be financed in this way. Agreement was reached recently whereby, with effect from 1 April 1986, the TDC will be given an appropriation equivalent to the yield from the levy on domestic exports and imports, and Government will determine, after consultation with the TDC, a list of trade-related activities to be financed out of the re-export levy. If the TDC has insufficient funds from the former appropriation to carry out its activities, Government will support the allocation of funds from the re-export portion of the levy.
5 The Council is satisifed that this new arrangement on funding both ensures sufficient resources for the promotion of Hong Kong's trade, especially domestic exports and also maximizes flexibility and cost efficiency by allowing trade-related activities to be funded out of the re-export parts of the levy.
6 The Government is confident that the Council, with the vast pool of expertise and experience in its members, is fully capable of responding to the needs of trade and industry and managing its resources to achieve maximum benefit for the community. Its ability to launch the International Exhibition Centre project without the injection of additional public funds when more conventional procedures would not have succeeded is ample demonstration of this.
D. STUDENT TRAVEL SCHEME
(Paragraphs 184–192)
Policy
Government first started subsidizing student travel in 1971. Since that time, there have been two major reviews of the policy. The present scheme, which was introduced in 1981, provides for the issuing of travel cards to all students aged from 12 to 25 inclusive who are in full-time education, including first degree University students. The card entitles the holder to travel at concession rates, usually half fare, on transport services provided by the franchised bus and ferry companies, Hong Kong Tramways, MTRC and KCRC. Student concession fares are generally available at any time during weekdays and can be used also on Sundays and school holidays. Grants based on the difference between the student fares and the adult fares, and calculated by reference to a fixed percentage of each operator's total fare income, are paid to transport operators by the Government.
2 The main features of the present arrangements are:
(a) the cost of education of children up to a certain age should be subsidized by concession fares;
(b) the subsidy should be provided by Government from General Revenue;
(c) the scheme should cover all major modes of public transport;
(d) the subsidy is intended also to assist in promoting recreation activities among students; and
(e) the transport operators participating in the scheme should be reimbursed the amount of revenue foregone by
providing the concession fares. The method of payment to operators should be simple to administer.
3 Before Government started subsidizing student travel, student concession fares were provided by some of the public transport operators as part of their fare structure and were financed from their total fare revenue. In 1971, the Kowloon Motor Bus Company decided to withdraw concession fares for students. The Government was concerned that parents should not be suddenly required to bear an extra burden as a result of the abolition of such concession fares. It was decided that subsidized student travel should become a part of the Government's general policy of assistance towards education. The decision also took into account the relatively high cost of travel in relation to the standard fee level of aided secondary schools at that time.
4 The policy of subsidized student travel was reviewed by an inter-departmental working group appointed by the Secretary for Social Services in 1976. That working group recommended that the provision of student concession fares should be discontinued and that assistance should be provided for low income families in meeting the necessary expense of providing children with secondary education, including the location of additional points within the school fee remission scheme in recognition of students' travel cost. The recommendations were subsequently shelved because of the introduction of nine-year compulsory education and the abolition of junior secondary school fees in 1978.
5 In October 1977, in considering action to follow up the Executive Council's decision on compulsory education, the transport difficulties of students living in remote areas were recognized by the Administration and it was agreed that it was not opportune to recommend the withdrawal of the Student Travel Scheme. Instead, it was necessary to consider the possibility of extending the subsidy to other forms of transport, in particular to assist those students who had to travel to school by ferry.
6 Subsequently, the Executive Council decided to abolish all fees and fee-related charges for students in junior secondary forms in the public sector as from September 1978. It was no longer possible to replace the scheme by a text book and stationary grant on the basis of the fee remission scheme; nor was it possible to provide within the fee remission scheme a transport element to give suitable recognition to the travel costs of those students who had to make long trips. In view of these developments and the anticipated strong public objection to a complete withdrawal of the subsidy, the Administration considered that the scheme should continue while consideration was given to alternative ways of providing the subsidy.
7 In 1979, the Administration recommended a new scheme of concession fares to be financed by the transport companies from within their fare structure. In the submission to the Executive Council, it was recognized that the provision of a student travel concession for those aged 12 years and over in one form or other, had come to be expected and accepted by the people of Hong Kong as a part of the overall fare structure of public transport. It was also clearly set out that the essential principles behind the recommendations were:
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