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Legislative Council of the Hong Kong Special Administrative Region Finance Committee Report on the examination of the Estimates of Expenditure 2008-09 July 2008 Finance Committee Report on the examination of the Estimates of Expenditure 2008-09 July 2008 CONTENTS Chapter Page I Introduction 1-2 II Civil Service 3-7 III Constitutional and Mainland Affairs 8-19 IV Communications and Technology 20-28 V Commerce, Industry and Tourism 29-39 VI Financial Services 40-47 VII Public Finance 48-53 VIII Central Administration and Other Services 54-59 IX Administration of Justice and Legal Services 60-67 X Security 68-75 XI Welfare and Women 76-87 XII Labour 88-99 XIII Education 100-108 XIV Housing 109-119 XV Transport 120-131 XVI Home Affairs 132-141 XVII Food Safety and Environmental Hygiene 142-149 XVIII Health 150-162 XIX Works 163-171 XX Planning and Lands 172-179 XXI Environment 180-186 Appendix Page I Programme of the special meetings of the Finance 187-188 Committee II Summary of written and supplementary questions and 189-190 requests for additional information III Attendance of members and public officers at the 191-213 special meetings of the Finance Committee IV Speaking notes of Policy Secretaries 214-279 Chapter I : Introduction 1.1 At the Legislative Council meeting on 27 February 2008, the Financial Secretary of the Hong Kong Special Administrative Region Government introduced the Appropriation Bill 2008. Following the adjournment of the Bill at Second Reading and in accordance with Rule 71(11) of the Rules of Procedure, the President of the Legislative Council referred the Estimates of Expenditure to the Finance Committee for detailed examination before the Bill was further proceeded with in the Council. 1.2 The Finance Committee set up under Rule 71(1) of the Rules of Procedure comprises all Members of the Council except the President. The Committee held 20 sessions of special meetings over five days from 31 March to 3 April and 7 April 2008 to examine the Estimates. The purpose of these special meetings was to ensure that the Administration was seeking a provision no more than was necessary for the execution of the policies of the Government for 2008-2009. 1.3 To facilitate the smooth conduct of business, members of the Committee were invited to submit written questions on the Estimates and a total of 2 733 written questions were received and forwarded to the Administration for replies. Both the hard and the electronic copies of the written replies by the Controlling Officers were forwarded to members prior to the special meetings for reference. The replies can also be browsed at the Council’s website. 1.4 Each session of the special meetings from 31 March to 3 April and 7 April 2008 was dedicated to a specific policy area and attended by the respective Director of Bureau and his/her key Controlling Officers. The schedule of the 20 sessions is given in Appendix I. At the start of each session, the Director of Bureau/Controlling Officer concerned gave a brief presentation on the spending priorities and provisions sought under his/her programme areas. The Chairman then invited members to put questions to the Administration. A full record of the proceedings of the 20 sessions is given in Chapters II to XXI. Questions which were not dealt with and requests for further information were referred to the Administration for written replies after the meetings while broad policy issues raised during the meetings were referred to the respective panels for follow up, where necessary. 1.5 A total of 138 supplementary questions and requests for additional information were referred to the Administration for reply after the special meetings. The majority of the written replies to these questions were forwarded 1 Chapter I : Introduction to members prior to resumption of the Second Reading debate on the Appropriation Bill 2008 on 16 and 17 April 2008. A summary of the number of the questions and additional requests for information is given in Appendix II. 1.6 The attendance of members and public officers at the special meetings is given in Appendix III. The speaking notes of respective Director of Bureaux or Controlling Officers at the special meetings are contained in Appendix IV. 1.7 This report, published in both Chinese and English, is presented to the Legislative Council on 2 July 2008 in accordance with Paragraph 53 of the Finance Committee Procedure. 2 Chapter II : Civil Service 2.1 At the invitation of the Chairman, Miss Denise YUE, Secretary for the Civil Service (SCS), briefed members on the major initiatives and expenditure concerning the civil service for the coming year (Appendix IV-1). Non-civil service contract staff 2.2 Miss TAM Heung-man expressed concern that the terms of employment for non-civil service contract (NCSC) staff were inferior to those for civil servants of similar ranks, and the rates of pay adjustment in 2007-2008 for most NCSC staff, except some NCSC staff in the Department of Health, Food and Environmental Hygiene Department and Social Welfare Department, were lower than that for civil servants, which could create a divisive effect between civil servants and NCSC staff. 2.3 SCS responded that the employment terms of NCSC staff were no less favourable, and could be better in certain aspects, than those stipulated under the Employment Ordinance (Cap. 57). SCS explained that civil servants and NCSC staff were appointed on different terms of employment to meet different needs. Briefly, civil servants were employed as permanent staff of the civil service while NCSC staff were appointed on short-term fixed contract terms. NCSC staff were offered an all-inclusive pay package which did not entail other fringe benefits. The employment packages and pay adjustment mechanism for NCSC staff were distinct from those applicable to civil servants. Given the nature of the NCSC Staff Scheme, Heads of Departments (HoDs) had the discretion to decide whether pay adjustments should be made for their NCSC staff and the level of adjustments. In doing so, HoDs would have regard to a host of considerations, including condition of the employment market, recruitment results, staff retention needs, cost of living, civil service pay adjustment, etc. SCS pointed out that about 90% of NCSC staff received a pay increase in 2007. Most of them (around 70%) received a pay rise of 4% to 4.99%, while another some 15% received a salary increase of 5% or more. Within the latter group, some received a pay increase of over 10%. The pay increase for civil servants in 2007-2008 ranged from 4.62% to 4.96%. About 10% of NCSC staff did not receive a pay increase in 2007, including those in the Registration and Electoral Office who were employed for a period of a few months, and some NCSC staff in the Social Welfare Department and Hongkong Post whose salaries were found to be commensurate with or higher than those for similar jobs in the private sector through salary surveys. 3 Chapter II : Civil Service 2.4 Mr LEE Cheuk-yan opined that the Government had not done enough to provide a family-friendly working environment for NCSC staff. He asked whether guidelines had been issued by Civil Service Bureau (CSB) to all government departments requiring HoDs to provide a family-friendly working environment to NCSC staff, e.g. provision of full-pay maternity leave and 17 days annual holidays for all NCSC staff. 2.5 SCS responded that where operationally permissible, both civil servants and NCSC staff in government departments worked on a five-day week basis. Civil servants and the NCSC staff who worked alongside with them were eligible for public holidays. There were guidelines that the terms of employment for NCSC staff should be no less favourable than those provided for under the Employment Ordinance. Notwithstanding, HoDs had the discretion to offer to NCSC staff terms of employment better than those laid down in the Employment Ordinance having regard to factors such as market situation. 2.6 Mrs Anson CHAN enquired about the number of NCSC positions which would be converted into civil service posts, the time-table for conversion, and whether the Government had set a ratio between the number of civil servants and NCSC staff. 2.7 SCS responded that there was no fixed ratio for the number of NCSC staff vis-a-vis civil servants. NCSC staff were employed for work that was seasonal, time-limited or part-time in nature, or work that was subject to market fluctuation, or the mode of delivery was under review or likely to be changed (e.g. through outsourcing). Based on a review of the NCSC Staff Scheme, which was conducted by CSB in March 2006 jointly with bureaux and departments, it was identified that the work of about 4 000 positions, out of a total of about 16 500 NCSC positions, should more appropriately be performed by civil servants. About 1 300 and 2 500 NCSC positions would be replaced by filling existing and anticipated vacant civil service posts and newly created civil service posts in 2007-2008 and 2008-2009 respectively. 2.8 Mr WONG Kwok-hing expressed concern about the small number of NCSC staff who could successfully transfer to the civil service through the open recruitment exercises. As the Administration had only identified 4 004 NCSC positions for conversion into civil service posts, and there was no "through train" arrangement for the NCSC staff concerned, many of them would lose their jobs. 4 Chapter II : Civil Service 2.9 SCS advised that recruitment of civil servants was an on-going process, and the employment situation of NCSC staff changed from time to time.

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