6.39 Paragraphs 17–28. Universities and Polytechnics. The oversight of a target laid down in 1973 that tuition f should equal at least 12% of recurrent expenditure. The Secretary for Education and Manpower told the Committee that although fees had declined for several years after 1973, there was already an agreed programme of fee increases up to 1988-89. The present trend was therefore upwards: this was a much more satisfactory position. The Executive Council had recently agreed that, commencing in 1989-90, and subject to consultation with the heads of the tertiary institutions, fees would be restored gradually to their historical levels.
6.40 The recent proposal to the Executive Council followed the guidelines contained in the 1978 White Paper that a reasonable share of extended education should be met through fees. The five tertiary institutions had yet to be consulted pending consideration by the Executive Council of a related proposal on the student finance scheme. In the past tuition fees at the universities and polytechnics had not been considered together with those at senior secondary schools. However, there was a relationship between them. In future tertiary fees could well be taken into account when fixing criteria for the level of secondary school fees.
6.41 The Committee noted that from 1981-82 to 1984-85, the proportion of recurrent costs recovered by fees had increased from 3.7% to 4.4% at the University of Hong Kong and from 5.5% to 6% at the Chinese University of Hong Kong. The Secretary explained why it had taken so long for the Government to catch up given that the student finance scheme ensured that no one would be deprived of the chance of tertiary education because of lack of means, and that the policy that a reasonable share of the cost of tertiary education should be recovered through fees. The Secretary agreed that a reasonable share of the costs of extended education should be met through fees. A decision had been taken in 1982 to increase gradually the proportion of costs recovered through fees. Further increases up till 1988-89 had been agreed internally. Larger increases were now proposed beyond 1988–89 to be phased gradually from 1989 to 1994.
6.42 Conclusions and Recommendations. The Committee note that the Executive Council has recently agreed proposals to increase the proportion of costs recovered from students by way of fees and that these proposals will now be the subject of consultation with the five tertiary institutions.
6.43 Nevertheless, the Committee note that prior to the recent submission to the Executive Council, the predicament appeared to be worse than it had been 13 years ago. The Government has fallen still further behind the target it set in 1973 that tuition fees should equal at least 12% of the recurrent expenditure by the universities. Consequently the proportion of recurrent expenditure met by tuition fees is now lower than it was before the introduction of the student finance scheme in 1969. Given that the student finance scheme exists to ensure that no student who is offered a place in a university should be unable to accept that place because of lack of means, the Committee can see no valid reason for the failure to achieve the target.
6.44 The Committee note that in approving the student finance scheme in 1969 it was stated in the Executive Council Memorandum that the Government would ask the university authorities to review their scales of fees and charges to those students who could afford to pay and make what revisions they could with a view to relieving the burden on public funds.
6.45 The Committee further note that the White Paper on the Development of Senior Secondary and Tertiary Education published by the Government in 1978 stated that 'a reasonable share of the cost of extended education should be met through fees, coupled with satisfactory arrangements to provide relief to students from less affluent families'.
6.46 The Committee are therefore concerned that fees have never regained their former proportion to recurrent expenditure, with the result that the more wealthy students have continued to be subsidized unnecessarily at the expense of public funds.
6.47 The Committee recommend that fee income at the universities and polytechnics should equal a greater proportion of recurrent expenditure to ensure that tuition fees do meet a reasonable share of the cost of higher education and that the more wealthy students are not subsidized unnecessarily at the expense of public funds.
6.48 The Committee endorse the philosophy of the Financial Secretary that all the major charges and tax rates which are fixed in cash terms are kept up to date and their yield maintained in real terms. Regular small revisions are the best guarantee of a continuing sound basis for Government's finances. (See paragraph 95 of the 1986-87 budget speech by the Financial Secretary on 26 February 1986.)
6.49 The Committee wish to be kept informed of the progress in this matter.
FINANCE BRANCH
6.50 Paragraphs 35–41. Non-assessment to rates of market stalls in the public markets of the Urban and Regional Councils and in the temporary wholesale markets of the Agriculture and Fisheries Department. The Commissioner of Rating and Valuation agreed that the longer the rating exercise was delayed, the greater the loss to the revenue would be. He said that he had told the relevant policy branches in writing that unless the law was changed his statutory obligation was to assess the market stalls to rates. However, the Commissioner of Rating and Valuation, the Urban Council, the Regional Council and the policy branches had jointly concluded on the basis of social, political and economic factors that the rating of market stalls would have had a detrimental effect.
6.51 The Deputy Financial Secretary did not believe it would have been cost-effective to assess the stalls to rates taking into account that rates were collected at least in part to provide revenue for the Urban Council. The Secretary for
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