed a challenge to the laws of Hong Kong. I am curious as to whether the Government will say "yes" if those start-ups similar to Uber and Airbnb establish their presence in the Hong Kong market. The problem lies in LEGISLATIVE COUNCIL ― 15 February 2017 3887 that legislation is out of step with the development in innovation and technology, thus obstructing the possible development of start-ups.

We have now entered a new world in which the economy is driven by technology and many things have changed, including the consumption pattern, the flow of people and goods, and even our cultural, moral and ethical values have been upset.

The traditional economy and modes of operation of traditional industries have all been subverted all because of the emergence of the new platform for making ride requests. Members of the relevant industry reacted strongly against its emergence and I believe that this subversive case involving innovation and technology is not an isolated example. The industry should not be the only party to take full responsibility in handling the aforesaid problem arisen during the transformation of the "old world" into a "new world". The Government just cannot circumvent the problem. Instead, while encouraging new and innovative thinking on the one hand, it should do something in the legal aspect or take complementary measures to help the existing members in the industry migrate smoothly to a whole new landscape.

I hope the Government can put in more resources and efforts in this regard, with a view to branding Hong Kong as a pioneer city in innovation and technology.

I so submit, President.

MR SHIU KA-FAI (in Cantonese): President, in regard to the Motion of Thanks, I have the following views concerning the policy area of economic development.

As a Member representing the wholesale and retail industries, I believe that all people in Hong Kong know that the retail business is taking a downturn in the recent 22 months. This is due to a lot of factors, such as online shopping, foreign currency rates, Mainland visitors not being welcome by some public members and insufficient tourist attractions as reflected by some people. As Chief Secretary for Administration Carrie LAM―who is no longer the Chief Secretary for Administration now―once said, the Hong Kong Palace Museum in West Kowloon Cultural District can actually allow Hong Kong people to appreciate many national treasures. I believe that many people in my sector and 3888 LEGISLATIVE COUNCIL ― 15 February 2017 many Hong Kong people are in support of this initiative. Although in the course of discussion, quite a number of Members have voiced their queries, I think such tourist attractions are rather important to the long-term development of Hong Kong. If we reject this project, I believe that Macao or other cities in the Mainland will campaign actively to carry out this palace museum project in their own place. I thus hope that the Government can insist to bring the Hong Kong Palace Museum to West Kowloon.

Besides, I know that the Hong Kong Disneyland ("Disneyland") will carry out its expansion construction and some Members think that the cost is rather high. I want to tell the public that we are not only looking at the ticket prices of Disneyland, how much profits it has generated each year and the like, as Disneyland is also one of the tourist attractions which can attract visitors from different places, thus driving the development of other peripheral industries such as retail, catering and transport industries. Therefore, we are in support of the Disneyland expansion project, and hope that the Bureau can persist to carry out this project.

I would also like to talk about the Hong Kong Convention and Exhibition Centre ("HKCEC"). This Policy Address also mentions the possibility of making use of the Wan Chai Sports Ground as part of the HKCEC extension. In fact, I know that this has met disagreement from a lot of people as well as from a number of Members today, as they are worried that some people will have no venue to do sports. In my opinion, sports are of course very important, as sports can become an industry if the players are doing well. Due to the excellent performance of Rex TSO, the professional boxer, more fitness shops and centres are opened. This is also a kind of industry which warrants our support. However, is this a kind of zero-sum game that the Wan Chai Sports Ground will be gone for the sake of HKCEC? For this question, I think we can discuss again. I know that the development on the Wan Chai Sports Ground will commence in 2019. During the interim, the Government should give some consideration on the need for using sports venues. For example, people can use the Aberdeen Sports Ground and the Siu Sai Wan Sports Ground in the nearby areas. Some people say that their athletic fields are not good enough. In that case, the venues concerned should be upgraded by undergoing some minor repair works. By doing so, while the Government is carrying out the development project, the organizations can also have some sports venues to use. Otherwise, by 2028, there will be a shortfall of 130 000 sq m of convention and exhibition venues in Hong Kong. HKCEC is important to all trades. We can see that places like Macao, Singapore and Shenzhen are currently developing in full force. LEGISLATIVE COUNCIL ― 15 February 2017 3889

Does Hong Kong really want to be lagging behind other places? I believe this is not what most of the people want to see. Therefore, I hope that the Government can pursue it vigorously.

As regards the Individual Visit Scheme ("IVS"), as a Member representing the sector concerned, I of course hope that there can be more visitors coming to Hong Kong under IVS. However, we also know that some residents living near the boundary are concerned about the impact of visitors, including their many suitcases, on their livelihood. I learn that Mr WONG Ting-kwong is putting great efforts in promoting the development of a boundary shopping mall which will soon be commissioned. I hope that the Government can pay close attention to the situation. After the boundary shopping mall is commissioned, the impact of visitors on the livelihood of residents living near the boundary, including Sheung Shui and Tuen Mun, will be less, and the Government can then re-consider relaxing IVS. I believe that the Government can also take this into active consideration with the Mainland authorities.

In regard to the Innovation and Technology Park at the Lok Ma Chau Loop, I want to tell Secretary Nicholas YANG that the choice of this location is rather appropriate, as we see that the development of China as a whole is concentrated in Shenzhen where there are many high technology development projects. I thus believe that the choice of the Lok Ma Chau Loop, which is near to Shenzhen, is also very appropriate in attracting talents. Therefore, I am in great support of making vigorous efforts in such development.

In regard to the Belt and Road Initiative, in these few years, many people say that the Belt and Road Initiative is rather abstract, meaning that many people do not understand how it can benefit Hong Kong people. I have some experience to share. In the past, I did not quite understand how the short titled major policies of the nation were related to us. But in fact, when the nation is vigorously supporting a policy, it is actually providing substantial business opportunities to us. I believe that when people were talking about IVS in 2003, they still did not know what was meant by IVS. Why did certain Mainland cities be opened up for more tourists to come to Hong Kong? How did it benefit Hong Kong? At this moment, people understand the implication of IVS as it will bring a lot of businesses to Hong Kong. I think if the nation is in support of a policy, it will implement it by all means. In future, the Belt and Road Initiative will involve a lot different countries and cities, and may be as far as Africa. I now cite an example. Many people say that China's express railway 3890 LEGISLATIVE COUNCIL ― 15 February 2017 development is the strongest in the world. We should not be surprised that express railway may take us all the way to Africa in future. I will also briefly mention the arrangements to co-locate immigration and customs facilities for both the Mainland and Hong Kong (co-location arrangements), and government officials must bear in mind that Hong Kong should not lose out. The co-location arrangements for the Guangzhou-Shenzhen-Hong Kong Express Rail Link have to be located in Hong Kong instead of in Shenzhen. If they cannot be done in Hong Kong, Hong Kong will be completely dissociated from the world. Hence, I hope that the Government can put in more efforts in promoting economic development.

President, I am a new Member to this Council. I know that there are five debate sessions and I do not intend to discuss more in the first session. I have to relay the questions of my sector to Secretary Dr KO Wing-man and suggest ways of deregulation, as I heard Mrs Carrie LAM mention deregulation for various trades, meaning that we cannot simply rely on regulation by the trades themselves, but the authorities should also provide assistance. If there is some time tomorrow, I will explain my views to Secretary Dr KO Wing-man.

Finally, what I would like to say is that this Policy Address should be the swansong address of Chief Executive LEUNG Chun-ying. In my view, it is absolutely not easy to be the Chief Executive, especially in Hong Kong under such political atmosphere. Because of this political atmosphere, it is impossible not to be reproached for whatever he has done, no matter how much he does not want to be reproached. Of course, I do not totally agree with everything done by Chief Executive LEUNG Chun-ying in these few years. At least on the offsetting arrangement of the Mandatory Provident Fund ("MPF") scheme, we can see how extraordinarily angry the Chairman of my political party was earlier on, and even my sector does not agree with LEUNG Chun-ying. However, does it mean that all the things that he has done are not desirable? I think this is not fair to him. For example, the elderly can now only pay $2 to take public transport to go anywhere, and they are very pleased indeed. Besides, the Old Age Living Allowance can help the elderly in real need, and a higher tier of assistance is now being added so that more people can be benefited. The higher amount of assistance can help those people in real need, and we are absolutely in support of this initiative. In fact, 74% of the elderly at present are receiving some kind of support from the Government. I think all these are benevolent measures.

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In terms of housing policy, President, I know that the incumbent Financial Secretary, Paul CHAN, who was a former Secretary for Development, has been working very hard with the incumbent Secretary for Development in identifying land sites, and they say that every single site is the fruit of hard work. As a District Council member, I know that it is actually not easy for them to discuss with members of District Councils on identifying land sites. In my opinion, housing policy is the most significant policy in Hong Kong. But how can we find more land? If there is no land, nothing can be built. If you undertake to construct a building but there is no land, how can it be constructed? Therefore, if some areas can be identified for reclamation―which should not be in the Victoria Harbour―or some green belt areas can be released, this will be a direction in my view. Financial Secretary, we have to pursue this policy persistently. Nowadays, a general housing unit costs $5 million to $6 million or even nearly $10 million, whereas a university graduate may only earn a monthly income of $10,000 to $20,000. How can they not turn over the table or not feeling angry when seeing you? It is because there is no hope at all. Hence, if the housing problem can be resolved, I believe that the grievances of Hong Kong people can be relieved. As regards housing policy, as I mentioned earlier, I am actually in support of reclamation and releasing some country park areas. Of course, these should not be the areas frequently visited by hikers, otherwise there will be more voices of opposition. In fact, there are some areas which many people will never visit in their whole life. Why do the authorities not identify these areas for development?

Finally, President, I reiterate that personally, I think Chief Executive LEUNG Chun-ying is doing his best for Hong Kong. I actually quite like him and I sincerely give my best wishes to him and his family.

I will support this Motion of Thanks. Thank you, President.

DR JUNIUS HO (in Cantonese): President, like the four-lined message on the cover, "Make Best Use of Opportunities Develop the Economy Improve People's Livelihood Build an Inclusive Society", this Policy Address of Chief Executive LEUNG Chun-ying is proactive. I deeply believe no matter who will become the next Chief Executive, his or her policy vision cannot stray far from the spirit of this Policy Address.

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The 2017 Policy Agenda contains eight chapters, and the first chapter is about Economic Development and Innovation and Technology. In this chapter, the SAR Government points out that despite the many difficulties encountered in the past four years, it was committed to a clear and firm direction, which is to continue to build an economically vibrant and creative city for living.

In order to promote economic development, the SAR Government will stay "appropriately proactive" and gather industries' views through different channels, so as to help sustain and broaden Hong Kong's economic success and capitalize on the enormous growth opportunities arising from the implementation of the National 13th Five-Year Plan and the Belt and Road Initiative. This should not be overlooked indeed.

So far, the SAR Government has rolled out over 20 measures, 9 of which are based on old measures but are infused with new elements. For instance, the development of Hong Kong as the International Legal and Dispute Resolution Services Centre in the Asia-Pacific Region is such an example which is an important measure in the Policy Address.

President, I particularly want to talk about how legal services in Hong Kong can capitalize on the golden opportunity brought by the national policy of the Belt and Road Initiative to further make our functions useful. We all know that there are 65 countries along the Belt and Road route, and these national enterprises, together with their capital, will flow outward. In this process, how can these enterprises be protected by sound and certified legal advice that covers their interests?

This can be achieved with the laws in Hong Kong and the Mainland. In doing commercial businesses, the drafting of legal contracts and agreements and document certification are important preliminary procedures that need to be done accurately. In the event of investment problems or commercial disputes, the parties concerned can resolve such problems or disputes through arbitration and mediation, apart from taking the matter to court.

We do have the determination to set up the International Legal and Dispute Resolution Services Centre in the Asia-Pacific Region here, but the problem is how we are going to grasp the opportunities rendered by these private enterprises LEGISLATIVE COUNCIL ― 15 February 2017 3893 in future when they go global under the Belt and Road Initiative of our country, and persuade them to use the International Legal and Dispute Resolution Services Centre in Hong Kong to resolve their disputes. This is where the art of the matter is.

In the past 30-odd years, Hong Kong has been instrumental in assisting the reform and opening of China. At that time, China lacked capital. Foreign capital investments were directly funnelled into the China market through Hong Kong. The setting up of attesting services in Hong Kong by the Ministry of Justice was a brand new idea at that time, through which a lot of foreign capital was channelled into the Mainland to conduct commercial activities. With more than 30 years of experience, Hong Kong is evidently serving a very important function in this regard. Similarly, we can reverse this idea and provide similar protection for Mainland enterprises which intend to make foreign investments under the Belt and Road Initiative because these enterprises also need similar legal protection that is supported by Hong Kong and Mainland laws.

The legal foundations of the 65 Belt and Road countries for this Initiative are mostly yet to take shape. If these countries can make use of our attesting services to help them attest their legal documents under the Belt and Road Initiative from the start, in the event of future legal disputes, they will seek assistance from the International Legal and Dispute Resolution Services Centre in Hong Kong to resolve their disputed business. Hence, we should capitalize on this new opportunity and strengthen communication with the Ministry of Justice in the Mainland, so that the legal services sector in Hong Kong can have a sustainable development under the leadership of the Secretary for Justice.

I wish to move from this point to talk about the International Legal and Dispute Resolution Services Centre. I think the Lok Ma Chau Loop is a desirable location for this Service Centre. Although the Lok Ma Chau Loop is supposed to be a base or centre for developing innovation and technology endeavours, I think an independent building can also be constructed in this newly developed area because sites in other parts of Hong Kong are indeed too expensive. We may have other policies to promote Hong Kong as an arbitration and mediation centre, but in terms of scale, the related facilities are incomparable to those overseas, especially those in our competitor Singapore. Hence, on the hardware front, it should be feasible to establish a modern arbitration or 3894 LEGISLATIVE COUNCIL ― 15 February 2017 mediation centre of considerable scale in the new development area in the Lok Ma Chau Loop, with a view to strengthening the integration of legal services in Hong Kong and the Mainland.

Hence, I hold that the Policy Address is proactive on its economic measures. I will supplement other points on legal services in the last session later. But on the economic front, I think legal professionals in Hong Kong can capitalize on this opportunity to extend our legal services. Although the Belt and Road Initiative may look or sound unrelated to us, I wish to bring out this point and explain how we can put this idea into action. I thus wish to express my support to the Policy Address and raise this point in passing. I do not think this is the last Policy Address. As I said earlier, no matter who will become the next Chief Executive, I cannot see any reason why he or she will not follow this Policy Agenda, which is comprehensive in seeking good development opportunities for Hong Kong, when he or she takes forward his or her administration. I so submit. Thank you.

MR JAMES TO (in Cantonese): President, I just read an item of breaking and exclusive news before I stood up to speak. It is rumoured that Mr LEUNG Chun-ying may be elevated to the position of Vice-Chairman of the National Committee of the Chinese People's Political Consultative Conference ("CPPCC"). The news report says that as shown by the case of Mr TUNG Chee-hwa, Mr LEUNG may well resign from the post of Chief Executive before completing his term once an announcement is made.

If the news is true and the predictions are correct, I would think that this is indeed very good news. Why? It is because this arrangement of the Central Government is not bad at all. The Central Government has already, as many people generally believe, ordered or caused LEUNG Chun-ying not to seek re-election. So, if the Central Government really makes a further arrangement to let Mr LEUNG Chun-ying resign a few months ahead of time, I think we can be very certain that it really intends to do good to Hong Kong.

President, since he will soon leave his job and the end of his term is fast approaching, some may wonder why I should still say something like this. They LEGISLATIVE COUNCIL ― 15 February 2017 3895 may think I am a bit too mean and enjoy seeing others suffer. But I think as a Member of this Council, I should speak my mind. Anyway, let me now turn back to the Policy Address. I am a veteran Member, so how can it be possible that I have nothing to say about the many policy issues involved? The only thing is that, as I put down in the script of my speech, even though there is nothing wrong with the Policy Address itself, once the Chief Executive has announced that he will not seek re-election, the Policy Address is bound to be perceived as having the colour of a caretaker government.

Let me explain my reference to a caretaker government here. Technically, the term of the present Government will end on 30 June. However, prior to this, a new Chief Executive will be elected if everything runs smoothly on 26 March, and we must also note that the new Chief Executive will have been shaping his or her political platform, governing philosophy, policy views, and so on for a long time since the pre-election days. Therefore, his or her election will actually mark the beginning of political changeover. Also, as the Office of the Chief Executive-elect will be established in March, civil servants must in fact start working in this present period of political platform debates, seeking to grasp the political platforms of four or five major candidates and exploring how their political platforms can be implemented after 1 July no matter who is elected. This is in fact their duty.

Hence, from all perspectives, the focus of this Policy Address can or should only be some mere short-term measures which can be completed before 30 June. Of course, the current-term Government can also expound its long-term governing philosophy, recap its governance, look ahead, or even recap the success and failure of the Chief Executive over the past few years. In case there were any policy failures, such as mistakes or the implementation of any socially divisive policies, the Chief Executive should take the opportunity to repent and apologize, in the hope that he can leave behind a better public image after his departure, that the public can assess his performance more fairly, and that he can even restore public confidence in our society and its institutions. And, he may also seek to identify his inadequacies.

However, rather than doing so, Mr LEUNG has surprisingly claimed that all the undertakings in his election manifesto have basically been honoured, 3896 LEGISLATIVE COUNCIL ― 15 February 2017 showing an apparent lack of any slightest self-examination, repentance and alertness to his own inadequacies. I for one find this very disappointing. This may be due to the fact that Mr LEUNG has full confidence in himself and considers himself the saviour of Hong Kong. Or, he may even think that nothing he has done over the past few years has ever disappointed Hong Kong people.

There are things that we would not dispute. We democrats, or the opposition camp in the words of some, do likewise agree that the construction of more housing units, the identification of more land sites, the maintenance of a reasonable supply of flats and the establishment of a land reserve are measures deemed by all as necessary. However, I also think that if we do not introduce any technical remedies to plug the obvious loopholes in some specific short-term measures and seek to complete the task in these few months as far as possible, then there can be no effective review, and the SAR Government and civil servants will be unable to begin afresh in the future.

President, there is one thing that especially merits our vigilance. If the news report today is not true and LEUNG Chun-ying is not going to quit early due to his elevation to the position of Vice-Chairman of the National Committee of CPPCC, then it is all the more necessary for me to remind him that he must never again do any things which will perpetuate the split of our society, and which will cause lasting damage. What exactly are these things? It is very difficult to tell, but I can imagine that he may still need to make some more appointments in the next few months, including the appointment of members to certain university councils and various committees, especially some important committees closely related to financial affairs.

Will Mr LEUNG think that he can use his power to the fullest extent while he is still in office and appoint some "LEUNG's fans" or people who share his beliefs, policy visions and political lines to these bodies? Will these people continue to cause damage and social split in certain committees, thus enabling the "spectre" of Mr LEUNG to haunt and influence these committees? Will they place landmines here and there to make it even more difficult for any Chief Executive to govern Hong Kong in the future? Will they seek to make Hong Kong continue to live under his "spectre" and difficulties, agony and anxiety?

LEGISLATIVE COUNCIL ― 15 February 2017 3897

Let me offer Mr LEUNG a piece of advice. He may think that what the rumours suggest is true and he will be appointed the Vice-Chairman of the National Committee of CPPCC, and that the arrangement to promote him to the rank of state leaders is a gesture of full recognition and even forgiveness on the part of the Central Government, including the ruling clique with XI Jinping as the core. As this gives him the opportunity to serve the country at a higher level, he may think that he can exercise all of his power to the fullest extent in the next few months and appoint "LEUNG's fans" to certain committees. If he really thinks so, I must say that he should be really careful. In my opinion, interpreting the arrangement made for him by the Central Government in such a way will only put him in a very dangerous position. If he is really promoted to the rank of state leaders, he may think that whoever the next Chief Executive is, no one will dare to follow up the UGL incident, because the promotion is an arrangement to reflect that the Central Authorities has already decided to let bygones be bygones or even to compromise.

Anyway, I hope the LEUNG Chun-ying administration or its Bureau Directors would be careful, especially those who have very similar political lines and policy visions to his. They should never think that they are free to exercise all their power to the fullest extent in the coming few months while they are still in office. If their work, their ways of doing things or the results thus created bring about great impacts to society, they will definitely be made to pay for it not only by Hong Kong people and Members of this Council, but also by the Central Government.

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

(No Member indicated a wish to speak)

PRESIDENT (in Cantonese): If no Member wishes to speak, I will invite the four public officers to speak. On the basis of the 15-minute speaking time for each officer, they may speak for up to a total of 60 minutes.

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FINANCIAL SECRETARY (in Cantonese): President, the Chief Executive has proposed a series of measures in this year's Policy Address under the theme of "Make Best Use of Opportunities Develop the Economy Improve People's Livelihood Build an Inclusive Society". As the Financial Secretary, I will fully collaborate in terms of fiscal resources.

After a relatively critical period in early 2016, global economy gradually stabilized in the second quarter, and Asia's trade performance improved correspondingly, followed by a rise in Hong Kong's exports. Domestic demand remained resilient, and the growth in private consumption expenditure stepped up moderately in the third quarter, amid a rebound in investment expenditure. Hong Kong's economic growth also picked up gradually during the year, and accelerated to 1.9% in the third quarter, a rise of 1.1 percentage points from the first quarter.

Latest statistics indicated a continuous improvement in Hong Kong's economy in the fourth quarter last year. Growth in exports of goods accelerated notably, coupled with a rebound in visitor arrivals, significantly reducing the decline in retail sales volume. In general, business sentiment also improved in the last two quarters.

Regarding the property market, after the Government's announcement of a new round of demand-side management measures in November and the second rate hike by the United States Federal Reserve ("Federal Reserve") in December last year, the property market has cooled down already. The rise in property prices has substantially slowed down, and transactions have become quiet with a sharp decrease in investment demands. According to the Rating and Valuation Department, property prices only slightly increased by 0.1% monthly in December, much lower than the monthly average increase of 2.6% between August and October. Figures from the Land Registry showed that average monthly transactions in December and January plunged to around 3 400, significantly lower than the average monthly transactions of 6 700 between August and October last year. The Inland Revenue Department's figures indicated that residential property transactions to which doubled ad valorem stamp duty were applicable accounted only for 10% of overall transactions over the past two months, lower than the proportion of 26% over the first 10 months last year.

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The labour market remained in a state of full employment. The latest employment rate stayed low at 3.3%, while the number of employment was on the rise continuously, and employment earnings kept rising in real terms.

Hong Kong is an open and small economy, and despite regaining stability recently, whether it can maintain this momentum in 2017 very much depends on changes in the external environment. The International Monetary Fund predicted slightly faster economic growth worldwide this year, while still expecting a moderate and uneven growth pattern and various risks to the global outlook.

The economic situation in the United States, the largest economy in the world, improved in the latter part of last year, and labour market continued to recover. The market predicts that the new government will increase infrastructural expenditure and introduce taxation measures. Economic growth is expected to moderately gather pace this year.

As expected by the market, the Federal Reserve opted to leave interest rates unchanged in early February. With the improvement in the United States' economy, the market expects the Federal Reserve to stick with interest rate normalization, but the pace of rate hike will depend on economic performance and other variables.

One variable is the policy stance of the new government in the United State in relation to trade and economy. On the backdrop of the new policy of putting "America First" proposed by the new regime in the United States, the market is concerned about whether the United States will impose more trade barriers. Owing to the United States' importance to global finance and trade, its economic policy will be highly influential in economic recovery and financial markets worldwide.

Although the eurozone maintains mild economic growth, the outlook is still challenging. After the House of Commons of the United Kingdom passed the Brexit bill in early February, the bill will be tabled before the House of Lord for consideration. The British Government intends to trigger Brexit negotiation by March upon completing the entire legislative process. The negotiation may last two years, seriously clouding the trade relations between Britain and the European Union for a long time.

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Moreover, the risks in the Italian banking system have been allayed earlier, but structural problems like high unemployment rates and heavy debts will go on affecting economic performance in the eurozone. We also have to pay attention to the general elections to be held in a few major European economies this year, such as Germany, France and the Netherlands. The economic situations will become even more complicated if political parties against the European Union come to power. In Japan, growth is expected to stay weak because of structural problems in its economy.

The Mainland economy performed soundly, growing 6.7% last year, and growth in the fourth quarter accelerated modestly to 6.8%, much faster than many advanced countries and emerging markets. As the second largest economy in the world, Mainland remains a pillar of global economic growth.

Global economy sustains modest growth. Asia's trade and Hong Kong's exports are expected to improve this year, yet export performance may still fluctuate in the face of numerous uncertainties. Stability in the job market and favourable income situation are essential to maintain growth in Hong Kong's domestic demand. If visitor arrivals can keep on recovering, it may benefit the retail sector and services exports. That said, the uncertain pace of interest rate hike in the United States and the divergence in monetary policies among major central banks may lead to sudden changes in fund flows, causing volatility in global financial markets. We will closely monitor the impacts of external uncertainties on the local asset markets and economic sentiment.

In terms of prices, inflation was modest last year. Underlying inflation slightly eased to 2.3% in 2016, trending down for five consecutive years. Short-term inflationary pressure is not substantial with mild imported inflation and gentle increase in local cost pressures. However, energy and raw material prices bounced back last year, and the agreement among major petroleum exporting countries to cut production offered support to oil prices. We have to go on monitoring the future impacts of various factors on global inflation.

I will announce the economic growth and inflation forecasts for the whole year when I publish the Budget next week.

President, despite the complexities and unpredictable nature of the external environment, Hong Kong is able to leverage the unique advantages of "one country, two systems", benefiting from the Mainland's continuous economic LEGISLATIVE COUNCIL ― 15 February 2017 3901 development, and seize the enormous opportunities brought by intensification of the country's reform and opening under the National 13th Five-Year Plan. Hong Kong will endeavour to consolidate its core advantages, develop innovation and technology, promote diversification of industries and maintain investment in infrastructures and human resources, as well as to conduct land development, so as to enhance our overall competitiveness.

The Government will comprehensively support the "One Belt One Road" initiative and actively encourage Hong Kong enterprises to focus future development on "One Belt One Road" markets, leveraging on Hong Kong's edge to sustain stronger trade relations with Belt and Road economies.

To facilitate Hong Kong enterprises and investors to explore new markets, the Government has been working actively to establish closer trade and investment connections with our trade counterparts. Among these counterparts, the Mainland has always been Hong Kong's most important trade partner. The two sides are deliberating on expanding and enhancing the Mainland/Hong Kong Closer Economic Partnership Arrangement ("CEPA").

Regarding tourism, the Government will keep on improving tourist facilities and introduce diversified tourism products with a view to drawing more high-yield overnight visitors and promoting balanced and healthy tourism development.

In terms of shipping and logistics, the Government maintains multi-pronged measures to promote the sector's development in the long run. Aircraft financing has become a considerable industry worldwide. This year, the Government plans to submit an amendment legislation to the Legislative Council and introduce tax concession to attract aircraft leasing companies to develop business in Hong Kong. The Government also supports the Airport Authority in developing the Airport North Commercial District where the planned SKYCITY development will enhance Hong Kong International Airport's attractiveness and competitiveness as a global aviation hub. In respect of the maritime sector, the Government set up the Hong Kong Maritime and Port Board last year to promote the development of our maritime cluster. This year, we will put in effort to attract more renowned maritime enterprises.

In the area of financial development, the International Monetary Fund issued a report last month which commended the Government's powerful and effective policy framework, including its prudent fiscal policy and sound 3902 LEGISLATIVE COUNCIL ― 15 February 2017 regulation of the financial system. The report also agreed that our concrete buffer built over the years can enhance Hong Kong's capacity against adverse market environment. Moreover, the Government will strive to safeguard Hong Kong's status as a global offshore Renminbi ("RMB") business hub, develop the asset management sector, encourage enterprises to set up treasury centres in Hong Kong and promote healthy development of financial technology, so as to consolidate Hong Kong's status as an international financial centre.

Concerning the promotion of innovation and technology, last year, the Innovation and Technology Bureau introduced various measures costing $18 billion in total, and such measures are starting to bear fruits. This year, we will keep it up and propose numerous measures to further optimize an atmosphere favourable for innovation and technology.

President, three Directors of Bureaux will give detailed replies on tasks related to finance, development of our industries and innovation and technology.

With these remarks, President, I urge Members to support this year's Policy Address. Thank you.

SECRETARY FOR COMMERCE AND ECONOMIC DEVELOPMENT (in Cantonese): President, in my reply, I will express the salient points on 10 aspects of work under the purview of the Commerce and Economic Development Bureau.

First, it is about our work on concluding Free Trade Agreements ("FTAs") as well as Investment Promotion and Protection Agreements ("IPPAs"). We will continue to actively seek to conclude FTAs with our trading partners, so as to assist Hong Kong business operators and investors to develop their overseas markets and facilitate the long-term economic development of Hong Kong. We commenced negotiation on entering FTA with the Association of Southeast Asia Nations in July 2014 and we are now at its final stage. We anticipate that we will complete the negotiation early this year.

Apart from FTAs, we also strive to conclude IPPAs with other economies, so as to give additional assurance to overseas investors to invest in Hong Kong and also offer protection to Hong Kong business operators on their investments overseas and enhance the role of Hong Kong as an investment hub.

LEGISLATIVE COUNCIL ― 15 February 2017 3903

To date, we have signed IPPAs with 19 economies, including the one we signed with Chile in November 2016. Besides, we have also concluded IPPA negotiations with Bahrain, Myanmar, the United Arab Emirates and Mexico, and we will sign IPPAs with them after they have completed their necessary internal procedures.

We will continue the IPPA negotiations with Iran and Russia this year. Moreover, in his official visit to India in February 2016, the Chief Executive announced the mutual intention of the SAR Government and the Indian local government to initiate an IPPA negotiation.

Second, it is about strengthening economic ties and cooperation with the Belt and Road countries and other emerging economies. The Chief Executive led a business delegation to India in February. Since then, we have been actively liaising with India, striving to kick start the IPPA negotiation within this year. We also commenced FTA negotiations with Georgia and Maldives respectively in September 2016.

In last May, the Government, in association with the Hong Kong Trade Development Council ("TDC"), organized the first Belt and Road Summit. The event successfully gathered over 2 400 political and business leaders from the Mainland, Belt and Road countries and other regions to explore the opportunities brought by the Belt and Road Initiative. In order to further explore and promote the business opportunities brought by the Initiative, the Government and TDC will organize the Belt and Road Summit again in September this year.

Moreover, after reviewing the work and the existing set up of the Belt and Road Office earlier, the Government considers it necessary to beef up the establishment and resources of the Office, including the creation of directorate posts and other permanent posts to ensure that the Office can take forward the work under the Initiative more effectively on a long-term basis.

On the other hand, the Central Government will host a Belt and Road Forum in May this year to highlight the achievements of the Belt and Road Initiative. The Forum is the highest-level forum since the introduction of the Initiative, and the SAR Government is now preparing to take part in the Forum.

Third, it is about strengthening the external liaison of Hong Kong. At present, we have a total of 12 overseas Economic and Trade Offices ("ETOs"). 3904 LEGISLATIVE COUNCIL ― 15 February 2017

In order to strengthen our trading ties and cultural exchanges with Korea, we have been actively liaising with the Korean Government to set up an ETO in Seoul as early as feasible.

Moreover, in order to further explore overseas markets and tie in with the Belt and Road Initiative, we are commencing preliminary work to establish ETOs in India, Mexico, Russia, South Africa and the United Arab Emirates, so as to actively explore new markets and business opportunities and facilitate trade and investment.

Fourth, it is about the Mainland/Hong Kong Closer Economic Partnership Arrangement ("CEPA"). After over decade-long development, the two sides have mutually signed 10 supplements and 2 subsidiary agreements under CEPA, which have enabled Hong Kong products and most service sectors to enter the Mainland market under preferential treatment. Given the continual broadening of economic and trading ties between the Mainland and Hong Kong, the two sides have agreed to collate, coordinate, expand and enhance cooperation under CEPA.

The SAR Government is now discussing with the Ministry of Commerce on how to further facilitate trade and investment of the two side through investment, economic and technical cooperation. We anticipate that concrete results can be obtained by the middle of this year.

Fifth, it is about convention and exhibition ("C&E"). The C&E industry gives impetus to our exports trade, facilitate the development of our products and services industry, and attract overnight business visitors to Hong Kong. A consultancy study shows that there will be a shortfall of about 130 000 sq m of C&E space in Hong Kong at peak periods in 2028.

In order to maintain the competitive edge of Hong Kong in C&E, the Government has explored different options to increase C&E area in Hong Kong. For instance, the Government will construct a convention centre above the Exhibition Station of the Shatin-to-Central Link upon the latter's completion in around 2020. The West Kowloon Culture District ("WKCD") Authority is also considering, as a preliminary idea, the development of a medium-sized multi-purpose venue for exhibition, convention and performance purposes in the western part of the WKCD through private sector financing. As regards the AsiaWorld-Expo on the airport island, land has also been reserved for its expansion.

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However, we estimate that even with the topside development above the Exhibition Station of the Shatin-to-Central Link, the AsiaWorld-Expo expansion and the C&E facilities in the WKCD, the demand for C&E venues in Hong Kong at peak periods in 2028 can still not be satisfied. Hence, the Government has to continue to explore other sites for constructing or expanding C&E facilities.

In view of the overall development plan of the Home Affairs Bureau for sports facilities in Hong Kong, the Government considers it feasible to examine the possibility of comprehensive development at the Wan Chai Sports Ground site to provide C&E, recreational and sport as well as community facilities. The proposal is an initial idea and the Government has not finalized its plan. The Government will continue to listen to different sectors' views and consider further when the outcome of a feasibility study is available. I would like to take this opportunity to thank Members for speaking in support of developing the C&E industry just now and for mentioning the development of tourism facilities, including the expansion of the Hong Kong Disneyland.

Sixth, it is about the platform for professional services. With the stable development of Asia and neighbouring regions, emerging economies have grown in an increasingly apparent trend, thus generating an enormous demand for high value-added professional services in various domains. We must give full play to the edges of Hong Kong to assist the professional services industry in developing their external markets. The Government already launched in November 2016 the $200 million Professional Services Advancement Support Scheme to support professional service providers in Hong Kong to carry out worthwhile projects and take part in external exchanges, cooperation and related promotional activities, as well as to enhance our professional service standard and their competitiveness in external markets.

Seventh, it is the tourism industry. Due to various reasons, tourism in Hong Kong has entered its consolidation period in recent years. Given competition in the region is getting intense, we kicked started last year more high value-added activities, such as cultural and gourmet events, in a bid to attract more overnight visitors to Hong Kong. These measures are starting to pay off. As compared to a drop of 5.8% in the first quarter of last year, the number of overall overnight visitors recorded an increase of 2.4% in the fourth quarter, which is a significant improvement, and the numbers of Mainland and non-Mainland overnight visitors also recorded an increase. We will follow the 3906 LEGISLATIVE COUNCIL ― 15 February 2017 policy direction laid down last year to enrich our tourism products and enhance the competitiveness of our tourism hardware, with a view to maintaining the healthy development of the tourism industry.

We will continue to promote our great variety of tourism products this year. To attract more visitor groups to Hong Kong, we will brand unique events in Hong Kong that showcase our gourmets, vibrant lifestyle and local cultural characteristics as mega events of Asia. Examples of such events include the Hong Kong Wine and Dine Festival, the Hong Kong Cyclothon, the Hong Kong International Dragon Boat Carnival and the Tai Hang Fire Dragon Dance. Moreover, a number of mega events will continue to be hosted in Hong Kong this year to attract high spending overnight visitors, such as the FIA Formula E Hong Kong ePrix, which made its debut successfully in Hong Kong last year, and the Hong Kong Rugby Sevens.

Besides, we will support the Hong Kong Tourism Board ("HKTB") to launch creative light shows and renew the show of "A Symphony of Lights" first launched in 2004 by reprogramming its lights and effects to make the show a Hong Kong Brand light show.

To make the 20th anniversary of the establishment of the Hong Kong Special Administrative Region this year, we will roll out, in coordination with the tourism industry, a series of benefits for tourists to make their visits here value-for-money, and we will also allocate more resources for HKTB to organize celebration activities, including a large-scale summer carnival, to create an unforgettable experience for tourists.

Regarding the Food Truck Pilot Scheme, 16 food trucks have commenced business this month to provide a variety of dishes for tourists and the public, and to show off the good food hygiene and safety of Hong Kong.

In order to attract more high-spending tourists to Hong Kong, we will also allocate more resources for HKTB to actively develop Meetings, Incentives, Conventions and Exhibitions as well as cruise tourism.

Moreover, we are planning to set up a Tourism Node at the former runway tip adjacent to the Cruise Terminal. We aim at building a world-class tourism, entertainment and leisure hub to attract local as well as international visitors.

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Eighth, it is about broadcasting. The Government will continue to take forward the development of domestic digital terrestrial television ("DTT") in Hong Kong.

Regarding free-to-air television channels, the Hong Kong Television Entertainment Company Limited ("HKTVE") has launched its integrated Chinese channel since 31 March 2016. In accordance to its licence requirements, HKTVE will have to launch its integrated English channel no later than 31 March 2017. The Fantastic Television Limited was granted a free TV licence on 31 May 2016, and it will have to launch a Chinese channel no later than 30 May 2017. With the commissioning of more free-to-air television channels, members of the public will have more options.

Ninth, it is about telecommunications. The existing assignments of 200 MHz and 1 800 MHz frequency spectrum for mobile services are due to expire between November 2020 and September 2021. The Communications Authority and the Commerce and Economic Development Bureau yesterday (14 February) launched the second round of public consultation on the proposed reassignment arrangements and the proposed method for setting the related spectrum utilization fee. The consultation will last for two and a half months. We anticipate that we will arrive at a decision and make an announcement on this matter by the end of this year.

On the other hand, person-to-person telemarketing calls can provide commercial information to customers, but this type of telephone calls, to a certain extent, also causes nuisance to the public. This has given rise to public concern on the need to enforce stricter control on this type of telemarketing service. In this connection, we plan to commence a consultation this year to solicit views from stakeholders and the public on how to strengthen regulation on person-to-person telemarketing calls.

Last but not least, it is the creative industries. We value the importance of talents and market development in promoting the development of the creative industries. Regarding fostering talents, in a relevant panel meeting earlier, I introduced two projects, one of which is a professional training programme for the film industry and the other is an overseas training scheme for film practitioners in the post-production sector, with the latter to be launched in the coming three years. We are now exploring the detailed arrangements with the related sectors and organizations. Our preliminary idea is that the professional 3908 LEGISLATIVE COUNCIL ― 15 February 2017 training programme, which will provide 200 places, will start inviting applications in the latter half of this year, while the overseas training scheme, which will support 10 practitioners to study overseas every year, will start sending the first batch of practitioners to further their studies overseas in the fourth quarter of this year.

Regarding market development for the film industry, Hong Kong enjoys a comparative edge in respect of post-production, stunt shooting, location filming and production facilitation services to the emerging markets along the Belt and Road. In order to develop business opportunities in this regard, we will organize, in conjunction with the film industry, Belt and Road promotional tours to countries with market potential. We plan to visit Iran and Malaysia this year and then to Indonesia, India, etc., to promote the film industry of Hong Kong.

We will strive to promote cross-sector cooperation in the creative industries. We especially encourage the industries to unleash the potentials of their intellectual property rights to attain cross-sector synergy, so as to facilitate the creative industries to progress up the value chain and pursue diversified development. In this connection, we maintain contacts with the stakeholders through meetings and seminars to be held this year to proactively promote cross-sector business matching.

With these remarks, President, I urge Members to support the Policy Address this year.

SECRETARY FOR INNOVATION AND TECHNOLOGY (in Cantonese): President, I thank Members for providing their precious views on innovation and technology. Since the Innovation and Technology Bureau was set up in November 2015, we have implemented a series of measures to promote the development of innovation and technology, including promoting research and development, supporting start-ups, promoting re-industrialization, assisting small and medium enterprises ("SMEs") in upgrading and transforming, developing a smart city and making use of innovation and technology to improve people's lives.

Early last year, we put forward funding applications for various schemes and funds involving $18 billion and they were all approved by the last Legislative Council in July last year before its summer recess. The various schemes have been implemented with the exception of two funds, namely the Innovation and LEGISLATIVE COUNCIL ― 15 February 2017 3909

Technology Venture Fund and the Innovation and Technology Fund for Better Living, which will be launched in the middle of this year. These measures will promote the development of innovation and technology in Hong Kong in the coming five years or an even longer period of time. This year in the Policy Address, the Chief Executive announced a number of new initiatives to further improve the innovation and technology ecosystem. In the following, I will respond to the main views raised by Members.

With our endeavours for the past one-odd year, the innovation and technology industry in Hong Kong has desirable development in various aspects. The innovation and technology start-up environment is getting improved while the development of innovation and technology industry is getting flourishing. We are delighted to see some top-tier global research and development institutes, such as Massachusetts Institute of Technology and Karolinska Institutet from Sweden, establishing their presence in Hong Kong. The presence of these well-known institutes indicates that Hong Kong has favourable environment for the development of innovation and technology. Besides, Hong Kong has also attracted some world-leading venture capital companies to set up start-up platforms here. Sequoia Capital initiated the Hong Kong X-Tech Startup Platform in the middle of last year, as it recognizes the innovation and technology capacity of higher education institutions in Hong Kong.

The development of innovation and technology is a major trend of the world, and Hong Kong should definitely not lag behind. One of our major initiatives is to promote research and development. At the end of last year, we launched the $2 billion Midstream Research Programme for Universities, which aims to encourage cooperation between universities and top-tier global research and development institutes, with a view to conducting more theme-based midstream research in focused technology areas for further downstream research work or product development.

The highlight of innovation and technology development this year is to put in place the development of a Hong Kong/Shenzhen Innovation and Technology Park in the Lok Ma Chau Loop with the cooperation of the Shenzhen Municipal Government, in order to set up key bases for scientific research and to build the largest innovation and technology platform ever in Hong Kong. The Hong Kong/Shenzhen Innovation and Technology Park will bring unprecedented opportunities for Hong Kong, attract the presence of world-leading enterprises, research and development institutes and higher education institutions inside and 3910 LEGISLATIVE COUNCIL ― 15 February 2017 outside the country, and attract talents from various places in the world. In a joint meeting with Panels of the Legislative Council on 6 March, we will explain the details of the Lok Ma Chau Loop project and study how to commence the works concerned as soon as possible, and we hope that Members can give their support.

Members always mention the significance of incubating talents. Talents are very important to the building of a comprehensive innovation and technology ecosystem. In addition to incubating local innovation and technology talents, we are also active in attracting more overseas professionals to develop in Hong Kong. In the Policy Address this year, the Chief Executive announced the Government's support to the Hong Kong Science and Technology Parks Corporation in constructing an InnoCell adjacent to the Science Park, in order to provide residential units with flexible design and ancillary facilities, such as shared working spaces, for leasing to tenants and incubatees in the Science Park. This new measure is a breakthrough in our policies, which fully reflect our determination in promoting the development of innovation and technology. We believe that the InnoCell will attract more top-notch talents in innovation and technology inside and outside the country to have cooperation and exchanges with local researchers.

As regards local talents, last year, we raised the monthly allowance under the Internship Programme in order to encourage university graduates to work in the innovation and technology sector. We will extend the Programme to the incubatees and SME tenants in the Science Park and Cyberport so that more enterprises and young people can be benefited.

We must adopt a multi-pronged approach in the incubation of talents, and the Policy Address has also introduced initiatives in continuing education and STEM education. Besides, apart from the supporting measures directly provided by the Government, the accelerators operated by public and private institutions, the incubation programmes and the many shared working spaces also play a key role in the incubation of innovation and technology talents. We will continue to liaise and work with various sectors in creating an energetic innovation and technology environment and in enriching our talent pool.

Another key area of work of the Innovation and Technology Bureau is to promote re-industrialization. I am very glad that Members concur with our development direction in promoting smart manufacturing and developing LEGISLATIVE COUNCIL ― 15 February 2017 3911 high-end manufacturing industries so as to attain diversification of industries. The Policy Address this year has also announced a new initiative. We have engaged the Hong Kong Productivity Council to establish an Inno Space. It will provide workspace and technical support to start-up entrepreneurs, secondary school students/university students and graduates, and will assist them in developing their innovative ideas into industrial design, which may subsequently be translated into products through prototyping.

Besides, the first stage of the Science Park Expansion Programme has already commenced. The total costs of this project together with the construction project of an Advanced Manufacturing Centre and a Data Technology Hub in the Tseung Kwan O Industrial Estate amount to $12.6 billion. They provide the infrastructural facilities necessary for the development of re-industrialization.

A comprehensive innovation and technology ecosystem must include start-ups with flourishing development. Therefore, we have been vigorously supporting the development of start-ups by providing subsidies to these start-ups at different stages. At present, we are working on the guidelines and terms of the $2 billion Innovation and Technology Venture Fund in order to select eligible venture capital funds as partners to co-invest in innovation and technology enterprises, as well as to bring in the professional knowledge and business network of venture capital funds. We expect that the Fund will be launched in the middle of this year.

SMEs account for over 98% of local enterprises and are the mainstay of the Hong Kong economy. At the end of last year, we introduced the $500 million Technology Voucher Programme to subsidize the use of technological services and schemes by SMEs for upgrading and transforming. The Programme is warmly received by the sector. As at the end of January this year, we have already received more than 130 applications, while more than 800 SMEs have registered on the website of the Programme. They are now making active preparation to participate in the Programme.

Some Members are concerned about the development of a smart city, and hope that the Government can open up more data for reuse by the sector and the public. This is exactly the development direction of the Government. We will continue to encourage various departments to explore and open up more common data, and will give impetus to various departments to enhance public service 3912 LEGISLATIVE COUNCIL ― 15 February 2017 through big data analysis and application. Through the $500 million funding earmarked in the Policy Address this year, we will also assist various departments in making use of innovation and technology to enhance public service quality. Moreover, in September last year, we started a consultancy study to map out a blueprint for the development of a smart city in Hong Kong. We are currently taking the initiative to collect public opinions online and will consider the various suggestions from Members. The consultancy study is expected to complete in the middle of this year.

Facing keen competition globally, we will continue to study with various stakeholders on how to enhance the overall competitiveness of Hong Kong. We will consider various feasible and suitable measures, and study the tax and financial initiatives offered by other countries to innovation and technology activities, with a view to enhancing Hong Kong's appeal to the enterprises, research and development institutes and talents inside and outside the country, so that Hong Kong can become a priority area in the development of innovation and technology.

President, in the year to come, we will continue to work very hard in carrying out the existing measures and will introduce new initiatives to promote economic development and improve people's living quality through innovation and technology. I am confident that the new innovation and technology initiatives in the Policy Address can benefit the sector (including SMEs) and the public, especially our young people.

With these remarks, I urge Members to support the Policy Address this year. Thank you, President.

SECRETARY FOR FINANCIAL SERVICES AND THE TREASURY (in Cantonese): President, first of all, I would like to thank Members for expressing many valuable views.

This year is a year of great significance since it marks the 20th anniversary of the establishment of the Hong Kong Special Administrative Region. The financial sector of Hong Kong has been expanding both in depth and width over the past 20 years. As a world leading financing centre, the Stock Exchange of Hong Kong ranked first globally in terms of funds raised through initial public LEGISLATIVE COUNCIL ― 15 February 2017 3913 offerings ("IPOs") for two consecutive years in 2015 and 2016, and the total amount of funds raised in the past 20 years were close to $3 trillion. The number of listed companies also increased from 658 in 1997 to 1 973 at the end of last year, boosting the total market value by almost seven fold to about $25 trillion.

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

Hong Kong is also a premier wealth and asset management hub. In 2015, the total asset value of the fund management business amounted to $17 trillion, which is four times of the amount recorded 10 years ago, and 70% of the funds came from non-local investors, which serves to prove that Hong Kong is an ideal asset management platform in the eyes of overseas investors. As for the insurance business, the total gross premium saw a two-fold increase to over $370 billion during the period from 2005 to 2015, and the insurance penetration of Hong Kong ranks first in Asia with a per capita premium of $49,000.

Hong Kong has also taken a leading position in Renminbi ("RMB") business and RMB investment and financing activities. According to the survey results on foreign exchange market turnover announced by the Bank for International Settlements last year, Hong Kong ranked top among offshore markets in terms of the volume of RMB foreign exchange transactions, and the daily average turnover of RMB foreign exchange transactions was US$77 billion. A number of RMB products are currently available in the Hong Kong market, and together with the arrangements to maintain the mutual access of Hong Kong and the Mainland capital markets, local and international investors can invest directly in Mainland funds and listed stocks without the need to apply for any quotas. This has also helped to provide a diversified choice of RMB investment products.

Given the sound basis of our financial industry, the Government will cooperate with regulatory bodies and trade members to proactively implement a number of measures to promote market development, with a view to enhancing Hong Kong's competitiveness as an international financial centre. However, it has also come to our attention that due to the uncertainties in the external economy and monetary environment, the financial market and capital flows may fluctuate from time to time. While promoting the development of the financial 3914 LEGISLATIVE COUNCIL ― 15 February 2017 industry, there is also a need for the Government to strive to ensure the orderly operation of the market.

As the country's foremost financial centre and investment and financing platform, Hong Kong should grasp the opportunities brought by the National 13th Five-year Plan and the Belt and Road Initiative, perform the role as an important bridge linking China and other Belt and Road economies, and support the further reform and opening up of the financial markets in the Mainland.

Since the establishment of the Infrastructure Financing Facilitation Office ("IFFO") by the Hong Kong Monetary Authority ("HKMA") in July last year, a total of over 60 Mainland, overseas and local organizations have so far joined IFFO as partners in facilitating infrastructure investments and their financing.

The Shenzhen-Hong Kong Stock Connect was launched in December last year, and together with the Shanghai-Hong Kong Stock Connect launched in 2014 and the Mainland-Hong Kong mutual recognition of funds arrangement implemented in 2015, RMB investment products available in Hong Kong have been further diversified, thus creating a favourable environment for promoting RMB internationalization and strengthening Hong Kong's status as the global offshore RMB business hub. We will make further enhancements to market infrastructures, strengthen the RMB business links with overseas markets and open up more channels for two-way cross-border RMB fund flows, so as to facilitate the activities of international investors who wish to invest more comprehensively in the Mainland markets via the Hong Kong market.

The Asian Infrastructure Investment Bank ("AIIB") has made a formal membership invitation to Hong Kong. While striving to complete expeditiously the relevant procedures of joining AIIB, we will also endeavour to set up an office of AIIB in Hong Kong, in order to render support to its work in various areas by making optimal use of the capital market of Hong Kong, our professional talents in asset management as well as the diversified financial products available here.

In order to strengthen Hong Kong's status as an asset management centre, we will continue to attract with different measures a greater number and variety of funds to base their business development in Hong Kong. For example, the Securities and Futures Commission ("SFC") entered into an agreement with the LEGISLATIVE COUNCIL ― 15 February 2017 3915

Swiss authorities in December last year, so that eligible public funds would be allowed to gain direct access to the investing public in the market of the other side through a streamlined process. SFC is now negotiating similar agreements with several other regulatory authorities in Europe, with a view to entering into similar agreements with them as early as possible. Besides, we are also working actively on the introduction of the open-ended fund company regime. These measures will help to enhance the competitive edge of the asset management industry in Hong Kong, diversify our fund domiciliation platform and expand the fund distribution network of our fund industry.

Personnel training is also one of the important factors affecting the sustainable development of the financial industry. In this connection, a three-year pilot programme was launched by phases in August last year to provide talent training for the insurance sector and the asset and wealth management sector. We hope that the initiatives rolled out under the programme would enable the community, particularly students, to have a better understanding of the nature and career prospects of different jobs in the two sectors; attract new entrants; and enhance the professionalism of existing practitioners.

The application of financial technology ("Fintech") is also a key element to enhance the competitiveness of the sector. We will further enhance the local Fintech ecology, build a pool of talent, and encourage financial institutions and start-ups to introduce more initiatives that would produce new experience in financial management and improve operational efficiency. Regarding payment services, HKMA has already granted a total of 13 Stored Value Facility licences, so as to offer more diversified choices to the public. Financial support will also be provided by the Government to the relevant sector, research institutes and regulatory authorities for undertaking research projects on cyber security and Blockchain technology, so as to establish Hong Kong as a hub for the application and setting of standards for cutting-edge Fintech.

Deputy President, in response to the views expressed by Members, I would like to make some elaboration on the policies adopted and the role played by the Government in promoting the development of the financial industry. Our work in promoting financial development can be classified into the following four major areas:

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Firstly, the promotion of market development through policy liaison. The financial industry is highly regulated industry, and thus any attempts to develop the financial market will inevitably involve regulatory regimes and regulations, and also close policy liaison between the Government and regulatory bodies. After communications with the relevant authorities and regulatory bodies in the Mainland, we managed to implement a number of new measures on market development in the past, such as the mutual access between the Mainland and Hong Kong stock markets, Mainland-Hong Kong mutual recognition of funds and the development of the offshore RMB market. Similarly, we have also played a leading role with regulatory bodies in developing overseas markets. A recent example I mentioned earlier is the agreement which SFC has entered into with the Swiss authorities on the sales arrangements of public funds.

Secondly, as I have just said, the financial industry is a highly regulated industry, and it would be necessary for our regulatory regimes to comply with the international regulatory standards and obtain recognition from other regulatory bodies and international organizations, otherwise we would not be able to maintain Hong Kong's status as an international financial centre. The Government and regulatory bodies should take up the role of exploring development directions that are conducive to the local financial market, while striving to comply with the international regulatory standards.

Thirdly, corresponding regulatory efforts will have to be made in response to market changes or the need to grasp new opportunities, so as to develop new financial services. Hence, much has been done in areas such as the formulation of policies on promoting private equity funds, exchange traded funds and open-ended fund company structure.

Fourthly, market promotion would be needed to keep international and Mainland investors informed of our competitive edge, and induce them to come and develop in Hong Kong.

In order to promote financial development, the Government, regulatory bodies and the sector itself have to play their respective roles and complement each other. As far as regulatory bodies are concerned, apart from discharging their regulatory functions, market development is also one of their major areas of work, and some examples to illustrate their active participation in market development are: the development of offshore RMB business, mutual recognition LEGISLATIVE COUNCIL ― 15 February 2017 3917 of funds, the establishment of IFFO, and so on. The Government plays the role of policy formulation, contacting other authorities at the government level, and coordinating the works of regulatory bodies. As for members of the sector, their views are very important because they have sound knowledge of the latest market trends, and will be able to offer valuable views in such areas as market opportunities and operations, thus ensuring the practicability of policies formulated. Hence, contributions from all of the three parties are indispensable for the development of financial industry, and the Government has to play a leading role.

The Hong Kong Financial Services Development Council ("FSDC") established by the current-term Government is a high-level, cross-sector advisory body which offers suggestions on how we should promote the development of our financial services industry.

FSDC comprises elite members of the sector, and through their interactions with the Government and regulatory bodies, they will proactively offer suggestions on financial development. This is a more efficient approach than what was adopted in the past, when proposals were put forward by individual members of the sector, who would then try to lobby the Government and regulatory bodies themselves. FSDC has also released a series of reports to illustrate the suggestions they have made, so as to provide a sound basis for the Government and regulatory bodies to follow up on the findings of its policy researches, and for members of the sector to follow up the Government's implementation of the relevant suggestions. This high-level advisory platform is highly transparent, and can expedite our discussions on financial policies for early implementation of feasible proposals.

The Government has all along engaged in positive interactions with regulatory bodies, FSDC and the entire sector. Regarding the reports prepared by FSDC, the Financial Services and the Treasury Bureau has all along participated in the relevant discussions, thus ensuring the policy basis of the reports released. With regard to the 26 reports listed in the Policy Address, I have to say that the Government has attached great importance to the suggestions offered by FSDC, and as the Secretary for Financial Services and the Treasury, I also have a very clear understanding of the contents of these reports. Some Members have raised the question of how the Government would follow up the suggestions contained in these reports, and I have checked the list of reports on 3918 LEGISLATIVE COUNCIL ― 15 February 2017 my computer screen just now and found that of the 26 reports released, 23 reports contain suggestions which dovetail with our policy directions. The Government has positively followed up the suggestions contained in these reports, and most of them have already been implemented.

Deputy President, the Government attaches very great importance to the views of FSDC and the sector, since many financial policies formulated in the past were results of the interactions among the three parties of the Government, regulatory bodies and the sector.

Apart from examining the development of local financial services industry, another function of FSDC is to assist in the promotion of our financial industry. With the assistance of its members from different fields of the sector, FSDC has maintained close liaison with organizations of the local financial sector, and is committed to promoting the financial services industry of Hong Kong in the Mainland and overseas through its participation in different activities like seminars and roadshows.

Although members of the sector have also been taking part in such promotion work, credibility could be enhanced if FSDC, as a high-level platform, could participate in the promotion on behalf of the sector. In this connection, FSDC has played an active part in activities such as seminars, roadshows and overseas visits, so as to maintain good communication with members of the relevant sectors overseas. It is specially stated in the 2017 Policy Address that the Government will continue to provide FSDC with the necessary resources, and fully support its work. Besides, the Government will also request the Hong Kong Trade Development Council ("TDC") to collaborate with FSDC, with a view to strengthening the promotion of our financial services industry through TDC's extensive network and resources in the Mainland and overseas and the participation of principal members of the sector.

Finally, let me say a few words about the issue of market quality. A robust regulatory regime is the competitive edge of Hong Kong as an international financial centre. Hence, we will keep a close watch on international and local development, and strive to enhance the quality of our financial market.

Several Members have expressed their views on the quality of the local securities market, and whether the existing listing platform and regulatory LEGISLATIVE COUNCIL ― 15 February 2017 3919 framework can keep abreast of the rapid development of the market. The Government welcomes the further development of the listing platform as it can enhance our competitiveness, but we have always been very concerned about market quality issues, and we support SFC's monitoring and law enforcement efforts in combating malpractices.

With regard to IPO placings in the Growth Enterprise Market, SFC has issued a set of guidelines on the expected standards of conduct of intermediaries, and a joint statement with the Hong Kong Exchanges and Clearing Limited ("HKEx") regarding the roles of applicants and intermediaries in January this year.

In addition, SFC and HKEx jointly conducted a consultation on proposed enhancements to the decision-making and governance structure for listing regulation last year. The consultation sought to enable the listing regulatory structure and procedures to better respond to rapid developments in the market. A large number of submissions have been received and SFC and HKEx are considering and analysing the views carefully.

With these remarks, Deputy President, I urge Members to support the Policy Address this year. Thank you.

DEPUTY PRESIDENT (in Cantonese): The first debate session ends.

DEPUTY PRESIDENT (in Cantonese): We now proceed to the second debate session. The debate themes are "Land, Housing, Transportation, Environment and Conservation".

This session covers the following seven policy areas: Housing; Development (planning, land and works); Building Safety; Transport; Economic Development (energy); Environmental Affairs; and Conservation.

Members who wish to speak in this session will please press the "Request to speak" button.

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MR STEVEN HO (in Cantonese): Deputy President, I wish to speak on the development and land policies in the Policy Address. Financial Secretary Paul CHAN just left. Actually, when he was Secretary for Development, I already reflected to him the many views in my present speech.

The Policy Address has devoted long treatment to housing development. As I understand it, the present-term SAR Government attaches a great deal of importance to the housing problem, and it always says that it is necessary to find land for housing construction purpose. Speaking of the land problem, the Government faces tremendous difficulty, in the sense that even if it identifies a suitable land, it faces resistance from various sides, including the fisheries and agriculture sector. Many fishermen and farmers are not totally against the Government's land development policy, only that they have strong views on how the Government deals with agricultural rehabilitation, adjusts the fisheries policy, offers compensation to them, and even assists them in resuming their business. Many ordinances have not been amended over all these years. In the past two or three years, some farmers approached me for assistance. Some said that they were forced to move out the same day they approached me, and some said that their landlords had increased their rents with effect from the following day. We have reflected such problems to the Secretary for Development, regardless of who he is, at various panel meetings and also on different occasions. So, I hope that apart from merely mentioning development problems in the Policy Address, the SAR Government can go further to tackle the hindrances to development, especially those long-standing problems.

Why are farmers so infuriated? The main reason is that when the Government proposes to develop certain places (such as the New Territories North, Hung Shui Kiu, Yuen Long South and Kam Tin South), it fails to put forth any official motions. And, in the absence of any funding approval from the Finance Committee, the compensation registration process cannot be commenced all along. Besides, despite a delay of several years, the Government has still failed to introduce many development initiatives into the Legislative Council. This has created much room for landlords to increase rents hysterically in the interim and even force farmers to move out, so as to avoid their refusal to return the lands or the necessity to conduct cumbersome procedures during the Government's resumption of the lands.

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I have heard of several usual means. The first means is rental increase, from $2,000 to $20,000. I have learnt that in one case, the rent was increased to $200,000. The second means is that when a tenancy agreement is about to expire, the landlord kindly offers to renew the tenancy, but he shortens the tenancy period to two months. I have learnt that in one case, the tenancy period was shortened to one month. Legally, a tenant must move out at the expiry of his tenancy. This will make it easier for the landlord to proceed with various matters during the Government's resumption of his land. When the Government proceeds with land resumption after obtaining the Finance Committee's funding approval, the "farmer" (actually the landlord) has already ceased farming on the land. But the landlord is given the agricultural rehabilitation right. Even if the agricultural rehabilitation scheme introduced by the Government is very satisfactory, the industry will still sustain huge impacts because the landlord no longer engages in farming on the land.

I hope that officials from the SAR Government (especially the new Secretary Eric MA) can squarely address this matter and refrain from telling me every time that it is under the charge of the Food and Health Bureau. I propose to set up an inter-departmental task force dedicated to dealing with issues relating to fishermen and farmers. This way, the problems can probably be dealt with more easily.

Second, farmers can be divided into various types. Just now, I talked about compensation and agricultural rehabilitation. I now want to discuss the relocation of livestock farms. Over all these years, I have discussed the relocation of chicken farms and pigsties with the Food and Health Bureau. But the Government has nonetheless refused to amend the relevant relocation guidelines or ordinances. As a result, they cannot relocate to somewhere else. I do not intend to hold thorough discussion on this matter here, and I will talk about it on another occasion. I will discuss it with Secretary Dr KO in the next debate session. I hope the Development Bureau will not put forth any excuse and say that the Development Bureau is only responsible for finding lands for housing construction purpose. Actually, this matter is rather a major reason for hindrance. So, I hope the Secretary for Development can give serious thoughts to the issue raised by me just now.

In fact, the fisheries and agriculture industries as primary industries do not solely engage in production. It is also necessary for them to connect to the market. Wholesale markets in the middle of the chain are likewise very 3922 LEGISLATIVE COUNCIL ― 15 February 2017 important. As we have always said, the Government wants to use the sites of the Cheung Sha Wan Temporary Wholesale Poultry Market, the Cheung Sha Wan Wholesale Vegetable Market and the Yuen Long Wholesale Freshwater Fish Market near Yoho Town to build housing. In that case, where can they offer their products for wholesale? Despite the passage of a long time, the Government has failed to undertake any land planning to deal with this matter all the same. There are historical reasons to explain why these wholesale markets are located in these places. These places were not quite so accessible years back. Later, the Government has undertaken development in the vicinity of these wholesale markets and wants to force them to move out. Shouldn't the Government find other sites for them to continue with their operation? I put forth this demand not only due to the wish of the relevant industries. Such facilities are necessary to the community. This matter is similar to the case of developing brownfields as the Government has so intended. The logistic and waste recovery plants on brownfields have much bearing on Hong Kong's economy and people's livelihood.

Here, I request the SAR Government again to give holistic consideration to the housing issue. And, the Government should offer reasonable compensation to other affected industries and make arrangements for their relocation and business resumption.

Deputy President, I so submit.

PROF JOSEPH LEE (in Cantonese): Deputy President, I intend to discuss the housing policy in this debate session. The emphasis of the Government's Policy Address this year is land planning and the availability of lands. But it does not say much on housing supply.

In order to address the problem of land supply, the authorities have sought not only to identify lands but also to "snatch" lands. According to the Long Term Housing Strategy announced several years ago, the production target for public rental housing ("PRH") in the 10-year period concerned should be 280 000 units. But given the present progress, at most 230 000 units can be built. This lags far behind the target, which is why we can observe a very tight supply of PRH units at present.

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Statistics recently announced by the Hong Kong Housing Authority ("HA") show, and the Secretary should also know, that the average waiting time for PRH is no longer 3 years at present. Rather, it is now 4.7 years. Many people are therefore waiting for PRH allocation. How are the living conditions of these people? They may be living in "space-capsule bedspaces", subdivided units and "cage homes", where living conditions are very poor. All these people have been waiting in vain for PRH allocation.

The Government has also failed to provide any rent allowance as we proposed earlier on, so all these people cannot receive any assistance. Besides, we have also proposed the implementation of rent control. We can all observe that the prices of private residential units have been soaring over the past few years. As a result, people who are waiting for PRH, or those who are not qualified for PRH application but have not saved enough money for home purchase, are forced to rent their homes. But while property prices are high, rents are equally exorbitant.

I can remember that when I raised the idea of rent control in 2010, the last-term Government dismissed it as impracticable, and the current-term Government also once thought so. But LEUNG Chun-ying later sounded slightly differently, saying that he would give the idea some thoughts. I really think that the Secretary must give some serious thoughts to the issue of rent control, though I know, of course, that only several months is left in his term of office and the matter may have to be passed to the next Government. If the Chief Executive really considers the introduction of rent control, many tenants currently battered by high rents will receive some help. These people may not be qualified for PRH allocation but have not yet saved enough money to buy their own homes. This problem must likewise be handled.

We naturally welcome the policy on well-off PRH tenants rolled out by HA yesterday, as it can enable us to tackle the problem of unqualified tenants occupying PRH units as early as possible. Since these people have the means to buy or rent properties in the private market, they should not occupy any PRH units. The policy can speed up the turnover of PRH units, and in addition, it can also ensure the proper use of public money. Therefore, the Policy Address aside, I also hope that the Secretary can provide resources in this area, or render some policy support, so as to help the people concerned.

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The last-term Government put forward the policy of revitalizing industrial buildings, so may I ask the Secretary if this policy is still in existence? We know that many empty industrial buildings and even vacant school premises are not used for any development purposes. Why doesn't the Secretary consider using those industrial buildings and school premises located in prime downtown sites for commercial and residential uses? Other Members likewise discussed this issue on different occasions in the past. But it looks like the Government simply does not think much of the feasibility of the proposed revitalization of industrial buildings and redevelopment of vacant government buildings. Instead, it has sought to "snatch" lands in other places, or even remote localities. This is a waste of the Government's own lands.

The problem of "snatching" lands reminds me of what I heard in a meal gathering earlier on: before the reunification, one major source of lands in Hong Kong was reclamation, but it looks like reclamation has simply stopped since the reunification. But I am of course aware that many controversies and even judicial review cases have arisen recently from the reclamation projects in Victoria Harbour. Actually, many of our nearby new towns were developed on reclaimed lands. But we now limit ourselves to brownfield sites and "land-snatching" in remote localities. Why does the Government seek to "snatch" the lands in country parks, rather than considering the option of reclamation? Under the present circumstances, can Hong Kong actually revert to reclamation as a source of lands?

Secretary, suppose we had started reclamation at suitable localities as early as 20 years ago, in 1997, there might have been a considerable supply of lands by now. It would not have been necessary for us to depend on the lands in the former Kai Tak Airport, and many disputes would have been avoided. This is one solution, and the next Government may need to give it some thoughts. In the course of releasing land resources, we must not lay our hands only on country parks and brownfield sites, because the development of brownfield sites involves the vested interests of many people and may easily lead to conflicts and disputes. This point must also be considered.

Finally, another way to release lands is the redevelopment of buildings constructed under the Civil Servants' Cooperative Building Society Scheme ("the Scheme"), a proposal I have raised many times. These buildings are all very old, with an age of at least 50 years. Many of them are not equipped with any lifts, so elderly people cannot live there. Some of them are even left vacant. LEGISLATIVE COUNCIL ― 15 February 2017 3925

Yes, the authorities has put forward a redevelopment plan for these buildings at the meetings of the Panel on Development. But the terms offered are far from attractive, and many such vacant buildings are thus left to stand in a state of disrepairs in downtown sites―these sites could not be called downtown in the past, I must say.

I hope that the Secretary can add vigour to this policy, so as to achieve a win-win situation of building redevelopment and releasing lands. I know very well that the land problem has caused quite a headache to the Secretary over the past five years. But I still hope that in the remaining months of his office, he can make some efforts to formulate appropriate land planning for Hong Kong, so that the tight housing supply can be eased, property prices stabilized and the waiting queue for PRH shortened. Thank you, Deputy President.

MR LEUNG CHE-CHEUNG (in Cantonese): Deputy President, the Policy Address this year will be the last in LEUNG Chun-ying's tenure. I consider its contents rich and substantial. It is a promising work report. I will give it the due recognition.

When compared with policies in other areas, the traffic and transport policies mentioned in the policy address are less voluminous than other polices, as they only comprised 18 paragraphs, but they illustrated an ambitious plan.

Everyone knows that Hong Kong is densely populated with limited land. Historically, development activities mainly focus in the urban areas. Commercial, industrial and financial activities are mainly concentrated in the urban areas of Hong Kong Island or Kowloon, thus the population will also concentrate in these places. In early 1970s', the Government commenced the development of new towns in the New Territories. This northward movement of the population towards the New Territories has resulted in a daily southward movement of the working population, as people have to go to work in the urban areas. This has caused a tremendous pressure on the traffic and transport system and attracted our long-standing concern about a major livelihood issue of the people, that is, the transportation issue.

A number of large-scaled public project are mentioned in the policy address which will tie in with the long-term development need of Hong Kong, such as Route 11, the Central Kowloon Route, the Hong Kong-Zhuhai-Macao 3926 LEGISLATIVE COUNCIL ― 15 February 2017

Bridge, the Tuen Mun-Chek Lap Kok Link, the Central-Wan Chai Bypass and Island Eastern Corridor Link, the Tseung Kwan O-Lam Tin Tunnel, the widening of Fanling Highway and the Hiram's Highway improvement works. Moreover, based on "Hong Kong 2030+", the Policy Address also takes forward the strategic studies on railways and major roads and depicts the development of railways, including the Hong Kong section of the Guangzhou-Shenzhen-Hong Kong Express Rail Link, the Northern Link, the Tuen Mun South Extension and the East Kowloon Line. All of these are the foundations of transportation infrastructure which are crucial to Hong Kong's development in the coming decades. However, a remote solution could never provide prompt remedy. The slow progress of infrastructure constructions in the past has already caused major difficulties for the general public when they are going to work or school. In particular, people living in the North West New Territories, Yuen Long and Tuen Mun feel like they are orphans. None of them is not grumbling and complaining about the problem. During peak hours, passengers taking the West Rail Line have to wait at least one or two trains before they can board the train. People taking the bus are facing the same problem, they have to wait for the next bus or two before they can get on the bus which still have some seats or space available. Yuen Long Main Road is so congested that even buses could not get inside the bus stop. The situation has reached the critical point of public dissatisfaction, but the Chief Executive has not proposed any measure to solve the problem. On the contrary, he plans to build more homes in Yuen Long and Tuen Mun for a massive population. May I ask how can District Councils ("DCs") and the public not oppose to the proposal?

The alleviation of traffic congestion and helping the public to solve the problem of boarding trains and buses are livelihood-related issues which should be addressed without delay. The one and only way to solve the problem within a short period of time is to increase the train cars of the West Rail and the Light Rail and the frequency of buses. However, it seems that both the Government and transport authorities have not come up with any measure. Perhaps there will be solutions several years later. At present, the increase of bus frequency at Tai Lam Tunnel Bus Interchange and Tuen Mun Road Bus Interchange is another solution to address the boarding problems of the public. The Government should also tackle the traffic congestion issue at Yuen Long Main Road by reducing the influx of vehicles other than buses as soon as possible, so that buses could get inside the bus stops smoothly. This is also an important way to address the traffic congestion issue within a short period of time. In the long LEGISLATIVE COUNCIL ― 15 February 2017 3927 run, the Government should study the construction of a railway connecting Tuen Mun and Tsuen Wan, so that Tuen Mun residents can travel to and from the downtown areas via Tsuen Wan after the South West link is established.

Deputy President, smooth traffic flow will facilitate economic development. Therefore, the Government should come up with a better measure as soon as possible in order to address the transportation problem of North West New Territories residents. The Government should respond to the public's aspirations and address the transport-related issues as soon as possible. In so doing, the Government may achieve effective administration and social harmony.

I so submit.

MR LAU KWOK-FAN (in Cantonese): Deputy President, this time around the Chief Executive has made substantial efforts in the Policy Address to address housing issues, which is something I agree with. If we look back at the decisions made by Donald TSANG who headed the previous term of Government on the supply of public rental housing ("PRH") or the cessation of the production of Home Ownership Scheme ("HOS") flats, they have caused far-reaching impacts on the property market or the waiting time for PRH flats. And the problem is not yet resolved even in today's market.

According to the information provided by the Housing Department, the waiting time for local residents to get a PRH flat has increased from three years in the past to more than four years at present. The Government of this term is trying hard to find the land for PRH and HOS construction. But as construction requires time to complete, we need at least 70 or 80 years to make up for the figures which lag behind irrespective of the planning or construction of homes. For that reason, I agree with what the incumbent Chief Executive, LEUNG Chun-ying, has said. That is, be it the next term of Government or the one after the next term of Government, they have to keep on working hard on solving the land issue. For that reason, I want to share some of my thoughts on the land use issue.

The Government of this term has been very hard-working in site searching, but there are constant opposing voices. However, the crux of the present issue is not always a question of technicality, but a question of perception. To be honest, the policy is too inflexible, therefore it is unable to address the aspirations 3928 LEGISLATIVE COUNCIL ― 15 February 2017 of the public and the society at large. The most prominent example is the policy concerning land resumption, compensation and rehousing.

Deputy President, besides reclamation, rezoning and developing new towns such as the development of North East New Territories, will provide large tracts of land for large-scale development. Land resumption and rezoning will inevitably affect the livelihood of people who have been living or doing business there. Demolition, rehousing and compensation are related to the lives and livelihood of the residents being affected, thus they have become the focus of controversy in land development disputes. The North East New Territories development, the future Hung Shui Kiu development, the South Yuen Long development and the North New Territories development will face the same controversy. The scope of land resumption at Choi Yuen Tsuen and Liantang/Heung Yuen Wai was not too big, but there were still twists and turns in the resumption process. After handling special cases with special methods, special arrangement had to be made one after another. After dealing with the issues with a host of special measures, an ultimate solution which was acceptable to all parties concerned was eventually worked out.

In the past, the compensation for land resumption in each case was processed according to the principle of "exceptional arrangement under extra-ordinary circumstances". As a result, the minimum threshold for the next land resumption will be based on the principle of "exceptional arrangement under extra-ordinary circumstances", and it has to be elevated incessantly. The current compensation and rehousing policy for land resumption is proven to be too inflexible, therefore special arrangement had to be made one after another. The Democratic Alliance for the Betterment and Progress of Hong Kong ("DAB") has been urging the Government to change the policy for some times. Nevertheless, over the past few years, government officials gave us the impression that there would be technical adjustment to existing policy, such as adjusting the amount of compensation or to adjust downward the length of residence of squatter residents and so on. They will only make "exceptional arrangement under extra-ordinary circumstances" at the most pressing moment. It is possibly due to the fact that the policy of lands and housing is not under the control of a single Policy Bureau, or due to the total inflexibility of the overall policy thinking. We are concerned that if the Government works according to the existing policy thinking when engaging in the land resumption of a much bigger area in future, it will end up running against a stone wall no matter the public officials are good fighters or not.

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Deputy President, today we are not proposing rehousing and compensation package for a certain development project. We hope this term or next term of Government will change the policy thinking when it deals with rehousing and compensation. Let me cite an example. Under the existing rehousing policy, the Government will assist residents in the allocation of PRH flats or the purchase of HOS flats in addition to making some compensation in cash. However, the PRH allocation procedure will subject to the assets or income test. If we look at those squatter residents, they have been living on the site for a long time, perhaps for decades or even two generations. They will, more or less, have some savings. Perhaps that will just exceed the assets or income test limit. In particular, the assets of the elderly people―the so-called "funeral savings"―that will be used unexpected events or funeral purpose. Even some residents have to receive the cash compensation as they are not eligible for PRH allocation, but the current $600,000 compensation is not necessary enough for the down payment of a flat even if they wish to purchase a flat. Albeit that is good enough for the down payment, these people will not necessary be able to afford to pay for the mortgage. In this case, they will end up not having anything at all.

We understand that the squatter policy was perhaps a stop-gap measure in the old days. These people do not necessary be owners of the land when they were permitted to reside there. The reason is that the site still belong to the Government. In the legal context, of course the Government has done nothing wrong. But in the sentiment context, these people have been residing there for many years, it is therefore unreasonable for the Government to develop new towns without a proper rehousing policy, thereby making some residents who have been residing in some squatters, homeless. It does not make any sense at all.

For that reason, I consider the Policy Bureau in charge of development should be endowed with the rehousing resources. At present, the Development Bureau is guiding the planning and development of lands, but to one's surprise, it has no power to allocate PRH resources when it comes to a development site of several hundred hectares. In fact, in the North East New Territories and Hung Shui Kiu projects, sites have already been reserved for rehousing the residents in-situ. But can the Administration think out of the box and make use of these sites for the construction of rehousing flats for affected residents?

3930 LEGISLATIVE COUNCIL ― 15 February 2017

If we look back at North East New Territories, we have been spending a long time to entangle ourselves in the issue concerning the rehousing of residents. That is because the policies of the Hong Kong Housing Authority concerning assets and income test are subject to a lot of limitations. As a result, the Government has to spend a lot of time to study that. Eventually, it has come up with a plan. That is, to use another organization, the Hong Kong Housing Society ("HKHS"), to deal with the issue. Therefore, HKHS has launched a programme recently, because HKHS can make some flexible arrangements in the context of assets and income test. Nevertheless, should the help of HKHS be sought on every occasion in future? Why can government departments not straighten out problems by themselves? Or can the Government make the Development Bureau a one-stop shop to deal with the development of lands and housing, so as to endow the Development Bureau with the power to allocate resources for the rehousing of residents under its purview of relevant development matters? This is far better than the existing practice of looking for some other organizations to help, and if the target body is unwilling to help, then the Government has to look for another body. This will help to solve a lot of intractable problems concerning rehousing, such as rehousing before clearance, in-situ rehousing, rehabilitation of agricultural land, and relocation of businesses operating on brownfield sites. This will help to broaden the room for discussion among all parties, and it will do all good but no harm to the controversy of the compensation for land resumption issues. I hope this term of Government will think over the proposal. It is because I think that may be a viable option for the development of land and housing projects in the course of developing new towns.

This term of Government has been quite aggressive in the supply of residential sites, but it is often criticized for "blindly usurping land". I do not agree with the allegation of "blindly usurping land", but the Government should not forget the original intention in the course of seeking land for housing construction just for the sake of meeting the target. The objective of seeking sites for housing construction is to provide an ideal abode for the public. And the fact that an ideal abode is something more than constructing a flat for them. An ideal abode for the public is something more than a shelter, as it should have a matching living environment, such as transport connectivity, community facilities, job opportunities and living space. In recent years, the Government has been actively going hither and thither to seek sites for housing. However, a lot of residents tell us that regardless of the transport network or community ancillary facilities, they have failed to catch up with the pace of home LEGISLATIVE COUNCIL ― 15 February 2017 3931 construction. Over the past few years, we in DAB have pointed out repeatedly about the capacity and overloading problems in the community, be it in New Territories East or New Territories West, the problems are very serious. Just now Mr LEUNG Che-cheung has elaborated on the matter.

In the past, large-scale land development projects of the Government are mainly focused on development of new towns. The Government should have done a better job in providing the ancillary facilities in these districts. Nevertheless, as this term of Government has to meet the pledges it has made, it has to concentrate on the development of, say, the 150 sites rezoned mainly for residential use are inside existing communities or on the fringe of some other communities. Besides residential use, almost no extra portions for other community uses are provided in these sites. Moreover, some of these sites rezoned are already within sites which are originally zoned for community uses. Therefore, the result of building homes will achieve a net increase in population but a zero or negative growth in ancillary facilities. Eventually, all the community facilities in all districts are outgrown by such developments, and local road system and external transport network are seriously overloaded. Let me use New Territories East that I know quite well as an example. Although there are several tunnels at New Territories East, such as the Lion Rock Tunnel, Tai Lam Tunnel or the Eagle's Nest Tunnel and so on, if we are to travel to and from work via these tunnels, we will incidentally meet the bottleneck and traffic jam somewhere at Tolo Highway, Sha Tin. Therefore, we have often heard that residents living in the New Territories will need to spend more than one hour travelling time for travelling to and from Hong Kong Island and Kowloon, and the situation will be worse if there are traffic jams.

There is only half a year left for the current term of Government, thus regardless of who will be elected as the Chief Executive of the next term of Government, I anticipate he or she will continue to implement the land or housing policy, continue with the land development work and increase the supply of homes. For that reason, I hope the Administration will keep on seeking sites for housing construction. At the same time, it should reserve some sites for community uses. It should also increase the existing traffic capacity. Moreover, it should also supply sites for industrial and commercial uses in order to create jobs for local communities and minimize the needs of residents to work across districts. Otherwise, the proposals to secure land supply will face resistance and objection when they are proposed in communities.

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Deputy President, although the chapter of development in this year's Policy Address is basically consisted of reviews and progress reports, a proposal of DAB or the Heung Yee Kuk is eventually included in it. That is, the Administration finally accepts the establishment of a conservation fund. Even though this term of Government can only establish a preparatory committee for it, we consider that a good start. We hope to raise two points concerning the ambit and resources of the conservation fund. First, the conservation of rural areas will always involve the conservation of some historical buildings. Let us take Lai Chi Wo as mentioned in the Policy Address as an example. Besides its great ecological value and natural scenery, Lai Chi Wo also has the Hakka "walled-village" culture as well as the building structures which are of conservation values. Another example of such value is the Hakka walled village in Tsung Pak Long. For that reason, when the Administration is studying the ambit of the conservation fund, it should also study whether or not the fund can tie in with the conservation works of the historical buildings. Should they be done separately or jointly? Which approach can maximize the effectiveness of conservation and make the best use of resources? I think the Government should think about it.

Second, at present, the conservation work of historical buildings is mainly supported by the Built Heritage Conservation Fund with an initial funding of $500 million, and this conservation fund can just manage to pay for the expenses of the Revitalising Historic Buildings Through Partnership Scheme and the Maintenance Scheme for historic buildings. It is frequently criticized for allocating too few resources for the cause. I consider that perhaps the conservation of an ecological and natural environment, when compared with the conservation of buildings, needs more resources. The resources allocated to the conservation are invariably crucial to the effectiveness of the conservation project. For that reason, the community at large has been calling for the establishment of the conservation fund for a long time and the public have very high hopes for the fund. We hope the package to be proposed by the preparatory committee will not be "all thunder and no rain".

Furthermore, besides direct subsidies, we believe the relaxation or upgrading of certain policies will actually help to achieve the goals of conservation and sustainable developments, as well as the promotion of green economy. The Government may help to develop some economic activities without spending a penny during the process. What I want to say is that I visited Kat O recently, and I found that certain rural family-run lodgings and leisure farms were being promoted at Lai Chi Wo. In fact, the Government's support in LEGISLATIVE COUNCIL ― 15 February 2017 3933 promoting rural land development and green economy is rather inadequate. The application formalities for operating family-run lodgings and leisure farms are very complicate as more than one single government department is involved. Such as the family-run lodgings I have mentioned earlier, the application may involve the Home Affairs Department ("HAD"), as HAD is the licensing authority. But if the lodgings provide cooking facilities, then they have to apply for a license from the Food and Health Bureau. All in all, many government departments are involved, but there are no specific licenses or guidelines. As a result, indigenous inhabitants who are locally born and bred cannot stay self-sustained by way of developing green economy on their own soils. Members should think about it. As Kat O that I have mentioned just now or other rural places, they are actually in remote districts that they are not easily accessible by public transport. What is the result? The result is that these residents have to leave their homeland and move away from these rural areas. Their farmlands are abandoned and they could only be used as brownfield sites. I believe that is not the result these residents want to see. For that reason, we are happy to see the establishment of a conservation fund in addition to the formulation of some Government policies which will remove barriers and lift restrictions, so that land owners of these rural lands may participate in the development of green economy. In so doing, we can conserve the environment on the one hand and become self-sustained on the other. I hope the Administration will work together with all stakeholders to conserve the natural ecological environment of these rural areas in order to achieve a three-win or all-win solution.

Deputy President, this is my speech on development. I so submit, thank you.

MR POON SIU-PING (in Cantonese): Deputy President, infrastructure works as part of urban planning are indispensible to social development. When talking about the direction for future development in this year's Policy Address, the Chief Executive LEUNG Chun-ying mentions the feasibility study of Route 11 in the light of the development in Northwest New Territories and on Lantau. Apart from this, he also talks about the commencement of the planning study, "Hong Kong 2030+: Towards a Planning Vision and Strategy Transcending 2030", the construction of the Central Kowloon Route, and the construction of other large-scale road projects, such as the Tuen Mun-Chek Lap Kok Link, at full swing.

3934 LEGISLATIVE COUNCIL ― 15 February 2017

I support the development of infrastructure in Hong Kong. The boom or bust of the construction industry is closely related to the infrastructure and public works projects launched by the Government. The average yearly unemployment rate of the construction industry stood at 3.9% in 2015 and rose to 5.4% in the first quarter of 2016, showing a great fluctuation in the demand for positions by the industry. Some workers told me that they were wary of the huge variation in the number of construction works projects and the subsequent fluctuation in incomes. Good salaries come along with an abundance of projects and poor salaries go with a lack of projects. People in the trade describe this as "either satiety or starvation".

I first joined the Legislative Council in 2012, during the peak of the Government's infrastructure investment, as it spent more than $70 billion public expenditure in public works a year. The construction industry was flourishing extremely well, with the total volume of construction works maintained at a $200 billion level. But the phenomenon was unhealthy. The cost of construction increased dramatically, the acute demand for construction workers was created artificially and the Government kept on exerting pressure on the labour sector for expansion of labour importation. I pointed out repeatedly at that time that as the construction industry was characterized by significant ebb and flow, the Government should use its public works projects to help regulate the swing. When the amount of private works projects rises, the Government should adjust the volume of public works projects appropriately to avoid a sudden surge in both the overall project level and in the resultant social costs. Similarly, when the quantity of private works project wanes, the Government should launch more public works projects to make up for the lows. A stable level of construction works project is in every way beneficial: to the healthy development of the industry, to the recruitment of workers, and to the livelihood security and physical health of the workers.

Regarding the next stage of development in infrastructure projects of Hong Kong, I sincerely hope that the Government can learn from past experience and avoid getting too aggressive. It is particularly so in terms of project planning, as work schedule should not be made too tight, the progress of works should be stable, persistent, with one part of the project transiting smoothly to another. In the Policy Address this year, cost control is highlighted in the public works project section. A most effective approach is to take forward public works projects steadily, persistently and coherently, avoid recommitting the mistake of launching polarized amounts of project at different development stages.

LEGISLATIVE COUNCIL ― 15 February 2017 3935

Deputy President, the healthy development of infrastructure in Hong Kong hinges on talent development and safe working environment. The construction industry remains a severely stricken area of industrial accidents. In 2015, a fatal industrial accident took place every two weeks and this is unacceptable. The Policy Address, however, has made no mention of industrial safety in the discussion of infrastructure development or in any other parts for that matter. There is no excuse for a city as affluent as Hong Kong to develop at the expense of the precious lives of the workers.

Deputy President, I so submit.

MR KENNETH LAU (in Cantonese): Deputy President, the last Policy Address delivered by the Chief Executive last month in his tenure is the longest one since the reunification with over 180 new measures. Regarded as the top priorities by the Chief Executive all along, the housing and land policies have been given the longest treatment and most comprehensive coverage. It can be seen from this that the current Government is still determined to resolve the housing problem for Hong Kong people in the mere remainder of its tenure through short-, medium- and long-term policies on housing and land planning.

As I can still remember, the Chief Executive said that the housing policy was a top priority in his administration when he won the election in 2012. He promised that he would stabilize property prices and ensure that general public housing applicants could receive public housing allocation in three years on average. He likewise assured us that some 75 000 public housing units would be built within the four years starting from 2012-2013. But now, as the Chief Executive's five-year tenure is drawing to an end, property prices still remain at a historically high level, with over 280 000 people on the waiting list for public housing and a waiting time of as long as four and a half years on average. The actual construction volume of public housing so far is merely 51 000 units.

Deputy President, even though the Chief Executive is unable to fulfil all his promises in this regard, I still believe the Chief Executive and his governing team have exerted their utmost to find lands for housing construction purpose, in an attempt to make up for the shortfall resulting from the inaction of the previous Government in creating land for housing construction purpose. According to the Chief Executive, the supply of first-hand private residential units in the next three or four years will be as much as 94 000 units, 45% higher than the figure at the 3936 LEGISLATIVE COUNCIL ― 15 February 2017 beginning of the current-term Government. The Government has likewise projected that around 94 500 public housing units will be built during the five years starting from 2016-2017. In my view, these achievements can only be realized with the efforts of the present Government over the past four years and should command our approval.

As a matter of fact, the housing problem has been perplexing Hong Kong people for many years. But when property prices have exceeded the affordable limits of ordinary people due to excessive demand; when basic living needs such as "having a roof over one's head" and acquiring a home have turned into an unreachable dream; when the housing problem has led to widespread grievances among grass-roots people waiting for public housing allocation and also an overwhelming majority of youngsters and triggered serious social conflicts and even dissension, I think any measures which are capable of alleviating the problem should be considered.

The crux of the housing policy is land supply. How should Hong Kong develop lands? Should we embark on massive development of brownfields? Should we develop our country parks? Or, should we undertake massive reclamation projects to create lands for housing construction purpose? Ten years before the reunification, the British Hong Kong administration accomplished its housing construction plans on the basis of demolishing and relocating villages, and this has affected our indigenous villagers. The concessions made by indigenous villagers and also the lands they sacrificed years back have enabled the comprehensive development of many new towns today. The idea of introducing an "adjustment mechanism" for country parks as put forth by the Chief Executive in the Policy Address this year deserves rational consideration and thorough examination among people in the community.

Country parks as "urban lungs" can add green to the environment and provide habitats for natural vegetation and living things. Country parks are a collective asset of Hong Kong people, and we should treasure the grass, the trees and the flowers therein. But is it really correct to say that the size and coverage of country parks must not be changed? Should we keep our country parks in the present state forever? Are country parks really so sacrosanct?

The Country Parks Ordinance was enacted in 1967. At present, the 24 country parks and 22 special areas account for over 40% of the total land area of Hong Kong, six times the total area of our residential land. In comparison, LEGISLATIVE COUNCIL ― 15 February 2017 3937 country parks in overseas places such as Taiwan and Japan merely account for 8.63% and 5.6% of their respective total land areas. I believe that globally, the greening level in Hong Kong is already above average.

(THE PRESIDENT resumed the Chair)

It has been 40 years since the enactment of the Country Parks Ordinance. With continued urban development, the delineation between rural areas and urban areas has turned increasingly blurred. In the past, country parks were not forbidden areas which were absolutely untouchable as such. Since 1992, the Government has re-delineated, or attempted to re-delineate, the boundaries of two country parks at least three times to achieve other uses. In 1995, the Government excised 2 hectares of land from the Tai Lam Country Park to develop an approach road for Route 3. At the same time, the Government incorporated two pieces of land with a total area of 42 hectares into the same country park. From this, we can see that the "adjustment mechanism" for country parks should undergo a timely review and appropriate adjustments owing to the changing environment, community development and people's living needs. We should refrain from blindly freezing our green areas.

The Policy Address proposes to use part of the lands on the peripheries of country parks with a relatively low ecological value and public utilization rate for the purpose of developing public housing or residential care homes for the elderly. This commands my approval, and I also hope that the broad masses (especially environmentalists) can give rational consideration to the idea. How can Members possibly bear the sight of people paying higher rents for smaller homes and also dwelling in "sub-divided units" or "coffin flats" every day? If people do not have a home, how can they possibly have the mood and interest to discuss greening or conservation with us?

President, young people want to found their families, and new arrivals want to live and work in contentment. The task of finding lands for housing construction purpose absolutely brooks no delay. For example, developing country parks on an appropriate scale can offer homes to tens of thousands of low-income families while also enabling elderly people to receive proper care. The use of land this way is certainly more fruitful and is able to resolve the housing problem of Hong Kong people. This is a feasible way to foster the 3938 LEGISLATIVE COUNCIL ― 15 February 2017 well-being of our next generation, and it is worthwhile for the next Government to sustain and implement this policy. I hope that the present Government can expeditiously set up a multifaceted platform for comprehensively reviewing the ecological values and uses of the lands in the peripheries of country parks. After all, environmentalism and development should never be adversary to each other.

President, I also wish to discuss the conservation fund and the policy on non-in-situ land exchange. As proposed by the Policy Address, "the Government will establish a preparatory committee to study the ambit and modus operandi of a conservation fund, as well as the legislation and resources required for setting up such a fund. In the process, we will take into account relevant experience in and outside Hong Kong". The aim is to promote the revitalization of remote rural areas.

In fact, the Heung Yee Kuk New Territories and over 10 green groups have been championing the setting up of a conservation fund since as early as 2006. And in recently years, we have raised this demand with the Administration many times. An overview of the United States, Japan, South Korea, Singapore and Taiwan shows that these places already began to enforce their respective National Parks Acts and Natural Parks Acts long ago or have set up relevant conservation funds as support for their Governments' implementation of conservation policies, investment in the natural environment and compensation, with a view to sustaining the dynamic balance in their ecological systems. Hong Kong lags behind these overseas places in this area of policy development. But it is better late than never.

The proposal on the "exchange for the private land with high ecological significance at Sha Lo Tung by offering the rehabilitated Shuen Wan Landfill in Tai Po" is also a major policy breakthrough. In the past, the Government already resorted to non-in-situ exchange as a means of conserving the historical complex of King Yin Lei in the Mid-Levels on Hong Kong Island. The exchange for land this time around, if successful, will be the very first time to conserve a natural site with a high ecological value. President, I believe the Government's flexible use of the conservation fund and also the land-for-land policy can help to resolve the compensation problems involving enclaves.

In recent years, the Government proposed to incorporate 54 privately-owned enclaves into country parks. Up to late last year, six enclaves were already incorporated into country parks. So doing has in effect frozen our LEGISLATIVE COUNCIL ― 15 February 2017 3939 village lands and directly affected the uses and values of such lands, while also compromising the reasonable rights and interests of land owners. We must realize that environmental conservation is a collective responsibility of the Government, all people in Hong Kong and even the community at large, including you and me. We must not give empty talks about conservation and actually compromise the interests of indigenous residents or villagers by freezing or taking away their land assets. In my view, it is unreasonable to conserve the environment this way and refuse to offer a single cent of reasonable compensation.

President, I hope that in its preparation for setting up the conservation fund, the Government can take on board the views of relevant stakeholders. This can help to resolve the conflicts and problems with indigenous villagers' ownership arising from enclave conservation. Conservation does not mean non-development, and development is not a "cancerous thought" as such. The key is to strike an appropriate balance between the two values of conservation and development.

President, I so submit.

MR KENNETH LEUNG (in Cantonese): President, I wish to discuss the environmental and energy policy.

The first point I want to talk about is green buildings. Paragraph 118 of the Policy Address discusses the policy on "Promoting Green Buildings". At present, a private housing development project is required to register under Building Environmental Assessment Method Plus ("BEAM Plus") as a prerequisite for application for gross floor area concession. Under BEAM Plus, ratings will be accorded to a building's performance in categories such as "materials aspects", "energy use", "water use" and "indoor environmental quality". Under the current policy, a building will be given a maximum gross floor area concession as long as it is registered under BEAM Plus, regardless of the ratings it receives. I welcome a proposal in the Policy Address, the proposal of conducting a government review of the existing BEAM Plus arrangement. I hope the Government can determine and approve maximum gross floor area concessions based on BEAM Plus ratings.

3940 LEGISLATIVE COUNCIL ― 15 February 2017

Buildings constitute around 90% of Hong Kong's total power consumption. Apart from offering incentives to promote green buildings in the private market, the Government should also consider the tightening of the energy efficiency standards under the Buildings Energy Efficiency Ordinance, while also requiring that building installations in newly constructed and also existing buildings must attain an energy efficiency level higher than the existing one when major retrofitting works are carried out. Besides, the Government should also shorten the energy audit cycle of once every 10 years for commercial buildings and even require the conduct of carbon audits along with energy audits. After obtaining the relevant data, building owners and management companies can then take appropriate steps to reduce carbon emission.

President, apart from green buildings, another hot topic is climate change and energy. Speaking of climate change, paragraph 132 of the Policy Address lays down a carbon intensity target for Hong Kong in 2030, the target of reducing carbon intensity by 65% to 70% from the level in 2005. While the Government has put forth a new target on carbon intensity reduction, we still fail to see any concrete proposals to deal with the questions of how to reduce carbon intensity, what approach is to be adopted, and whether buildings or management companies will be allowed to increase the use of renewable energy.

In 2013, the Central Policy Unit commissioned The Hong Kong Polytechnic University to conduct a study on power generation from solar energy in Hong Kong. The study outcome is that if the rooftops of all buildings in Hong Kong can be used effectively to install solar panels for power generation from solar energy, solar-generated electricity can take up around 10% of Hong Kong's power generation in the long run. The study finds that Hong Kong's potential of using renewable energy for power generation is definitely not small. But according to the Hong Kong's Climate Action Plan 2030+ announced by the Environment Bureau early this year, the SAR Government has about 3% to 4% of realizable renewable energy potential. Can this target be updated from time to time? Besides, can the authorities practically consider the idea of raising this target if there are concrete actions?

Speaking of renewable energy installations, the Policy Address states that the Government has earmarked $200 million for the provision of renewable energy installations in government buildings and venues, as well as community facilities. But the places involved are limited. The Government must further consider the idea of renewing the renewable energy installations in residential, LEGISLATIVE COUNCIL ― 15 February 2017 3941 industrial and commercial buildings. Most importantly, the Government must set a feed-in tariff for renewable energy and require the two power companies to purchase community-generated electricity at a certain price. Only the setting of a feed-in tariff as a form of guarantee can encourage people and small power companies to install renewable energy systems.

The energy policy is an important part of our efforts to cope with climate change. The Government must grasp the opportunity of renewing the respective Scheme of Control Agreements with the two power companies in the future and include certain elements (such as feed-in tariffs, energy conservation and energy efficiency targets) in such agreements. It should also require the two power companies to develop energy efficiency systems for commercial and residential users. The Government may consider the example of Seoul and offer subsides for the installation of solar panels on housing estates, while also issuing green bonds to raise funds for Hong Kong's development of renewable energy installations, so as to enable Hong Kong people to participate in the development of renewable energy.

President, let me spend a couple of minutes to discuss another area in environmental conservation: air quality. As pointed out by the Government in the section entitled "Air Quality" in the Policy Address, the concentrations of roadside nitrogen dioxide, fine suspended particulates (PM 2.5) and respirable suspended particulates (PM 10) have dropped over the past few years. It looks like the Government is already complacent about this. But in my view, the Government should make more efforts because the concentrations of these three pollutants are still below the safety standards set out in the guideline of the World Health Organization. The concentration of roadside nitrogen dioxide in these three pollutants has still failed to reach the present Air Quality Objectives in Hong Kong. This means to say that even if the concentrations of these pollutants have dropped, air pollution remains serious in Hong Kong all the same. I hope the Government can step up its efforts.

The Policy Address has also failed to mention the increase of ozone concentration. During the period from 2011 to 2015, general stations and roadside stations respectively recorded a 10% and 46% increase of ozone concentration. As a primary component of photochemical smog, ozone is a result of photochemical interaction between sunlight and other pollutants (such as nitrogen oxide). When inhaled, it may increase humans' chance of contracting 3942 LEGISLATIVE COUNCIL ― 15 February 2017 respiratory illnesses. Ozone is certainly a major air pollutant in the Pearl River Delta ("PRD") Region. What measures have been taken by Hong Kong, Macao and the Guangdong Provincial authorities over the past three years to jointly curb the rise of ozone concentration in the PRD Region? I hope the Secretary can give a reply later on. At present, Hong Kong and the PRD Region have not laid down any target on reducing ozone and fine suspended particulates. This shows that their determination to alleviate air pollution is actually haphazard.

Another problem with the Policy Address this year is that it has failed to mention the promotion of electric vehicles. Vehicular emission is actually a major source of roadside air pollution. I hope the Secretary can give a reply on the Government's stance on electric vehicles later on.

President, I so submit.

MR ANDREW WAN (in Cantonese): President, only four months are left for this term of office of Chief Executive LEUNG Chun-ying. As I said in the first debate session, this is the swansong Policy Address of LEUNG Chun-ying as the Chief Executive, which may be the only thing that the Hong Kong people feel grateful about.

In my opinion, one of the things worth reviewing in this debate is the summary of his performance in housing and land policies during the past five years, which can serve as a warning to the next Government so that it can avoid the deficiencies and mistakes of the past LEUNG Chun-ying Government. Hence, President, this is why the Democratic Party cannot support the Motion of Thanks.

This swansong Policy Address is a very bad address which is full of broken promises and is taking credit of other people. There are many broken promises and one of the hard hit areas is housing and land. In regard to the housing policy platform of LEUNG Chun-ying or his housing policies in the past, I recall that when he ran the election in 2012, there was such a paragraph in his policy platform on land planning: "We will study the introduction of a 'Hong Kong property for Hong Kong residents' policy to assist those home buyers whose income exceed the limits prescribed by the Home Ownership Scheme. Under the proposed policy, new sites will be selected which are suitable for middle-class housing and in the relevant land lease a restriction will be included to the effect LEGISLATIVE COUNCIL ― 15 February 2017 3943 that the completed housing units can only be sold to Hong Kong residents." After LEUNG Chun-ying has assumed office, he earmarked two sites in Kai Tak for the construction of "Hong Kong property for Hong Kong residents". However, as we notice, this is a completely different story from his undertaking. When the housing units were first for sale in early 2017, the price was as exorbitant as $18,000 per sq ft, which is far beyond what the general Hong Kong people can afford.

In fact, concerning "Hong Kong property for Hong Kong residents", a remark from the developer can summarize the truth of the whole thing. According to the developer, the Chief Executive has not clearly stated that the housing units can be sold to Hong Kong buyers at reasonable prices. In other words, this so-called "Hong Kong property for Hong Kong residents" measure from the LEUNG Chun-ying Government performs practically no function and is useless. Perhaps LEUNG Chun-ying is copying Mr TUNG, the Chief Executive before his predecessor, who said that a policy did not exist if it was not mentioned anymore. After selecting these two pieces of land, LEUNG Chun-ying has taken his carefree work as realizing his undertaking. Since then, it seems that "Hong Kong property for Hong Kong residents" has never been discussed as a topic in social policies of Hong Kong or has been mentioned by the Government.

Besides, the LEUNG Chun-ying Government always emphasized the effectiveness of his stamp duty measures in curbing property prices, but we are all very clear about the effectiveness of his stamp duty measures. During the other meetings of the Legislative Council, the Secretary also mentioned earlier that the effectiveness of the measure seemed to be not very conspicuous. We of course know that this is due to a basket of other reasons. However, it is very obvious that when the Government or the LEUNG Chun-ying Government is boasting that the drastic measures can curb property prices or can even achieve immediate effect, the market prices actually tell us that even an immediate effect cannot be seen.

President, after all, the housing and land problems of Hong Kong are attributed to uneven, unfair and unreasonable distribution. After learning that the Government has to develop the land in Northeast New Territories, the public, for the sake of fairness, asked to also recover the 180 hectares of land nearby which is now being used by the Hong Kong Golf Club for development, with a view to resolving the housing and land problems of Hong Kong. The Government, however, just turned a deaf ear to this request. When the public 3944 LEGISLATIVE COUNCIL ― 15 February 2017 asked the Government to recover the land at Wang Chau in Yuen Long in one go, the Government remarked that it needed time to deal with brownfield sites and a few stages would be involved. During that time, the Wang Chau scandal broke out. Of course, the scandal has not been clarified hitherto. Nevertheless, the information that we can see at this moment is still quite confusing, and we are still highly sceptical whether "government-business-landlord-triad collusion" is involved.

Every time, LEUNG Chun-ying would say that he has to consider overall interests. After all, the overall interests are the interests of the developers or the rich and influential people of the rural areas. In the end, the public are those who cannot be allocated with any land and housing resources. I believe that apart from the rich and influential people as well as the consortia, not a single person in Hong Kong will agree with this administrative direction or this way of allocating land and housing resources, as this is too biased, too unfair and self-contradictory.

President, I believe that when Mr LEUNG leaves his office four months later, history will mark some of his records during his service. These will include the record high of over 280 000 households applying for public housing, the average waiting time being lengthened from over three years to the present 4.7 years, and to five years very soon. If I recall correctly, only 4.3 years were needed in the last quarter. In just a few months, the average waiting time has lengthened. I am very sure that the average waiting time will be over five years very soon. We have to remember that these figures are being manipulated, with the number of applications from singletons and the like being taken out.

At the same time, we notice that the Government is very strange, as it seems to have two brains. When the public are in dire straits and are still waiting for public housing, we see that the Government has stopped giving out one-off living subsidy for low-income households not living in public housing and not receiving CSSA. When we ask the Government to put in place rent control mechanism, it says that this cannot possibly be done. The Government has undertaken that the applicants can be allocated with public rental housing ("PRH") units after waiting for three years, but this can still not be fulfilled to date. Can housing subsidies be provided in the interim? The answer is in the negative. What is in the mind of the Government? How can it meet the needs of these people in terms of livelihood and housing?

LEGISLATIVE COUNCIL ― 15 February 2017 3945

President, the Transport and Housing Bureau published a Long Term Housing Strategy ("LTHS") earlier. In fact, I have commended the Secretary on other meetings, as he is a scholar and the LTHS is a good tool and indicator without which, we can never gauge whether we can meet the target. However, it is unfortunate that facing the genuine needs of the public, this LTHS shows that we are really lagging far behind. In accordance with the latest estimation, since 2017-2018, the housing supply target will be maintained at 460 000 units for the coming 10-year period, with 280 000 public housing units and 180 000 private housing units, which are similar to the projected numbers last year. Nonetheless, as highlighted in the report, it is envisaged that only 236 000 public housing units will actually be produced in the coming 10 years, with a shortage of some 44 000 units. In other words, even in the stage of planning, the Government knows in advance that it will not meet the target. I of course know that this is a complication question. As I mentioned earlier on, there are actually some land sites which can certainly not be touched. But how are the authorities going to account to the public? Why are there some land sites of the rich and powerful which cannot be considered by the authorities? Why would there be such a serious social scandal or so much controversy over the land at Wang Chau? What accounts for this situation?

Besides, when LEUNG Chun-ying came to the Legislative Council last time, he mentioned that the present housing supply has increased a lot, meaning that he does not deserve so much criticism from us. I am sorry but I have to ask LEUNG Chun-ying not to take advantage of other people. The newly built housing actually started construction four to five years ago. They are under the public housing projects commenced well before LEUNG Chun-ying assumed office, and thus the housing units produced should obviously not be taken as his own achievement. If he is to give us an account, he has to give a comprehensive one, including his own results during his period of service. But according to the LTHS mentioned earlier, it is envisaged that the target will not be met in the coming 10-year period.

There is something which we find even more funny or weird. When a Chief Executive candidate mentioned lately his future housing development direction of 60% being public housing units and 40% being private housing units, our Chief Executive LEUNG Chun-ying suddenly remarked out of unknown reason, or due to amnesia perhaps, that this 6:4 ratio could not be achieved, and it sounded like that candidate was deceiving the public. But I am really at a loss. Is the 6:4 ratio in the LTHS that we have been listening from the Government for 3946 LEGISLATIVE COUNCIL ― 15 February 2017 the past few years, since 2013, genuinely achievable? Are we only making a wild goose chase as this is in fact not achievable? Has the Government been lying for all these years? This is so weird that I still cannot figure it out to date. What is in the mind of our Chief Executive and what is he doing?

Apart from public housing market, President, I notice that the private housing market has also been seriously distorted in recent years. We see the emergence of a lot of so-called "subdivided units" and "nano units" with an area of only 120 sq ft per unit in the housing market. Another more terrible phenomenon is the exorbitant prices per flat and per square foot that I mentioned earlier. During the period of service of LEUNG Chun-ying, the property prices repeatedly broke records. There is currently a common refrain among the successful home buyers that "the hard work of father is needed for being successful to buy a flat", for they need their parents' money to pay the down payment of the property. This is in fact an elegy of the general public which tells that one needs his parents' many years of hard-earned savings to cover the down payment of his first flat, and he will then need to shoulder such a huge financial burden of paying home mortgage without any idea how many years he will need to pay off the mortgage. This trend is similar to the situation in Japan where it would take three generations to pay off a home mortgage in the past. It is not my wish to see Hong Kong people experiencing such a situation.

Although the Government has control on land supply, it has no means to control the supply of private housing units. Concerning when a private property will be for sale, the prices per flat and per square foot, and the like, the Government euphemistically remarks that these are all market-led, but in fact has no alternatives to exert influence. Hence, the Democratic Party has long been advocating Government-led housing supply, raising the ratio of land supply for public housing, including PRH and Home Ownership Scheme housing units, in newly planned development zones, with a view to assisting the public in real need to get a place to live. This will be different from LEUNG Chun-ying who, when assuming office, just took his casual words of "Hong Kong property for Hong Kong residents" as fulfilling his undertaking.

President, I also notice that the Housing Department and the Hong Kong Housing Authority have recently introduced a new "well-off tenants policy" which sounds reasonable. It is a matter of course that those who unreasonably occupy public housing resources have to move out of the flats as soon as possible. However, I have to remind Members that there is at present no revolving door LEGISLATIVE COUNCIL ― 15 February 2017 3947 from the Government for these people, whose living has been slightly improved, to be able to afford a home in private market. An actual example is that considering the asset limits set by the authorities, these so-called new well-off tenants can actually not afford to purchase the cheapest unit of King Tai Court under the Green Form Subsidised Home Ownership Pilot Scheme. Hence, how can their living needs be met? In my opinion, these policies only serve as a smokescreen or are looking for a scapegoat. We surely know that unreasonably occupying public housing resources is wrong, but are these people truly unreasonably occupying public housing? In a distorted and crazy market, how can they meet their housing needs? In a private market, how can they purchase property?

President, I think the housing polices as a whole is a mess, which is different from what LEUNG Chun-ying said. He remarked that he has done very well and has implemented all his initiatives. In fact, there is no reason that he could take the public housing units already constructed as his own achievement.

President, I so submit.

MR WILSON OR (in Cantonese): President, I am going to discuss policy areas on land, housing and transportation today.

President, housing is a priority of the current-term Government in policy implementation. For almost five years in the past, the entire government, including the Chief Executive and the various civil servant teams in government departments, has been making its best endeavours to expedite and increase housing supply. I think the entire government should be given due recognition for making strenuous efforts and endeavours to rise to challenges. To sum up its work done in the past five years, however, its performance in housing is quite disappointing as the tremendous efforts made were barely fruitful. People just cannot help worrying about future housing supply.

Undeniably, in comparison with the previous-term Government, there is obvious growth in both public and private housing supply within the term of the current Government. However, in contrast to the supply target set by the current-term Government itself (i.e. the target of providing to a total of 470 000 units in the coming 10 years mentioned in the 2014 Policy Address), both the 3948 LEGISLATIVE COUNCIL ― 15 February 2017 public and private housing supply had fallen short of the target. Take for instance the public housing supply, only 68 900 public housing units were provided in the five-year period starting from 2012-2013 to 2016-2017, covering almost the entire term of the current-term Government, meaning only 13 780 units were provided each year. Is it not appalling to learn that such a number has fallen short of more than half of the average of 28 200 units per annum mentioned in the 2014 Policy Address as well as the previous-term Government's target of 15 000 new public housing units built each year?

President, in spite of our disappointment, we still have to face the past. Now, we can only expect that the next-term Government will keep on rising to the challenges and endearvouring to speed up the progress in the coming few years, with a view to its delivering the Long Term Housing Strategy ("LTHS") target set in 2014. One thing still worries me, that is, all relevant figures on estimates tell us that delivering the LTHS target announced in December 2014 is utterly impossible. First, the progress in the construction of public housing has lagged far behind the target. The actual total public housing production during 2015-2016 is 14 264 flats while that of the coming five-year period is 91 800. Adding up both, the total public housing production for these six years amounted to 106 000 units, representing only 36.5% of the production of that year, although the production amount of another four years has yet to be included. I believe, given the maximum amount of public housing supply for a single year is only 25 000 units, it is hardly possible to provide 190 000 public housing units in the remaining four years.

Second, there is an acute shortage of land supply for construction of public housing. In launching the public consultation on LTHS in September 2013, the authorities told in advance the insufficient land supply right at the very beginning. By the end of 2014 after LTHS was announced, there still lacked sites for the construction of some 30 000 units and in 2015, sites for the construction of 25 000 units were needed, but the gap widened gap last year because we were short of sites for the construction of 44 000 units. The saying goes, "You cannot get blood out of a stone." Without land supply, housing construction is altogether not possible. According to my rough calculation, it takes 60 months or 5 years for the Hong Kong Housing Authority's housing project to complete, including the time required for land resumption. Therefore, if the Government fails to secure sufficient land for housing construction by the time the LTHS annual progress report for this year and that for next year are announced, I will deem the LTHS target a total fiasco.

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President, I think our expecting the current-term Government to make the impossible possible within their remaining term of office of less than half a year is only a pipe dream. Thus, the pile of figures which I have mentioned just now purely serve as a concluding summary. As regards how to make the impossible possible, I had better leave it for those Chief Executive hopefuls to give us their answers. Instead, I do hope that the incumbent Secretary for Transport and Housing cum Chairman of the Hong Kong Housing Authority ("HA") can properly deal with the three things as follows.

First, conduct a comprehensive consultation on the new "Well-off Tenants Policies"; second, launch afresh the Tenants Purchase Scheme ("TPS") (i.e. sale of public rental housing units); and third, refine the formula for the projection of public housing supply under LTHS to peg the housing supply with the target of maintaining the average waiting time for general PRH applicants at around three years ("the three-year target").

President, given the tight supply in public housing for the time being, the waiting list for public rental housing is exceptionally long. We learned from the news a couple of days ago that the three-year target has now become 4.7 years. We totally understand the authorities have to consider different aspects so as to come up with the solutions, but I want to stress that even so, they cannot press ahead lightly with any initiative. The new Well-off Tenants Policies is an example of such.

Why do I think so? Well, under the existing Well-off Tenants Policies, only those households paying double rent are required to declare their assets. According to the informal statistics compiled by myself, specifically speaking, around 3 100 households are required to declare their assets. Nevertheless, under the new system, all households having lived in public rental housing units ("PRH") for 10 years, excluding the elderly households and CSSA households, are required to declare their assets. I do not have any substantive figures at hand, but since there are over 600 000 PRH units in PRH estates aged 11 or above, I am quite sure that, roughly speaking, hundreds of thousands of households will be required to declare their assets.

Besides, declaration of income is very much different from declaration of assets. At present, many of PRH households have income from only one or two sources, most of which are supported by relevant information furnished by employers or the information of their mandatory provident fund contributions. 3950 LEGISLATIVE COUNCIL ― 15 February 2017

Thus I think such a requirement of declaration is acceptable. However, for declaration of assets, the scope is very broad, covering both substantial items like real estate properties, pensions, insurance statements) and taxi licences as well as other items like cash, insurance policies and jewellery. Literally, almost every item needs to be declared and necessarily at discounted present value of the day of declaration.

Reckoning that a lot of household will be affected by the much complicated declaration procedures, I am certain such new initiative will meant to be a big nuisance to the public. This, apart from leading to the increase in administrative cost, is not likely to bring any fruits. No one knows how many more units can be recovered in contrast to that under the existing policies. And in fact, no one can tell when the answer will finally come into light. Under the current policies, some 200 such units can be recovered per annum, but even if the number of units can be recovered under the new initiative is doubled―say, 400 units―the actual amount still remains unknown. Yet, the nuisance to tens of thousands of households will be the price that we have to pay. Will the results be in a proper proportion to the degree of nuisance thus caused? Should the authorities opt for "taking a spear to kill a fly" at all costs, I suggest that they had better set up more special duty teams to tackle PRH tenancy abuse. Therefore, I hope the Government will conduct a comprehensive consultation before making changes to the Well-off Tenants Policies.

President, another point I would like to talk about is the sale of PRH units. For several consecutive years, the Democratic Alliance for the Betterment and Progress of Hong Kong ("DAB") has been requesting the Government to launch afresh TPS, that is the sale of PRH units, and this time is no exception. Of course, the Secretary may perhaps provide one more reason in addition to those previously given, saying that since the current-term Government has become a guardian government, no one knows whether the Secretary himself will continue to engage in government affairs. A remark like this one will be more frequently heard this year, I think it wrong to say that introducing substantial changes to the existing housing policy is not an appropriate thing to do. The truth is, in "settling the bill", this year's Policy Address has put forward various significant initiatives, such as the initiative of relaunching TPS which I find feasible. Moreover, the previous-term Government had also announced that TPS would be launched afresh in its Policy Address, and so neither the length of term nor whether the policy is new will not be an issue. Whether the Government has the support of public opinion is what really matters.

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On second thought, in the light of the fact that those new PRH tenants being allocated units in TPS estates at present are still entitled to a special credit for purchasing their housing units in the first two years upon commencement of their tenancy agreements, the Government may consider expanding the offer of special credit to benefit all households to the same effect as that of relaunching TPS. I want to emphasize that those PRH tenants whom we came into contact at district level do have a clear stance regarding the relaunching of TPS: they wish to improve their living through purchasing their own units. The Government speaks so often the various management as well as maintenance problems involved in relaunching TPS, but I want to stress that solutions always outnumber problems. I hope the Secretary will carefully reconsider my suggestion.

Yet, even if the Secretary insists that he will not consider relaunching TPS during his term of office on account of the short duration of the remaining term of service, I still hope he will further explore the feasibility of increasing the supply of housing units under the Green Form Subsidised Home Ownership Pilot Scheme ("GSH"). Earlier on, King Tai Court in San Po Kong, the first GSH, was launched for sale which was much welcomed by the public. HA received more than 16 000 applications and the project was oversubscribed by 18 times. The number of applications was three times higher than that of the green form applications for flats under Home Ownership Scheme ("HOS") in the same period. Again, such figures illustrate PRH tenants' demand of improving their living environment while reflecting also the fact that as private properties prices go up, HOS flats sold at a discount to market prices, namely prices set at 70% of the market prices, are still unaffordable by many PRH tenants even with a discount. Thus, I hope the Government will, while relaunching TPS on the one hand, further consider DAB's suggestion of officially making GSH a permanent scheme to launch sales of GSH flats on a regular basis, so that PRH tenants' dream of purchasing their own homes will come true and they can then improve their living then.

President, the Secretary for Transport and Housing will release an annual report on the work of LTHS at the end of each year since the publication of LTHS. This year's annual report may be announced by another Bureau Secretary at the year-end, I still hope that Secretary CHEUNG can adjust the formula for the projection of public housing supply under LTHS and peg the target of maintaining the average waiting time for general PRH applicants at around three years with the calculation on public housing supply. DAB had voiced our such a demand on various occasions as well as in the motions of 3952 LEGISLATIVE COUNCIL ― 15 February 2017 thanks in the past. As to the specific operation involved, the Secretary should also be mindful of the ongoing relevant projections conducted internally, only that the figures were never made public. Regarding the Director of Audit's report of 2014, I am not going to repeat its contents. Here, we hope the Administration can consider this suggestion from another angle.

As LTHS has been published for many years, the community probably know that the public housing supply target for the coming ten-year period is around 280 000 to 290 000 units. For the general public, however, this figure is far too abstract and utterly out of reach. President, those grass-roots families and people who are waiting for public housing only care about one thing, that is, when they will be allocated PRH units. No more empty talk and no more bragging, please. Just one simple question: Is it true that they only have to wait for three years and will be allocated PRH units right afterwards? It is meaningless to them even if the housing production target for the next 10 years is 300 000 or even 400 000 units. Their real concern lies in the big issue of the lengthening of the waiting time for public housing which has changed from the previous three years to the current 4.7 years. Another reason for our suggestion of pegging the "three-year target" with the housing supply under LTHS is that we are expecting a more realistic LTHS supply target and prefer that those abstract figures be turned into a specific goal that is easy to understand. By doing so, I trust that LTHS will gain more support and recognition from the general public. From another perspective, this will be beneficial to the Government in securing support of public opinion, forging consensus among the community and resolving disputes over land issues.

President, there is a saying: "Should the cause be invalid, justifications will not convince; should justifications not convince, success will not come." If LTHS fails to bring hopes to the public, then it will be rather difficult to secure concrete support of public opinion for its implementation, no matter how scientific the formula for projecting public housing supply may sound.

As a matter of fact, it is really difficult for either the current-term Government or the next-term Government to honour its pledge of allocating PRH units to the applicants within three years, given the insufficient land supply. Although it is really difficult, I think it is incumbent upon the authorities to introduce some short-term relief measures to help the grass-roots people, in particular those families having been waiting for PRH for more than three years. To this end, DAB has been urging the Government to introduce rental allowances LEGISLATIVE COUNCIL ― 15 February 2017 3953 to help in particular those families having been waiting for public housing for more than three years. Some people worry that upon rolling out such a "gimmick-like" policy, landlords will make it an excuse to increase rents. As a result, the Government spends money only to benefit the landlords and the tenants continue to suffer because they still have to pay exorbitant rents. That said, the Government does provide rental allowances to CSSA households currently, but we do not see if there are instances in which landlords targeting rental increase at CSSA households. And certainly, if the Government is willing to study the relevant details such as the amount of rental allowances to be granted, how the allowances will be granted, and even how to prevent abuse of the allowances, DAB will, just like the Hong Kong people, remain open to this issue. I think consultation is absolutely advisable. The Government should engage the public to forge general consensus and work out the most appropriate option.

President, in respect of planning and development, I would like to discuss the Energizing Kowloon East project. As an international metropolis, Hong Kong is not among the world's leading smart cities yet. The Chief Executive said in his policy address in 2015 that the Government would explore the feasibility of developing Kowloon East into a Smart City. Members of the public are full of expectations for sure. I have no idea how to take forward the development of information technology since I am not from the IT sector, but there is saying in the IT sector which I find very true: The construction of a Smart City in Hong Kong calls for both petty cleverness and great wisdom. Cleverness refers to technicality, that is, the presence of sound technology; wisdom refers to application of technology for solving existing as well as future problems. The concept of Smart City is to make use of all sorts of information technologies or innovative ideas to consolidate the city's information systems and services in order to increase the efficiency of resource utilization while enhancing city management and services to improve people's quality of life.

Yet, in my opinion, the contents of the Smart City project seem quite superficial, including the development a smartphone application software with roadmaps of and information of back alleys, the concept of Internet on Things, provision of real-time parking vacancy information to vehicle owners, replacing old water meters and electric meters with smart meters, etc. These proposed initiatives did not show any substantive progress in the past one year, but as a matter of fact, what they can do to improve people's quality of life will be very limited even if they have ever been implemented. The authorities can be a bit 3954 LEGISLATIVE COUNCIL ― 15 February 2017 more aggressive that they can consider utilizing smart applications induced by technologies to solve problems in the district, such as reducing traffic flows. In developing smart cities, European countries will make use of technologies to mitigate the huge pressure borne by traffic systems, such as by installing underground sensors to facilitate automatic calculation of vehicle volume within a certain district, record road traffic conditions and estimate the time required for point-to-point transport. When the traffic volume in a certain district, say, Kwun Tong, exceeds the district's road capacity, the sensing system will automatically notify vehicle owners not to enter Kwun Tong so as to avoid traffic congestions.

I guess the Government should have realized that taking forward the Energizing Kowloon East project means that the Kwun Tong Industrial Area or even the entire Kwun Tong District has to face very serious traffic problems. I just want to point out that the HK$6 million spent on some 50 minor improvement works projects (such as face-lifting back alleys, installing smart traffic lights and increasing applications software to provide parking vacancy information) are, in public perception, so insignificant that they can help cure only the symptoms but not the root causes. Currently, Kwun Tong is overloaded with pedestrian flows and vehicular flows and I deem it necessary for the authorities to face squarely the problem of the overloaded traffic there, including the heavy traffic overloads of road traffic and MTR traffic. It is incumbent upon the Secretary for Transport and Housing to adjust the transport arrangement in Kwun Tong District as a long-term solution to its traffic problems. I would like to take this opportunity to revisit the several recommendations made by DAB.

First, in respect of transport, the Government should implement a monorail system as soon as practicable. Though with only limited capacity, monorail trains offer people an additional option of public transport. Running on tracks elevated above ground, monorail trains will allow an increase in traffic volume. This is particularly important since the traffic volume has already exceeded the road capacity for the time being, where Lung Cheung Road and Kwun Tong Road are constantly fraught with traffic jams and no room is left for expansion.

Second, the authorities should optimize the opportunity offered by the town centre redevelopment project to improve the existing facilities. I have to point out that the Administration should give due consideration to matters regarding the expansion of MTR stations as well as construction of new roads. DAB proposed to expand the platform area of Kwun Tong MTR Station to make room for the LEGISLATIVE COUNCIL ― 15 February 2017 3955 increase in traffic flow while increasing the number of station exits to enhance the pedestrian circulation effectively without altering the existing railway tracks. Regrettably, such a recommendation is still under discussion. I think the administration should study it seriously.

Third, the proposed East Kowloon Line has to be implemented as soon as practicable since this project falls within the ambit of the bureau headed by Secretary CHEUNG. It is necessary to connect Choi Wan, "Sam Choi", "Sei Shun", Sau Mau Ping, Po Tat and the project right now under construction, namely Development at Anderson Road in order to provide a solution to people living on hill slopes who have difficulty catching any means of public transport. We also recommend that a new rail line extending from Lam Tin (North) to Yau Tong be developed to enhance connection with Hong Kong Island. Yet, the East Kowloon Line remains all talk only for the time being and follow-up actions have yet to come, let alone the results. Secretary, it is time to get down to business now.

Fourth, to improve the congested traffic in Kwun Tong, I suggest that the Government draw reference from the flyover at Hill Road extending from the University of Hong Kong straight through to ShunTak Centre. We propose to build an elevated flyover extending from Anderson Road straight through to Kwun Tong town centre or Tseung Kwan O Road. This will shorten the travelling time by one or two minutes and help alleviate the traffic pressure.

Fifth, the construction of Kowloon Bay elevated walkway system should commence as soon as practicable. At present, due to the limited number of footbridge, people travelling to and from Kowloon Bay MTR Station and Kowloon Bay Business Area during rush hours will walk onto the motorways to compete for use of roads with vehicles because it is so crowded everywhere and footbridge is totally absent in the road section concerned, thus exposing themselves to various kinds of road dangers. Some people may choose to take the shuttle bus instead of walking over to more distant commercial buildings. Actually, the elevated walkway system in Kowloon Bay has already gained the consensus of the Kwun Tong District Council but regrettably, no further progress has been made yet. What does this tell? Both the public and the District Council do think it a matter of urgency, but what about the Government then? More than seven link roads have been drawn up in the planned network of pedestrian links in Kowloon Bay but among which the flyovers of the three link roads are still at the design stage. This, I think, has caused public 3956 LEGISLATIVE COUNCIL ― 15 February 2017 disappointment with the Government. I deem it a kind of progress made at "the speed of a tortoise".

The efforts in energizing and revitalizing Kowloon East did have brought unprecedented opportunities to people living in Kwun Tong, but in my opinion, it also serves to contribute to the unprecedented traffic flows and pedestrian flows in Kowloon East, namely Kwun Tong. The renewal of Kowloon East has just begun and its further development will be stifled if its traffic problems remain unresolved. Without sound transportation support, the transformation of Kowloon East into a new central business district will be rendered impossible.

President, I so submit. Will the Secretary please give serious consideration to all such issues. Thank you, President.

DR KWOK KA-KI (in Cantonese): President, I do feel heavy at heart. While we are debating the Policy Address, some leading contestants for the Chief Executive election are talking about their respective grand blueprints, under which housing is an item. LEUNG Chun-ying is really smart. Several years back when he was jockeying for the position, he accorded top priority to housing policy, claimed that he could resolve the housing problem, and hence took in a lot of Hong Kong people. For instance, he said at that time that Hong Kong was not short of land. On the contrary, he said, many sites were left vacant under the sun and it was necessary to expedite the utilization of brownfield. He also vowed to raise the average living space per person, and even to shorten the waiting time for non-elderly public rental housing ("PRH") applicants to three years.

Five years have passed and the waiting time for PRH application has grown from 2.6 years in 2012 to 4.7 years as announced just now. As at 2016, the number of completed PRH flats stood at 51 373, some 24 000 short of the target. Private property prices have risen 44.8% during LEUNG Chun-ying's term of office, with the Centa-City Leading Index shooting up from the then 100.6 to the current figure of 144.91. The Government will certainly attribute all these to a lack of land and houses. This claim is true to a certain extent, as the Government only owns a small amount of land. Given each flat is measured at 700 sq ft, all the Government sites are capable of providing a total of 122 000 housing units, according to statistics.

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On the other hand, 4.7 billion flats can be provided on the land reserve held by the five property giants and the MTR Corporation. If each flat is measured at 450 sq ft, 7.4 billion housing units can be provided on the lands held by them in aggregation. Henderson Land Development Company Limited ("Henderson Land") is a case in point. Property developers have been prescient regarding the Government's development proposals in Northeast New Territories and New Territories West. In the last five years alone, Henderson Land and Sun Hung Kai Properties Limited ("SHK Properties") have already acquired enough land to build 71 Hong Kong Stadiums. Between the two, Henderson Land owns 45 million square feet of land in Hong Kong and SHK Properties owns 30 million square feet.

I cite these example to show that the Government is in fact not running short of land. Also, the discussions on East Lantau development and the development of country park land are just raised for the sake of diverting people's attention and advancing a straw man argument. If the Government willingly faces these hoarded lands, it is free to promulgate new policies. For instance, if the owner does not use agricultural lands for farming but change their land use, the Government should impose sanction on the owner, or ask the owner to restore the lands to their original state, or even confiscate them for such development projects as the construction of PRH or Home Ownership Scheme flats. Why did the Government choose not to do these?

The Government is actually dancing tango with property developers. It indeed is practicing high land price policy, but is shy of talking about it explicitly. And this policy dovetails with the massive arrival of "water from the north" in Hong Kong. Several development sites at the Kai Tak Development Area have recently been acquired, at record-breaking, sky-high prices, by state-owned enterprises coming to Hong Kong from the Mainland. As it is actually easiest to earn financial revenues this way, the Government has chosen to turn a blind eye to these cases and ignore the suffering of common people. Hence, the total number of subdivided units has increased to more than 87 000 over these five years, housing close to 200 000 people. The sizes of these flats average at 132.9 sq ft. And how much do they cost? Their rents average at $4,094.

This Government keeps on lying. But what worries us most is that the candidates now running for the Chief Executive election, including "689" version 2.0 Carrie LAM, have gained open support from several major property developers and landlords. Therefore, the chance for us to resolve the housing 3958 LEGISLATIVE COUNCIL ― 15 February 2017 problem is slim and slight. As the Government and property developers are now part of the same syndicate with vested interests, the Government has neither the will nor the power to combat land hoarding by property developers. On top of this, we see more and more property developers coming from Mainland China, some are private enterprises, others are state-owned. Since state-owned enterprises are entrepreneurial interests under the Central Government, it is all the more impossible to lay a finger on them.

Next, I would like to talk about electricity. Why? Whenever the Scheme of Control Agreements we entered with the power companies are about to expire, we will soon have a change of government. There is no exception this time. The opponents of the Government, the two major power companies, have already had their arsenal fully loaded and are ready to use all their resources, human resources or otherwise, to bargain and negotiate with the Government. The profit control agreements are nonetheless as useful to the power companies as magic wands. So long as they keep increasing their investment in fixed assets, including the reserves and ducts necessary for the new fuel mix, they can earn to their heart's content. The fuel cost has all along been used to offset the call for reduction in electricity tariffs and is thus the best excuse for refusal.

Hence, whenever we ask the Government to alleviate the housing problem or the land problem, it is not going to provide any answer to Members. All the Government does are either casually making up some unrealistic and fictitious measures, or habitually granting major funding approvals for some high-sounding rubbish construction works. This is the so-called housing policy that the Government has been giving us over the last five years.

I so submit.

DR HELENA WONG (in Cantonese): President, I wish to discuss the issue of water safety in this debate session. In the report published by the Commission of Enquiry into Excess Lead Found in Drinking Water, there are totally 17 recommendations. The gist of these recommendations is that the Government should: first, undertake to test the drinking water of all PRH estates again, including the testing of stagnant water; second, review the existing legislative framework and regulatory regime; third, set up an independent body to overlook the performance of the Water Supplies Department ("WSD") and water quality in Hong Kong in general; fourth, establish the "Hong Kong Drinking Water LEGISLATIVE COUNCIL ― 15 February 2017 3959

Standards", taking into account overseas experience and practices; fifth, implement Water Safety Plans; and sixth, devise a licensing and registration regime for parties responsible for plumbing installations.

These recommendations are still fresh in our memory and are yet to be implemented. But then, four days ago, there was a news report about the presence of excess lead in the drinking water samples of a factory building in Kowloon Central that had undergone water pipe replacement in its renovation. Excess lead in drinking water is once again detected, and from the news report, we know that the culprit this time is once again a leaded soldering material. WSD has not disclosed the name of that factory building in Kowloon Central, so people working in and visiting the factory buildings in the area are very worried. WSD has also failed to disclose the extent of excess lead and the number of water samples tested to be containing excess lead. It has failed to provide all such statistics. I even believe that the Government has not provided the people working and living in that factory building with any assistance in receiving blood tests to ascertain whether there is any excess lead in their blood.

President, this present incident has woken us to the stark fact that the measures taken by the Government following the last "excess-lead-in-water" incident have not been able to dispel all the public worries about lead content in water. Is the problem with that factory building in Kowloon Central just the tip of the iceberg? How many more new buildings, schools and private buildings are suffering such water pollution as a result of their maintenance or construction works? We do not have any statistics at all. The public simply do not know whether the measures adopted are effective. If the measures taken by the Government had been able to ensure drinking water safety and tackle the problem of lead in water, the "excess-lead-in-water" incident described in the above mentioned news report would never have occurred.

We thus very much hope that the Government can disclose what actually went wrong in this recent incent. Why did plumbers still use a leaded soldering material in the water pipe replacement works? Who purchased the soldering material for them? At present, we are still unable to ascertain which segment in the process went wrong. Hence, I hope the Government can act with greater openness and transparency, so that the public can know which segments of the present policy are still marked by loopholes, and which segments have gone wrong. It is obvious that the problem in this present incident is the soldering material.

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Besides, there is also a problem with the people responsible for the works concerned. Why did anyone use a forbidden material for such plumbing works? I believe the existing legislation is still unable to resolve certain issues completely, with the result that it simply cannot eradicate all such problems. For that reason, the Democratic Party has always maintained that Hong Kong really needs a water safety law to ensure that no water safety threat will arise in any water pipe installation works due to the ignorance or intentional omissions of any stakeholders. We of course need to put in place a world-class standard, otherwise the water quality in Hong Kong may regress to the levels in Third World countries, where the water for drinking is at best not very dirty but inevitable contains heavy metals.

The Government and WSD have conducted lots of publicity reminding us to treasure water. But every time I see such publicity, I simply do not know what to say. The authorities remind us to treasure every drop of water. We of course agree to this. But then, WSD also conducts publicity to remind the public that after waking up and turning on the tap early in the morning, they should let the tap run for two minutes before using any water. The public are also reminded that when they return home after a long vacation, they must let the tap flush for even a longer time, because there is no guarantee that no heavy metals or toxic substances are found in the water. In that case, how can the public have any confidence in the water quality control of WSD? On the one hand, the authorities ask the public to treasure water and not to waste even a single drop of it, but on the other hand, they ask us to let the tap flush early in the morning. This explains why I so urgently ask for a government undertaking on formulating a water safety law as early as possible.

But since the publication of the report on excess lead in drinking water in May last year, the authorities have never taken any serious actions to implement the recommendations. They have kept saying that they need to ask experts to discuss the matter further and explore which standards should be adopted. For how much longer do the authorities want to delay their actions? One of the recommendation is just a request for the Government to test the water and stagnant water in public housing estates. This is not difficult to implement at all. But the Government still wants to defer the test until after March, after the Chief Executive Election. What is wrong with the Government?

With such a delaying tactic, the authorities simply cannot convince the public that they are sincere in solving the problem. They say they will do their LEGISLATIVE COUNCIL ― 15 February 2017 3961 very best to follow up the problem, but in our eyes, they have simply been doing their very best to put up delay. The Secretary for Transport and Housing, who is present now, should know that the problem actually cuts across the portfolios of different Policy Bureaux. But in the past, his Bureau never monitored the issue of drinking water quality in the course of public housing construction. When the Bureau realizes the problem now, it requires building contractors to replace the water pipes in the 11 public housing estates with the "lead-in-water" problem, and says that water tests will be conducted again after the replacement. But the absurd thing is that the authorities are going to follow the same protocol of water tests and sample collection that has long since been dismissed by the Democratic Party as problematic: letting the tap run for two to five minutes before collecting samples for testing. Can't they see that it is pointless to do so?

This protocol is simply pointless. The authorities require building contractors to replace water pipes, so it is common sense that they must also collect samples of stagnant water for testing if they are to ascertain whether the drinking water after pipe replacement still contains any pollutants. They must not follow the same old protocol. The Transport and Housing Bureau is so ignorant, totally ignorant of water supplies. That is why it simply follows the protocol adopted by WSD. Since WSD still follows the protocol of letting the tap run for two to five minutes before collecting samples for testing, the Bureau just follows blindly. One more thing is that WSD insists that it can make a decision only after receiving the advice of international experts. This Government is just a flop.

The Policy Address really makes me want to cry because people have been saying that the drinking water in factory buildings also have problems. This is actually why I have always hoped that apart from undertaking to follow up the problem vigorously, the Government can also promise to formulate a water safety law and proceed in full speed to implement the recommendations made by the Commission of Inquiry into Excess Lead Found in Drinking Water. I very much hope that the Secretary for Transport and Housing can undertake to collect samples of "first drops" for testing after the replacement of water pipes, so as to ascertain whether there are any problems with the new water pipes.

President, we are concerned about water safety, and this leads us to the fact that besides local reservoirs, Dongjiang River water is the major source of our water. We naturally hope that the Government can roll out measures to protect and increase local water sources, and to closely monitor the quality of Dongjiang 3962 LEGISLATIVE COUNCIL ― 15 February 2017

River water. Is there any room for increasing the capacity of our reservoirs? Is it possible to build reservoirs? Is it possible to increase the recycling of local water resources? We know that the authorities have been doing desalination. But this is simply not enough because even after building a desalination plant, its daily output will never be able to make up for the loss of drinking water due to leakage from ageing water pipes. Therefore, we can foresee that for quite some time to come, Hong Kong must still depend on Dongjiang River water. But we fail to see that the Government has done its very best and rolled any measures to increase local water resources and reduce our reliance on Dongjiang River water.

Regarding Dongjiang River water, I have repeatedly put forward requests for an inspection visit along Dongjiang River. But the visit has been deferred over and over again. It was originally scheduled in February, but it has suddenly been postponed to April. I hope there will not be any further delay and postponement. There have recently been some very perplexing news reports about the re-emergence of rubbish mounds near the source of Dongjiang River. It is reported that there are rubbish all around, not only household waste but also construction waste. The problem has reached such serious dimensions that even the county and municipal governments are no longer able to tackle. We simply do not know whether this problem involves any corruption and connivance, and whether the local governments are thus made to tolerate the heaping of rubbish against Mainland environmental legislation.

In the end, the Central Authorities may need to assign personnel to Guangdong to clean up the mess and clear all rubbish immediately. They may fill the sites with mud and earth again and then put up warning signs against rubbish dumping, as if nothing has happened. Since no anti-leakage precaution was taken before such unlawful rubbish dumping activities, all sorts of liquids and pollutants oozing from the rubbish will definitely pollute the soil and Dongjiang River. In this way, not only local residents but also Hong Kong people will be affected. It is true that after the transportation of the water to Hong Kong, our water treatment works can do some filtering as a means of quality control, but we must still ask the Hong Kong Government whether it is aware of the rubbish mounds along Dongjiang River.

I therefore strongly hope that in the inspection visit, we can obtain more information about the places along Dongjiang River. But I must also admit that we cannot possibly visit and inspect the places every day. Is there any notification mechanism on Dongjiang water, under which the environmental and water supplies departments of the two places can exchange information? Are LEGISLATIVE COUNCIL ― 15 February 2017 3963 any personnel assigned to do inspections and notify Hong Kong immediately once the pollution of water sources by any unlawful chemical plants or rubbish mounds is noticed? Or, are we actually kept in the dark all the time, with the result that we will know of a major incident only after it is uncovered and exposed by someone? I do not know whether WSD and the Environment Bureau are aware of the incident I have mentioned. But if it is true that the authorities will not know of any incidents until after they have come to light, how can the public believe that the Government can monitor the quality of Dongjiang River water to ensure water safety control for us?

President, I have spoken for such a long and my only hope is that the new Secretary for Development, Mr Eric MA, will vigorously shoulder the duty of protecting drinking water safety in Hong Kong and courageously and proactively speed up the enactment of drinking water safety.

DR YIU CHUNG-YIM (in Cantonese): President, I will express my views on the Policy Address in relation to land, housing, transportation, environment and conservation.

First of all, I am against the development mode proposed in the Policy Address for developing land by public-private partnership which lacks regulation. The Government proposes in the Policy Address that the West Kowloon Cultural District ("WKCD") Authority may develop the hotel/office/residential facilities in WKCD jointly with the private sector through a Build-Operate-Transfer ("BOT") arrangement. I must point out that this arrangement will allow the WKCD Authority to bypass the scrutiny of the Legislative Council, and it also fails to tie in with the internal code laid down by the Government on public-private partnership. The arrangement is thus very risky and will get completely out of control.

If Members have paid attention to the recent incident concerning the building of the Hong Kong Palace Museum in WKCD, they will agree that popular sentiments have responded negatively to the cost overrun of the WKCD Authority and its black box operation. People demand better transparency and stricter regulation. Regrettably, the Policy Address perversely allows the WKCD Authority to make use of the revenue to be generated from the land to jointly develop, operate and build the remaining projects with the private sector through a public-private partnership that lacks regulation.

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In fact, Members should still remember the first design of WKCD when the Government first proposed the idea of developing West Kowloon into a cultural district after the reunification. At that time, the Government proposed to allocate the entire 40-hectare site to a private consortium through a BOT arrangement. A series of exhibitions were held at that time about the proposal. However, due to public grievances over the possibility of Government-business sector collusion in the BOT arrangement, the Government ultimately aborted using this arrangement to develop WKCD, which gave rise to the establishment of present WKCD Authority.

At that time, the Government undertook that all projects within WKCD could be constructed with a one-off upfront endowment of $21.6 billion to the WKCD Authority, and the entire endowment was ultimately approved by the Legislative Council. The Government also undertook that the land sale proceeds from the disposal of the hotel, office and residential sites in WKCD by public tender would serve as a financing arrangement.

But within a few years' time, we notice that the WKCD Authority has used up all its money and recorded a serious cost overrun. Instead of coming back to the Legislative Council to seek further funding to cover the cost overrun, it sought funding from the Hong Kong Jockey Club for the proposed Hong Kong Palace Museum. As for the remaining Music Centre to be built in WKCD, the Government proposes in this Policy Address that the capital cost of the Music Centre will be funded through a BOT arrangement.

In other words, this arrangement can allow the Government to bypass the scrutiny of the Legislative Council, and it also goes against the decision of the people made in the past that WKCD projects should not be financed through BOT arrangements. The $21.6 billion upfront endowment is supposed to cover all WKCD projects, but the WKCD Authority overspent its money and did not come to the Legislative Council for funding. We have no choice but to hold it responsible for the matter. Hence, it is definitely unacceptable that the Government proposes to adopt a BOT arrangement again this time.

The second part of my speech is about housing. Since assuming the post of Chief Executive, LEUNG Chun-ying has been saying the need to increase land supply to suppress rising property prices. However, five years have passed and property prices have apparently skyrocketed, rather than being suppressed. The LEGISLATIVE COUNCIL ― 15 February 2017 3965 property prices in Hong Kong, which have again made a new record, have actually increased in a way that betrays science.

Let us start with private properties. In order to push up housing production, the Government has been using every narrow strips of land for housing construction, jeopardizing our environment and green belts. According to the statistics released by the Transport and Housing Bureau in the end of January, private residential units completed in 2016 reached 14 600 units, indicating a year-on-year increase of 29.2%, while private residential units constructed in the year reached 25 500 units, indicating a great leap of 80% and registering a new record high since 2000. The Bureau also says that there will be a potential supply of 94 000 units in the coming three to four years, which will make another new record.

If these beautiful statistics provided by the Government can prove that the theory of increasing housing supply can lower property prices, the Government should have suppressed the property prices long ago. Just look at the statistics. Instead of lowing the property prices, property prices have actually soared with the increased housing supply. Hong Kong was named the city with the most unaffordable housing in each of the past five years. According to the latest publication of the Rating and Valuation Department, the housing price index for December 2016 was 306.8, indicating an increase by 7% as compared to 285 in the same period of 2015. Please remember that this group of figures is obtained after the introduction of new "harsh measures" by the Government. It clearly shows that these new "harsh measures" and the substantially increased housing supply fail to suppress property prices. I am sure, and it is more than clear, that the Government has prescribed the wrong remedy.

As a matter of fact, almost all economists have unanimously echoed that the high property prices in Hong Kong are related to the influx of hot money due to the global low interest rates and negative real interest rates. This is an investment or speculation need, not a housing need. Hence, the "wrong prescription" will only further damage our environment and make Hong Kong an even less desirable city for living.

Actually, in order to truly resolve the housing problem in Hong Kong, we must separate the right to housing from the right to investment. I have been advocating a cooperative housing scheme for people who choose not to invest or 3966 LEGISLATIVE COUNCIL ― 15 February 2017 speculate on housing and thus they will not make a profit or incur a loss from their property. Cooperative housing can be built on sites supplied by the Government, so that no land premium will be added to the construction cost. This type of housing can also exempt the Government from the need to make financing commitments on its housing construction. People can thus truly live in peace and work happily while the Government can also prevent its public finance from being overburdened by its housing construction expenditures. This is the solution to truly address the housing problem.

In this Policy Address, LEUNG Chun-ying fails to scientifically decode the reason for the soaring property prices; worse still, he turns to country park sites for housing construction. In fact, with an urban population density of 24 000 persons per square kilometre, Hong Kong is one of the cities in the world with the highest urban population density, making Hong Kong an increasingly undesirable place for living. Our average population density still reaches 7 000 persons per square kilometre.

Hence, we must understand why we went for a high development density in the past. It was a give-and-take decision. We chose high-density urban development in order to preserve more country park space. It is like developing a housing estate. One can choose to build small houses, or a few blocks of tall residential buildings so as to save space for putting enhanced green spaces in-between. If the Government hastily changes our earlier consensus on choosing high-density development to save room for public space with the excuse that "there is still space left", our public space will continue to be nibbled away and Hong Kong will become an even less desirable place for living.

Third, it is about brownfield sites. In fact, the origin of brownfield sites can be traced back to the "Melhado" case in which the Government lost. The Government has never rectified the problem, which has led to serious damages made to the countryside. And all that the Government has proposed in the Policy Address is to spend two years on conducting a brownfield survey.

But we note that this two-year gap has caused many agricultural land owners in the New Territories to expeditiously destroy their farmland, hoping that they can benefit from the new government policy to be launched two years later with their "destroy first, develop later" practices. This in a way has encouraged more agricultural land owners to spend up destroying their farmland in the New Territories. In its reply to my written question, the Government says that they LEGISLATIVE COUNCIL ― 15 February 2017 3967 are not planning to deal with this problem and will remain uninvolved in stopping the destruction of farmland in the New Territories. It also says in the reply that my suggestion of immediately conducting "freezing surveys" unfeasible.

As a matter of fact, experiences obtained in the United Kingdom show that giving priority to developing brownfields can quickly solve the problem. If we take a look at the judgment of the "Melhado" case, we will find that as long as a brownfield site is found being used for offensive trade, the site owner has contravened the lease conditions and the Government can take enforcement action to stop him.

It is apparent that many operations being carried out on brownfield sites are causing pollution to the land, air and rivers there. The Government is thus duty-bound to take enforcement actions against these site owners who have contravened the lease conditions. Besides, when more and more agricultural sites are turned into brownfield sites, it will do no good but harm to our environment and the biodiversity of Hong Kong. This is quite the opposite of what the Government advocates in a document issued recently, which seeks to enhance the biodiversity of Hong Kong.

Loopholes in the Town Planning Ordinance have made existing mechanisms incapable of stopping agricultural land from turning into brownfield sites. But so far nothing has been done by the Government to amend the Town Planning Ordinance. In fact, the Government promised the public in 2000 that it would conduct the second stage of a consultation, but the consultation has been held up time and again. Seventeen years have passed and the Government has yet to deliver its promise, thus resulting in rubbish tips and concrete farmland everywhere in the New Territories. But all that the Government has said in the reply is that it does not have the enforcement and regulatory power. We must immediately rectify this ridiculous situation. I plan to propose a private bill to amend the Town Planning Ordinance, with a view to restoring to a state of city planning in which the Government is vested with an enforcement and regulatory power. Thank you, President.

MR LAM CHEUK-TING (in Cantonese): President, I would like to talk about transport policy, including the policy according priority to railway development and the issue of traffic congestion.

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Giving priority to railway is a major transport policy adopted by the Hong Kong Government at present. However, we consider that such a policy has metamorphosed, and has seemingly become inclined to railway in recent years, and may even jeopardize other means of transport, including buses and minibuses.

Whenever there is a new railway line, reductions in bus and minibus services will follow, posing much impact on the lives of the grass roots. Under such a practice, buses and minibuses are no longer competitors of rail transport. In fact, the railway system carries over 5 million passenger trips every day, representing almost 42% of overall daily public transport.

It is risky to overly rely on railway service. In case of delays caused by incidents like train malfunction or other problems in the system, the chain reaction resulted will affect tens of thousands, or even hundreds of thousands, of passengers. In most cases, rail operators may need to close a major station or manage passenger flow merely due to a minor incident. The public can still have choices or alternatives if minibus and bus services were not trimmed substantially. Therefore, it is necessary for the Government to review its transport policy, such as studies on public transport strategies and corresponding measures, and so on. It should strengthen the role of buses, minibuses and even ferries as important players in its transport policy, as well as competitors of rail transport. We simply cannot rely too much on the railway system.

Second, President, I would like to discuss Hong Kong's traffic congestion problem. Traffic jams in Hong Kong have been worsening mainly because of the rapid increase in vehicles, while transport infrastructure cannot catch up with the pace, which leads to serious congestion during rush hours. Take the North District as an example, a few main termini are always congested during rush hours. Traffic jams in the district can sometimes last for one hour or two hours, making life difficult for residents in remote areas. Congestion caused by vehicle failure is even more serious.

According to the Report on Study of Road Traffic Congestion in Hong Kong published by the Transport Advisory Committee in 2014, vehicles travel at a speed of 5 km/h on certain road sections during morning rush hours, even slower than travelling on foot.

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As I have mentioned earlier, the increase in private cars is the main reasons behind traffic congestion. The statistics indicated that there were 360 000 licensed private cars in January 2016, and the number exceeded 492 500 in October last year. The average growth rate of licensed private cars was 3% per year between 2006 and 2010, and the rate reached 4.8% between 2010 and 2013. Moreover, private cars accounted for 92% of 143 500 new licensed vehicles during the same period.

We believe that it is necessary to formulate a policy to limit vehicle numbers in the long run, as well as affirming the principle of giving priority of road use to public transport.

Finally, President, I would like to take this opportunity to raise a point to the Secretary for Development. You and the Secretary for Labour and Welfare just get promoted. I once told the Secretary in person that I understand the need for the Development of North East New Territories. That said, the Secretary needs to take care of the affected residents, especially the elderly residents in a residential care home for the elderly in Kwu Tung. The elderly people there originally planned to spend their twilight years in the residential care home, yet the North East New Territories Development Plan has suddenly emerged, causing grave concern among the elderly. We hope the authorities can earnestly consider the welfare of these elderly people and take into account the close relations between them and the existing operator when they formulate the rehousing policy, so that the elderly can have peace of mind, enabling them to settle into the residential care home in the new complex under preparation.

Thank you, President. I so submit.

MR ABRAHAM SHEK: President, I shall be using the 30 minutes of my allocated time to speak on the Policy Address as a whole.

As the 2017 Chief Executive Election is approaching, the public seem to be more interested in who will become the next Chief Executive than Mr LEUNG's last Policy Address of his tenure. Is the relative cold shoulder given to this Policy Address alluding that people have already transferred their hopes to Mr C Y LEUNG's successor? This might be lamentable, but from tackling our housing woes to fostering wealth creation to improve governance, this Policy Address, like Mr C Y LEUNG's previous four, has no breakthroughs that could 3970 LEGISLATIVE COUNCIL ― 15 February 2017 guide Hong Kong out of economic stalemate and re-inject a sense of hope and confidence about creating a society of stability, prosperity and social harmony that the general public will be able to live in peace and contentment in the foreseeable future.

First, I would like to talk about housing, the prime concern of our citizens and the top priority of the successive SAR Government. Without any doubt, the current-term Government has made strenuous efforts in this area. Yet, what it has achieved still falls short of public expectations. It is rather sad but they did try very hard.

Concerning public housing, there are around 290 000 applicants on the waiting list for public rental housing ("PRH") units. Compared with 190 000 applicants in March 2012, there has been a surge of over 100 000 applicants since Mr C Y LEUNG took office. The average waiting time of general PRH applicants has also extended from 3 years of waiting to 4.7 years during the same period. The unresolved supply-demand mismatch of PRH units has been one of the factors leading to the worsening situation. However, the crux of the problem might be attributed to the SAR Government's confusing and overly aggressive measures. For example, allowing White Form buyers to purchase second-hand Home Ownership Scheme ("HOS") flats has disrupted the secondary market of HOS flats which were originally designated for eligible Green Form buyers. Consequently, the chance of PRH tenants purchasing HOS flats is reduced, which has in turn affected the turnover of PRH units. The housing ladder of PRH, HOS and private flats as a conventional means for citizens to improve their conditions, subject to their financial capability, has been impaired, sadly so.

President, the provision of public housing should aim to promote social harmony by allowing the needy to live in peace and contentment. Sadly, many PRH families are forced to split and relocate under the current policy on housing splitting as their younger family members have entered the job market when the increased family incomes make such families fail the means test. Consequently, elderly family members of these PRH tenants are forced to live alone. This is inconsiderate and inconsistent with our Chinese traditions, such as respect of family values and filial piety. While the Government's elderly policy highlights "ageing in the community" and "continuum of care", both the policy on house splitting for tackling underoccupation and the policy on well-off tenants have been undermining the said Chinese traditions as well as causing inconvenience to people's daily lives, creating social disharmony, and not for the purpose of LEGISLATIVE COUNCIL ― 15 February 2017 3971 harmony―although these far-from-people-oriented policies might help the Hong Kong Housing Authority to embellish its figures on PRH units available for PRH applicants.

For private housing, over the past few years, the Government has introduced measures to curb the surging property prices (that is, the "harsh measures"). However, low global interest rates, imbalance between supply and demand for private flats and high construction costs keep driving up our property prices, despite the Government's interferences.

This major setback exposes the Government's lack of understanding of the property market as well as its incompetence. From the Special Stamp Duty to the Buyer's Stamp Duty, the Double Stamp Duty and the latest increase in the ad valorem stamp duty rates, each time a cooling-off period was created with a slight drop in property prices and a sharp reduction in property transactions in the second-hand market, but the effect became shorter and shorter. The strong rebound of property prices after each of these interventions reflected that the resilience of the market is not subject to government control. You cannot control the market. The "harsh measures" have undermined the self-adjusting mechanism of the property market.

Market is the only solution to stabilizing property prices and restoring the balance between supply and demand of residential properties. An active property market free from unnecessary interferences will reflect the true state rather than a distorted picture of market demand and property prices. The primary objective of housing policy is not to help every individual to purchase a home. The Government must make an effort to ensure that they spare no efforts to satisfy the housing needs of the grass roots and the lower middle class by constructing more PRH and HOS flats in a more expeditious manner. Private housing should be left to the invisible hand of the market with minimum interferences. What the Government should do is to ensure proper planning and steady land supply with a view to satisfying the housing needs of people from various social strata. However, this is easier said than done.

It is a shame that the SAR Government has still embraced the mentality of the 1970s and the 1980s to formulate its strategy on planning and land development today. My fellow lawmakers and the absentees, we are now in the 21st century, but our land use planning is not commensurate with what a developed city should be like. Hong Kong should improve its planning. For 3972 LEGISLATIVE COUNCIL ― 15 February 2017 example, the composition of the Town Planning Board ("TPB") needs to be reformed drastically. The current arrangement of both the Chairman and Vice-chairman of TPB being government officials is unpalatable. The Town Planning Ordinance needs to be amended, so that a non-official representative instead of the Director of Planning shall be appointed as Vice-chairman, and so on, to ensure adequate consideration of innovative approaches to planning and development. If the Government is not going to do this within these four years, I will be trying to move that TPB should be given a different review.

Urban renewal, on the other hand, is conducted on a project basis, without adequate consideration of the cohesiveness and harmony of the local community. As a result, urban renewal projects very often fail to improve the overall living conditions of old urban districts. On the contrary, many old urban districts have been brutally segregated and demolished. Local communities are destroyed since rentals and property prices have escalated following urban renewal. Just like PRH tenants, they have been deprived of an affordable market after The Link Real Estate Investment Trust took over all those government properties.

The SAR Government has only focused on increasing land supply but failed desperately to consider the long-term and healthy development of the city as a coherent whole. The accusation of "blindly usurping land" is not simply about how the Government overlooks the need for public space and better air quality. It is the irreversible malpractice of the Government which neglects urban layouts and hampers quality of living and convenience of the people as it has been hopelessly conservative and bureaucratic. The SAR Government must put a stop to "destructive" patterns of thinking in planning and urban renewal.

President, persistent well-being of a city and its people hinges on sustainable economic development of the city. Therefore, wealth creation must be the primary concern of the Government. To our dismay, the Chief Executive's last Policy Address, like his previous four, has failed to address this issue adequately. While the Chief Executive has stressed the National 13th Five-Year Plan and the "Belt and Road" and expressed his good intention of promoting economic growth and wealth for the long term, wealth creation for the short-to-medium term, which has been most relishing, is again left blank or put on a big hold.

Conversely, Mr C Y LEUNG's setting of a hard target on settling an working hour policy and the off-setting mechanism of the Mandatory Provident Fund Scheme within this term of the Government would risk putting the next LEGISLATIVE COUNCIL ― 15 February 2017 3973

Chief Executive in the danger of being a lame duck in those areas almost from the start of the next Administration if meeting the hard target results in rigidity while rubbing salt into the wound of our business environment (particularly small and medium enterprises), which has been deteriorating in recent years. It is time that the four candidates for the next Chief Executive Election should put this subject as their top economic policy.

Perhaps, Mr C Y LEUNG banks on the concept of re-industrialization. However, it is unlikely to be realized in the short-to-medium term. President, in the opening sentence of the Policy Address (paragraph 54), Mr C Y LEUNG says: "Innovation and technology are no slogan". But is re-industrialization itself just another slogan, like Mr TUNG's "developing Hong Kong as a Chinese medicine hub, fresh flower port and cyber port"? This worry is not baseless as no concrete plans and targets are provided about how to materialize re-industrialization. Moreover, we are ill-prepared to implement re-industrialization by which the Chief Executive hopes to foster smart production and technology research and development in Hong Kong because Hong Kong lacks not only a pool of talents for re-industrialization, but also an education system to nurture such talents.

President, a recent report of The Academy of Science of Hong Kong reveals that since the implementation of the current Diploma for Secondary Education in Hong Kong, fewer students have enrolled in STEM-related subjects (namely, science, technology, engineering and mathematics), and many high-performing students have opted to study medicine, business or law at universities. As a result, faculties of science and engineering have relatively more difficulty in admitting students with good academic results. If this trend sustains, it is doubtful that the development of the innovative and technology industry and the concept of re-industrialization will bear fruits.

When it comes to education, although our education expenses continue to rise year after year, our education system remains problem-ridden. The problem lies in the officials in charge of our education policy. We should have Anthony to be the head of education because he has the experience, he has been teaching and he has been a chancellor. They have neither vision nor mission as they are mere pseudo-educationists who know little about the essence of education, which is about nurturing all-round educated people that will suit the needs of a modern, knowledge-based society.

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The SAR Government should treat education spending not as an expenditure item but an important investment in nurturing human capital for generating a perpetual stream of future income for the sustainability of the city. Education is not about achieving various benchmarks; education is about unleashing every individual's potential. The education process should not be an endless ordeal of drilling; it should be a challenging exploration of uncharted water of knowledge. In education, President, sky is the limit.

With these in mind, neither the Territory-wide System Assessment nor its recently modified version of the Basic Competency Assessment serves any meaningful purpose in the education sense. Given that the Basic Competency Assessment will continue to be a device only for the Education Bureau to rank primary schools and secondary schools, this will drag schools, parents and students in an endless loop of drilling. Such practice must be discontinued.

I would like to touch on the surplus. Thanks to the former Financial Secretary for his 9.5 years of hard work to build up a fiscal reserve of over $900 billion. This will probably enable the next Government to take a more proactive approach to mitigate the underinvestment problem in education; to lower teacher-student ratio in secondary schools; to expand the number of subsidized places each year to admit more eligible qualified students to undergraduate programmes. At the moment, since 1997, the admission of secondary school students to the eight universities has not increased and has stayed at 13 000. Every year, we have approximately 22 000 students, 7 000 of whom are left without places. We should also build more student hostels, and at the moment there are 6 600 hostel places. This is a major problem which actually prevents us from taking any overseas students. And, we should also carry out a review of the funding methods of the University Grants Committee to foster internationalization of local universities, to develop Chinese as a second language curriculum for non-Chinese speaking students to cater for non-Chinese speaking students' need. These are just a few of the important issues that the Government has done little to address properly. President, while education attainment is important in a knowledge-based society, education attainment is not everything.

While we are used to complaining about Hong Kong's economic structure for lacking in diversity, the construction industry provides underachievers with an alternative path to climb up the socio-economic ladder. Nevertheless, under the LEGISLATIVE COUNCIL ― 15 February 2017 3975 influence of our education system and traditional beliefs, young people are reluctant to enter into the construction industry as parents and their children have a general obsession that only becoming a professional like doctors, lawyers or bankers will provide them with a more promising and secure future. Such obsession kills the potentials and possibilities of our younger generation and imposes a limit on the development of human capital in certain industries only.

Now, I turn to the shortage of labour, particularly in the construction industry. In the Policy Address this year, the Chief Executive states that while land prices are rising and rising―this is unacceptable―but he further states that the construction cost has gone up―this seems acceptable to him. Chief Executive, I beg to differ, as the construction cost per square foot rose from $3,000 to $5,000 during the period of the last four years, and every dollar increase will be reflected in the price of our flats.

Dr KWOK Ka-ki was complaining about developers' buying of land. What is the problem of developers buying land as long as the process is legal and transparent? Similarly, there is nothing wrong with his seeing of patients. It is a different way of running business. But the problem of rising flats prices is due to the greediness of the Government―the high land price policy. In every transaction, the Government wants the highest and developers are only there with the high land price policy. They can only produce with rising construction cost and make little profit. So I hope that Dr KWOK Ka-ki should understand this. If he has any problem understanding a simple issue like this, he can talk to me. I am very happy to talk to him and convince him.

The current Supplementary Labour Scheme is not up to scratch as indicated in his 2016 Policy Address. He says: "The Government will review the effectiveness of the enhancement measures under the Supplementary Labour Scheme to ensure the sustainable development of the construction industry." Chief Executive, the construction industry and I have been longing for your favourable reply. We are very short of labour. Just look at the Express Rail Link. One of the major problems that they have encountered is the shortage of labour. Look at Singapore; look at Macao. How have they resolved the problem of development? They have imported labour. And, look at Singapore. Basically, they have as much imported labour as the population. They have contributed to the growth of its Gross Domestic Product and economy.

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President, in an affluent society like Hong Kong, building up a caring society is not incompatible with stress on economic development. A caring society should be distinguished from indiscriminate welfarism which tends to sap individual's responsibility and incentive to work and will result in the erosion of public money. Building up a caring society should be viewed as a reflection of the Government's respect of humanity that an advanced economy should always emphasize. It is unacceptable for the Government to allow 4 000 to 5 000 elderly citizens to die every year while being on the waiting list for a place in a subsidized nursing home. This is a shame to any society like ours.

The SAR Government should take a more proactive approach to building more subsidized residential care homes and allocate more resources to offer timely care for the socially-disadvantaged, such as the elderly and the mentally-challenged. Particularly, efforts should be stepped up to train local caretakers and to speed up importation of labour to fill the manpower gap of the sector, with a view to improving the service quality of these care homes and allowing the elderly and the disadvantaged to live and die with dignity.

President, notwithstanding the efforts of the Chief Executive and this Administration over the past four years, little progress has been made in resolving Hong Kong's deep-seated conflicts. In short, the problems can be boiled down to the problem of governance, as I have indicated so many times in our Public Accounts Committee reports. The weakest link, I consider, lies in the incompetence of the Administration and the self-conceitedness of some of our top officials.

Arguably, the current-term Government is the worst in the history of the Hong Kong Special Administrative Region as far as the handling of executive-legislature relationship is concerned: Communication between the Administration and the Council is abhorrently insufficient. Not to mention lobbying with the opposition camp, the Administration has even failed to communicate and collaborate with the pro-establishment camp effectively. Very often, officials of the incumbent Government take it for granted that, we, the pro-establishment lawmakers, must support the SAR Government and toe its line.

Bureaux and departments, on the other hand, lack cooperation and coordination as exposed in the Wang Chau saga, the lead water incident, the joint consultation of the Securities and Futures Commission and Hong Kong Exchanges and Clearing Limited about the proposed reforms of Hong Kong's LEGISLATIVE COUNCIL ― 15 February 2017 3977 listing policy, and the handling of vacant school premises, to name just a few. It seems that the officials' daily practice is to shirk their duty and responsibility, and to mind their own business and assume responsibility only for matters concerning their own policy areas. How could it be possible for a government to achieve good governance under bureaucracy like this?

Before the handover, Hong Kong used to have very little, if not zero, policy risk in that the colonial Government championed watertight policy planning, the rule of law, free market principles, a level-playing field, a business-friendly environment, and so on. When government policies or initiatives were deviant from these core values, the Government of the day would offer a unanimous tone of explanation to convince the public and minimize the impacts on investors and the society. This helped the colonial Government create a general perception that the Government seemed fair, open, reasonable and predictable.

Arguably, things have become more complex today with the advancement of information technology and rowdy Legislative Council Members that the Government today could hardly use its clout to influence public opinions on issues of major concern. But what makes matters worse is that the SAR Government has even failed to offer a unanimous tone of explanation most of the time.

When it comes to putting forward government policies and funding proposals, while the opposition's destructive filibusters in recent years must be condemned and condemned seriously for the fact that they have actually affected Hong Kong's well-being, ill-prepared officials who tend to answer the legislature's queries in a dribs-and-drabs manner are equally reproachable.

In politics, perception is everything. If the Chief Executive, policymakers and officials are confused and fail to convince themselves, how could the public and investors be convinced that the SAR Government is fair, open, reasonable and predictable?

President, the looming policy risk has been undermining Hong Kong as Asia's world city and an international financial centre. Nonetheless, despite Mr C Y LEUNG's verbosity, his last Policy Address―being the longest one since the handover―lacks practical antidote to this menace, which should be first dealt with by getting rid of bureaucracy and improving governance.

3978 LEGISLATIVE COUNCIL ― 15 February 2017

Some people say that the next Chief Executive should be one who is capable of helping the Government to "put out the fire" (a metaphor which means "to resolve controversies, disputes, or conflicts"). Nevertheless, as the adage goes: "Prevention is always better than cure." Why didn't the Government take every precaution to prevent fire in the first place instead of allowing fire set by the Government itself time and again? So, the ultimate solution lies in tackling the deep-seated bureaucracy that has taken root in the SAR Government over the past two decades.

It will be a considerable time to get rid of bureaucracy. A smooth transition is necessary for facilitating the next Administration to handle this task. Rather than running against the clock to try to achieve as many things as possible, which could risk creating more problems for the next Administration, the Chief Executive should be, in the twilight of his tenure, devoted to alleviating and resolving disputes and conflicts.

President, we can lose confidence, but we cannot lose hope. Hopefully, the concepts of "one country, two systems'', "a high degree of autonomy" and "Hong Kong people governing Hong Kong" enshrined in the Basic Law shall protect us from the depletion of hope, provided that we uphold the Basic Law and our core values.

Thank you, President.

SUSPENSION OF MEETING

PRESIDENT (in Cantonese): I now suspend the meeting. The meeting shall resume at 9:00 am tomorrow.

Suspended accordingly at 9:57 pm.