1 HONG KONG LEGISLATIVE COUNCIL -- 11 December 1991 HONG KONG LEGISLATIVE COUNCIL -- 11 December 1991 1
OFFICIAL RECORD OF PROCEEDINGS
Wednesday, 11 December 1991
The Council met at half-past Two o'clock
PRESENT
THE DEPUTY PRESIDENT
THE HONOURABLE JOHN JOSEPH SWAINE, C.B.E., Q.C., J.P.
THE CHIEF SECRETARY
THE HONOURABLE SIR DAVID ROBERT FORD, K.B.E., L.V.O., J.P.
THE FINANCIAL SECRETARY
THE HONOURABLE NATHANIEL WILLIAM HAMISH MACLEOD, J.P.
THE ATTORNEY GENERAL
THE HONOURABLE JEREMY FELL MATHEWS, C.M.G., J.P. THE HONOURABLE ALLEN LEE PENG-FEI, C.B.E., J.P. THE HONOURABLE STEPHEN CHEONG KAM-CHUEN, C.B.E., J.P. THE HONOURABLE MRS SELINA CHOW LIANG SHUK-YEE, O.B.E., J.P. THE HONOURABLE MRS RITA FAN HSU LAI-TAI, O.B.E., J.P. THE HONOURABLE HUI YIN-FAT, O.B.E., J.P.
THE HONOURABLE MARTIN LEE CHU-MING, Q.C., J.P. THE HONOURABLE DAVID LI KWOK-PO, O.B.E., J.P. THE HONOURABLE NGAI SHIU-KIT, O.B.E., J.P. THE HONOURABLE PANG CHUN-HOI, M.B.E.
THE HONOURABLE SZETO WAH
THE HONOURABLE TAM YIU-CHUNG
THE HONOURABLE ANDREW WONG WANG-FAT, O.B.E., J.P. THE HONOURABLE LAU WONG-FAT, O.B.E., J.P.
THE HONOURABLE EDWARD HO SING-TIN, J.P.
THE HONOURABLE MRS PEGGY LAM, M.B.E., J.P.
THE HONOURABLE MRS MIRIAM LAU KIN-YEE, J.P. THE HONOURABLE LAU WAH-SUM, O.B.E., J.P.
DR THE HONOURABLE LEONG CHE-HUNG
THE HONOURABLE JAMES DAVID McGREGOR, O.B.E., I.S.O., J.P. THE HONOURABLE MRS ELSIE TU, C.B.E.
THE HONOURABLE PETER WONG HONG-YUEN, J.P.
THE HONOURABLE ALBERT CHAN WAI-YIP
PROF THE HONOURABLE EDWARD CHEN KWAN-YIU
THE HONOURABLE VINCENT CHENG HOI-CHUEN
THE HONOURABLE MOSES CHENG MO-CHI
THE HONOURABLE MARVIN CHEUNG KIN-TUNG, J.P. THE HONOURABLE CHEUNG MAN-KWONG
THE HONOURABLE CHIM PUI-CHUNG
REV THE HONOURABLE FUNG CHI-WOOD
THE HONOURABLE FREDERICK FUNG KIN-KEE THE HONOURABLE TIMOTHY HA WING-HO, M.B.E., J.P. THE HONOURABLE MICHAEL HO MUN-KA
DR THE HONOURABLE HUANG CHEN-YA
THE HONOURABLE SIMON IP SIK-ON, J.P.
DR THE HONOURABLE LAM KUI-CHUN
DR THE HONOURABLE CONRAD LAM KUI-SHING THE HONOURABLE LAU CHIN-SHEK
THE HONOURABLE MISS EMILY LAU WAI-HING THE HONOURABLE LEE WING-TAT
THE HONOURABLE ERIC LI KA-CHEUNG, J.P. THE HONOURABLE FRED LI WAH-MING
PROF THE HONOURABLE FELICE LIEH MAK, O.B.E., J.P. THE HONOURALBE MAN SAI-CHEONG
THE HONOURABLE STEVEN POON KWOK-LIM
THE HONOURABLE HENRY TANG YING-YEN, J.P. THE HONOURABLE TIK CHI-YUEN
THE HONOURABLE JAMES TO KUN-SUN
DR THE HONOURABLE SAMUEL WONG PING-WAI, M.B.E., J.P. DR THE HONOURABLE PHILIP WONG YU-HONG
DR THE HONOURABLE YEUNG SUM
THE HONOURABLE HOWARD YOUNG
THE HONOURABLE ZACHARY WONG WAI-YIN
ABSENT
THE HONOURABLE RONALD JOSEPH ARCULLI, J.P. THE HONOURABLE MARTIN GILBERT BARROW, O.B.E., J.P. THE HONOURABLE GILBERT LEUNG KAM-HO
THE HONOURABLE NG MING-YUM
IN ATTENDANCE
MR DAVID ALAN CHALLONER NENDICK, C.B.E., J.P. SECRETARY FOR MONETARY AFFAIRS
MR YEUNG KAI-YIN, J.P.
SECRETARY FOR THE TREASURY
MR JOHN CHAN CHO-CHAK, L.V.O., O.B.E., J.P.
SECRETARY FOR EDUCATION AND MANPOWER
MRS ELIZABETH WONG CHIEN CHI-LIEN, I.S.O., J.P. SECRETARY FOR HEALTH AND WELFARE
MR CHAU TAK-HAY, J.P.
SECRETARY FOR TRADE AND INDUSTRY
MR RONALD JAMES BLAKE
SECRETARY FOR WORKS
MR IAN ROBERT STRACHAN, J.P.
SECRETARY FOR SECURITY
THE CLERK TO THE LEGISLATIVE COUNCIL MR LAW KAM-SANG
Papers
The following papers were laid on the table pursuant to Standing Order 14(2): Subject
Subsidiary Legislation L.N. No.
Dangerous Drugs (Amendment of Fourth Schedule)
Order 1991.............................................................. 432/91
Regional Council Financial (Amendment)
By-laws 1991........................................................... 433/91
Sessional Paper 1991-92
No. 24 -- Hong Kong Housing Authority
Annual Accounts for the year ended 31 March 1991 and
Balance Sheet as at that date
No. 25 -- Report by the Trustee of the
Police Children's Education Trust
Police Education and Welfare Trust
for the period 1 April 1990 - 31 March 1991
No. 26 -- Vocational Training Council
Annual Report 1990-91
Affirmation
MR WONG WAI-YIN made the Legislative Council Affirmation.
Address by Member
Vocational Training Council Annual Report 1990-91
MR STEPHEN CHEONG: Mr Deputy President, laid on the table before this Council is the Report on the Vocational Training Council.
The Council in its past year has done quite a lot of work, especially in relation to the completion of the Vocational Training Tower. We are also to undertake, in relation to His Excellency's pronouncement on the expansion of the tertiary educational sector, to have some of the courses transferred from the polytechnics to the Vocational Training Council in respect of the higher diploma degree studies. For that particular reason, we are going to erect a building in Pok Fu Lam and also we are expanding and renovating the Chai Wan college premises for the new task. We expect to be able to complete the task in conjunction with the polytechnics and therefore help to have the tertiary educational objective achieved by 1994.
Mr Deputy President, definitely there is a place for vocational training in Hong Kong, not only that we are facing a structural change in our economy. The Vocational Training Council is also undertaking to look into the prospects of offering retraining facilities to our existing workforce. We are also mindful of the task that lies in front of us; we are also mindful of the fact that public expenditure has got to be kept at a reasonable level so that other allocation of resources can take priority.
To that extent, the Council as well as the executive staff of the Council would certainly look into every possible means of having a cost-effective operation so as to achieve the twin objective of delivering the training target that we have for the community and doing it in the most cost-effective manner.
I would like to take this opportunity to thank all the Vocational Training Council members as well as the staff of the Council for the wonderful work they have done in the past year.
Thank you, Mr Deputy President.
Oral answers to questions
Control of lead content in drawing paint
1. DR LEONG CHE-HUNG asked: Will the Administration inform this Council whether Government has a safety standard on the percentage of lead content in drawing paint commonly used by school children and whether there is any plan by Government to
introduce some appropriate measures to protect the public, the school children in particular, from the use of drawing paint with a dangerously high lead content?
SECRETARY FOR TRADE AND INDUSTRY: Mr Deputy President, there is at present no statutory safety standard in respect of lead content in drawing paint used by school children.
A Toys and Children's Products Safety Bill is at an advanced stage of drafting. The Bill will set safety standards for toys and children's products offered for sale in Hong Kong, which will include the level of lead permissible in paints used by children. Subject to the Executive Council's advice, I hope to be able to introduce into this Council this Bill, later this Session.
I should add, Mr Deputy President, since the question is with particular reference to school children, that the Education Department, as well as schools, are very concerned about safety precautions in schools, including precautions during art activities. Measures taken by the Education Department on the promotion of safety in art activities include the issue of guidelines to all schools in which safety
precautions in handling toxic materials, including paints, are emphasized.
Following a warning recently issued by the Consumer Council on the high lead content found in a certain brand of powder paint, the Education Department is revising the safety guidelines to strengthen the part on the proper handling of toxic art materials. It is also planning to organize a seminar for art teachers on the subject.
DR LEONG CHE-HUNG: Mr Deputy President, can the Administration inform this Council if there are statistics on lead poisoning in Hong Kong; and, if yes, how many of the instances of poisoning are the result of over-use of unsafe, high lead content paint?
SECRETARY FOR TRADE AND INDUSTRY: Mr Deputy President, I am afraid that there are no separate statistics on poisoning from lead. I understand that the records of the Department of Health show that over the past 10 years one child was killed because of chemical poisoning, and that is the only statistic that we have. But we cannot tell from the records of the Department of Health the source of that chemical
poisoning.
DR HUANG CHEN-YA (in Cantonese): Mr Deputy President, will the Administration inform this Council if there has been any survey on the lead content of paints available in the market? And will the Administration make arrangements to ensure that school teachers know what the symptoms of chronic lead poisoning are so that they can detect them as early as possible if any of their pupils are suffering from the condition and refer them for hospital treatment?
SECRETARY FOR TRADE AND INDUSTRY: Mr Deputy President, acting on a complaint, the Consumer Council recently conducted a test on powder paints which included a particular brand which was found to have exceeded the British standards for lead content. As regards the dissemination of information to school teachers, as I said earlier in my original reply, the Education Department takes this matter very seriously and there are various measures adopted by the Department, including the issuing of guidelines on safety in art activities to all primary and secondary schools and organizing annual seminars on safety precautions for primary and secondary school art teachers; toxicity in paint is one of the topics discussed in these seminars.
The Education Department also issues circulars at the beginning of each school year to remind schools of safety precautions in conducting art activities. The Education Department also advises art teachers during school visits and inspections to teach children the importance of personal hygiene and not to use paints identified as
hazardous to health.
PROF FELICE LIEH MAK: Mr Deputy President, in addition to having the Consumer Council monitor and test the materials used by children, will the Administration inform this Council of any further means by which the Government can monitor the lead content of toys and related materials?
SECRETARY FOR TRADE AND INDUSTRY: Mr Deputy President, at present, in the absence of legislation, we are relying mainly on the regular testing done by the Consumer Council. But as I said in my original reply, I hope to be able to introduce into this Council later this Session a Bill on the safety aspects of toys and children's products; under that Bill, if it becomes legislation, the Government will be able to require manufacturers or suppliers to recall products which are unsafe for
children.
MR JIMMY McGREGOR: Mr Deputy President, would the Government confirm that Hong Kong has had problems with lead in paint on toys made here and exported to other countries since the early 1960s and that the Government has operated a protective system of checking and testing for such toys since the early 1970s? And will the Government extend this system in due course to tests on paints used on toys sold in Hong Kong, both made here and imported from abroad? And will there be legal penalties for
offenders?
SECRETARY FOR TRADE AND INDUSTRY: Mr Deputy President, I can confirm that testing is done in Hong Kong on the lead content in paint used in toys. Under the proposals now being considered within the Administration, we do not intend to require the testing of all toys; we would rather be acting on a complaint basis and on the basis of spot checks so that we could conduct tests in cases where there are complaints.
DR LAM KUI-CHUN: Mr Deputy President, the level of lead toxicity in a given individual or population, such as children, can be easily checked by testing for its urine level. Has the Government any plans to test for this, just to make sure that our population of children is not yet affected by lead poisoning?
SECRETARY FOR TRADE AND INDUSTRY: Mr Deputy President, I am afraid that I am not in a position to answer that question, but perhaps my colleague, the Secretary for Health and Welfare, might be in a better position to do that.
SECRETARY FOR HEALTH AND WELFARE: Mr Deputy President, no.
DR LEONG CHE-HUNG: Mr Deputy President, is the Administration aware of two studies commissioned by a group known as The Friends of the Earth in 1988 and 1990? The first study showed that 5% of Hong Kong children tested had high levels of lead in their milk-teeth, and the second study showed that certain children's water-colours and poster paints have unsafe lead content. Has any action been taken by the
Administration?
SECRETARY FOR TRADE AND INDUSTRY: Mr Deputy President, I am afraid that I personally do not have any knowledge of those reports. But I am sure that the Administration must have knowledge of those reports and I will try and seek the assistance of the relevant colleague of mine who is dealing with the subject to provide a written reply. (Annex I)
Reduction of welfare expenditure
2. MR FRED LI asked (in Cantonese): Mr Deputy President, in the light of the Secretary for Health and Welfare's advice to the OMELCO Panel on Welfare Services that welfare expenditure will be reduced by 1% to 2.6% in the next three years, will the Government inform this Council:
(a) what the reasons for the proposed reduction and the criteria adopted in determining the scope of the proposed reduction are;
(b) whether there are plans to reduce any specific areas of welfare expenditure; and
(c) whether the welfare sector will be consulted on any revisions to the commitment in the White Paper on Social Welfare regarding welfare expenditure?
SECRETARY FOR HEALTH AND WELFARE: Mr Deputy President, the fundamental principle governing the planning and control of public expenditure is that, over a period of time, the growth rate should be no greater than the trend growth rate of the economy, as measured by the Gross Domestic Product (GDP). The forecast trend growth rate of GDP has been revised from 5.5% to 5%. Accordingly, the guideline growth rates in real terms for recurrent and capital expenditure have been adjusted from 4.5% p.a. and 7.5% p.a. to 4% p.a. and 7% p.a. respectively for the next few years.
This, quite clearly, does not mean that overall there are "cuts". The Government is planning for real growth in public expenditure. Recurrent expenditure on social welfare is expected to increase in real terms by about 16% over the next four years. However, Branch Secretaries have been asked to identify modest savings on existing services so that more funds can be made available for new services. The savings targets are 1%, 2.2% and 2.6% of the total baseline of the individual Policy
Secretaries' programme areas for 1992-93, 1993-94, 1994-95 and 1995-96 respectively. The main criterion used in identifying savings in my programme area is to effect economies in the way services are delivered, but not to withdraw services which are provided in accordance with existing policies.
As regards the second part of the question on savings, for 1992-93 we will no longer recognize, for subvention purposes, one post in each children and youth centre or community centre with a study/reading room. Additionally, corresponding measures will be taken to delete one post from each of Social Welfare Department's Group Work Units. There are other incidental savings arising from minor managerial
adjustments.
As regards the third part of the question, the Social Welfare Advisory Committee will be consulted on any revisions to the policies implicit in the White Paper on Social Welfare into the 1990s and Beyond.
MR FRED LI (in Cantonese): The Secretary has mentioned in her reply that the savings will be used for new services. But it has been the normal practice that social welfare expenditure on new services is planned and budgeted for in the five-year forecast. Moreover the annual expenditure on social welfare services should be reflected in the Budget Estimates. Therefore I do not understand why from 1992 onwards, cuts will be made each year to make funds available for the so-called new services.
DEPUTY PRESIDENT: Would you like to put that in the form of a question, Mr LI?
MR FRED LI (in Cantonese): My question is why from 1992 onwards, cuts on existing services will be made annually to finance new services. I do not understand why this procedure is adopted since new services were in the past provided for in the Budget Estimates.
DEPUTY PRESIDENT Mr LI, you have stated your state of knowledge but you have not asked a question.
MR FRED LI (in Cantonese): Why is it that there is a change in the way funds are allocated?
SECRETARY FOR HEALTH AND WELFARE: Mr Deputy President, perhaps I should explain that hitherto and perennially every year, the Director of Social Welfare, as with other department heads, has been asked to identify areas where economies can be made. But so far, except for this year, the department has borne the brunt of the savings
measures and this is the first time that the subvented sector has not been cushioned from the savings effect. The Administration is firmly of the view that in this particular case whether a centre cum study reading room is run by 9 or 11 or 13 people is basically a question of achieving economies. It is a management and utilization of resources issue and it does not alter either the funding mechanism or the policy that such a centre should provide counselling and outreaching services. The decision on how to adjust to the reduction in subvention for the centres in question is basically one for the operating agencies, and they have a number of options, including
greater flexibility, integration of service, redeployment of manpower elsewhere. And I need to stress, in this particular case, that there will be continued subvention on rent and rates and on clerical assistant posts for the study and reading room. And in the consultation process the Director of Social Welfare will be happy to discuss with individual agencies any practical areas where there might be some advice needed on achieving savings.
MR ERIC LI: Mr Deputy President, the Financial Secretary has stated in successive Budget speeches that the effectiveness of public expenditure should be measured by the value for money. Clearly, value for money implies an assessment of the quality and the effectiveness of services delivered, as well as services delivered in quantity terms. In the present reply, the main criterion used is simply to effect economies. Can the Administration inform this Council whether or not it still regards the quality and effectiveness of services as the key criteria in considering public expenditure?
SECRETARY FOR HEALTH AND WELFARE: In my main reply I did use the words "main criterion". Of course there are other associated criteria, such as the maintenance of the energy of service, and the quality of service.
MR TIK CHI-YUEN (in Cantonese): Mr Deputy President, the Secretary has just mentioned in her reply that savings from the cuts in welfare expenditure will be used to finance new services. Will the Administration inform this Council what new services will benefit from these savings in the next three years?
SECRETARY FOR HEALTH AND WELFARE: Yes, Mr Deputy President. In contrast to the saving of some $15 million, we have been given -- so I understand from the Secretary for the Treasury -- $44.3 million in 1992-93 to meet partly the operating costs of new projects, with a full-year extension effect of about $89 million in provision.
Amongst the new services to be provided the major ones include -- if I might just rattle off some of the major ones:
1 400 day nursery places,
80 foster care places,
eight home help teams,
six small group homes,
527 residential places for the elderly,
seven social centres for the elderly,
one multi-service centre for the elderly,
nine youth centres,
eight children's centres,
60 early education and training places,
640 sheltered workshop places,
420 day activity centre places,
457 hostel places for the disabled.
And that is only for 1992-93; we have yet to confirm the figures for the ensuing years.
MISS EMILY LAU (in Cantonese): Mr Deputy President, in the third paragraph of her main reply, the Secretary mentioned that decision had been made to delete one post from each of the Social Welfare Department's Group Work Units. Could I ask whether voluntary agencies had been consulted before the decision was made? If not, has this set a precedent whereby consultation with voluntary agencies will, under whatever circumstances, no longer be necessary in the future?
SECRETARY FOR HEALTH AND WELFARE: Mr Deputy President, there appears to be considerable confusion about consultation, or the lack of it, in this particular case. I wish to point out that the Social Welfare Department first initiated consultation with the Hong Kong Council of Social Service and the non-governmental organizations. It is, I understand, as a result of this consultation that we have had the expressions of unhappiness from the non-governmental organizations, and hence this question in this Council today. Non-governmental organizations are therefore consulted over practicalities of the savings measure. In the consultation process, the Director of Social Welfare has, I understand, offered to discuss with individual agencies, and offered assistance on areas of practicalities in the savings measure.
I should also add that we intend to discuss the subject with the newly formed Social Welfare Advisory Committee at the first available opportunity which is next Monday. Earlier consultation with the newly formed Social Welfare Advisory Committee was neither practicable nor opportune.
DR YEUNG SUM (in Cantonese): Mr Deputy President, the Secretary mentioned that the Government's annual savings target was 1%. That would include all government departments. Would the Secretary not agree to the view that the overall savings should be used to finance social welfare services, the provision of which is basically for the lower stratum of our society?
SECRETARY FOR HEALTH AND WELFARE: My heart is, of course, with the social welfare services. But I must say that in accordance with the savings target of 1%, 2.2%, and 2.6% on the baseline figure, as I mentioned in the main reply, in respect of the social welfare and health programme sector, we are a long way away from fulfilling the savings target. So it is a continuing exercise and I am still trying. But one of my main criteria, which I have hitherto adopted, is not to affect the delivery of service to the extent that it might cause reduction in service, as I so put it in my main reply.
REV FUNG CHI-WOOD (in Cantonese): Mr Deputy President, could the Secretary inform this Council of the criteria in determining the types of social welfare services where economies can be made either in terms of staffing or other operation costs? Why the target this time is youth centres instead of other services?
SECRETARY FOR HEALTH AND WELFARE: I do not pretend, Mr Deputy President, to have any monopoly over ideas and I would welcome any fresh ideas as regards savings. But with regard to the question as to why we single out the study room within the student youth centres, I think it can briefly be said that we regard that as the least painful and the most cost effective; and it also lends flexibility to the deployment of staff so that the study rooms can continue to be serviced, although people probably have to be redeployed and reschedule their jobs. But if there is any difficulty with regard to implementation, or the practical aspects of implementation, the Director of Social Welfare will be very happy to discuss it.
MR PETER WONG: Mr Deputy President, will the Secretary inform this Council what steps are taken in the Social Welfare Department and the welfare agencies that waste and inefficiencies are kept to a minimum; and whether those who make economies are
recognized or rewarded?
SECRETARY FOR HEALTH AND WELFARE: We leave it very much to the ingenuity and also the goodwill of the agencies themselves. In accordance with the White Paper on social welfare, we work in good partnership. A partnership means give and take; there may be moments of ups and downs but at least one is given the freedom of operation, as reflected in the White Paper on Social Welfare into the 1990s and Beyond. Turning to the relevant page in the White Paper, I would like to share with Members the
paragraph on the manner of operation by agencies. It says, on page 41, under Support Services, Subvention and the Financial Arrangement for Social Welfare, that the policy in principle is:
"Government will provide adequate financial support to certain non-governmental organizations for the implementation of identified social welfare services."
But it is up to the non-governmental organizations to ensure that they have freedom of movement so they are
"free to supplement subventions from other sources and have a degree of flexibility in the deployment of resources."
Budgeting for capital works projects
3. MR DAVID LI asked: Will the Administration inform this Council if it will consider implementing fixed-cost budgeting, or lump-sum contracts on a turn-key basis, for the Government's Capital Works Projects?
SECRETARY FOR WORKS: Mr Deputy President, a fixed-price contract that is to say, a contract that has no provision for price fluctuations, allows the Government to fix the cost of the project at the time when work begins. A lump-sum contract similarly allows the fixing of cost at the time of award but in this case against a clearly defined scope of works. Fixed-price lump-sum contracts therefore allow a greater degree of certainty in budgeting, and for this reason we are using this type of
contract for the major component projects of the Airport Core Programme. These projects involve very large contract values and very demanding work schedules. By
awarding such contracts we will improve financial certainty, and enable the Government to have available the strongest possible means to ensure that contractors achieve completion by the contractual dates.
Government's Capital Works Projects involving contracts of 12 months or less are also fixed-price. Those which are of a civil engineering nature are usually remeasured, and not lump-sum, because of the nature of the works. Architectural contracts have less unknowns, and are often more standardized, and are usually let on a lump-sum basis. Provision can be made for varying the scope of lump-sum or remeasurement contracts.
Capital Works Projects involving contracts longer than 12 months are usually inflation linked with the payment of index-related price fluctuations. They may be remeasured or lump-sum, as the circumstances in each case best demand. Inflation consideration is balanced against the lesser contract values involved.
Turn-key contracts or, more exactly, Design and Build contracts, are used when circumstances clearly show that contractors' methods of construction taken into account during design of the permanent works, will be cost advantageous to Government. Design and Build contracts are awarded on a lump-sum basis, and may also be fixed-price.
In summary, Mr Deputy President, the adoption of contracts incorporating provision for fixed-price, lump-sum or Design and Build, is given consideration on an individual basis. There are no hard and fast rules. The practice is that the Government will, depending on the nature, size and timing of the project, determine the type of contract that will achieve the best value for the public money spent.
MR DAVID LI: Mr Deputy President, what legal recourse will the Government have should a contractor attempt to default on a fixed-price contract awarded on a lump-sum basis?
SECRETARY FOR WORKS: Mr Deputy President, there exists the same legal recourse as applies to any contract, whether it is fixed-price lump-sum. There are provisions inside each contract document, by way of binding obligations, which are of a legal basis.
MR STEVEN POON: Mr Deputy President, I am referring to the third paragraph of the Secretary's reply. Can the Administration tell us what these project price indices are; who the authority is who fixes these indices; and how they are fixed?
SECRETARY FOR WORKS: The indices, Mr Deputy President, are gathered by government departments and are fed back and then inserted into a formula which has been decided by Government and has been used for many years on price related government contracts. The indices are kept up to date on a monthly basis by way of information that is gathered from the various construction projects themselves, fed back, and inserted into the indices. The indices are then available when the contracts are tendered for and the relevant index for each tender is set at the time of award of the contract. Any subsequent fluctuation calculations are then made by reference back to that index.
DR SAMUEL WONG: Mr Deputy President, as the new airport at Chek Lap Kok and its 10 core projects are principally civil engineering in nature, which according to the Secretary for Works are usually remeasured, why then does Government now contemplate adopting fixed-price contracts, since tenderers will invariably overestimate in
their bids and it will cost the Government, and hence the taxpayer, more than it should?
SECRETARY FOR WORKS: Mr Deputy President, the basis or the reason for the decision to use lump-sum fixed-price contracts for the airport projects has been explained on many occasions thus far; it is a lengthy subject. However, the primary reason is that the fixed-price and lump-sum gives the certainty of cost at the time of award. So far as lump-sum and remeasurement is concerned, this depends very much upon the nature of the works, and there are indeed some of the projects within the airport core programme that will be remeasured to varying extents. The actual extent will depend upon the nature of the work for each contract.
MR ERIC LI: Mr Deputy President, it seems to me that contractors working under fixed-price contracts are more prone to failure or default. This is because they lack flexibility in negotiating for price in the case of bad management or bad planning. Can the Government inform this Council what measure it will take to safeguard the public interest in the event that that happens?
SECRETARY FOR WORKS: Mr Deputy President, the use of fixed-price contracts and/or lump-sum is not unusual in Hong Kong. It has been commonly employed on many large projects in the private sector, without contractors going into default. The contractors that we are asking to price on this basis have all been very carefully selected through a prequalification exercise. The Government is satisfied that within their estimating capabilities they have the necessary expertise to determine the risks that they are taking and to make proper allowances for that inside their tendered price. It also goes without saying that during the post-tender receipt and the analysis of tenders, our professionals within the Administration will give due consideration to the manner in which the pricing is put together; and if there is any suggestion that areas have been underpriced that will put the subsequent contract at risk, these are brought to the attention of that particular tenderer at the time, and they will be taken into account before the final award of each contract.
MR ALBERT CHAN (in Cantonese): Mr Deputy President, will the Administration inform this Council whether it will take into account the views of the contractors before deciding on a fixed-price contract? What measures will the Administration take should international construction companies launch a boycott against the projects; and will the price and progress of the large-scale projects be affected if such companies really go for a boycott?
DEPUTY PRESIDENT: There are two hypotheses there, Secretary for Works. If you feel you are not able to answer with precision, I will not put the question to you.
SECRETARY FOR WORKS: Thank you, Mr Deputy President. But perhaps from my background and from contacts, I can give the necessary assurance that we have been in contact with the Hong Kong Construction Association and we have given a reasoned explanation which has been accepted by them. We are quite sure that we will get satisfactory tenders for the projects when they are up for bids.
MR JIMMY McGREGOR: Mr Deputy President, are the criteria used in determining which projects are appropriate for fixed-priced contracts set out in a standardized form?
If not, at what level is the discretion to decide on one type or another?
SECRETARY FOR WORKS: Mr Deputy President, so far as the airport core projects are concerned, this is at the very highest level of Directors or above. As far as other contracts within the ordinary Public Works Programme are concerned it would still be made at the Director level, if necessary in consultation with my Branch.
MR FREDERICK FUNG (in Cantonese): Mr Deputy President, in formulating the construction programme, has the Government considered adopting the international construction standard ISO 9000 as the basic criterion which all contractors are expected to meet? If yes, will the adoption of such a criterion push up the cost and make government's budgetting more difficult?
SECRETARY FOR WORKS: Mr Deputy President, ISO 9000 of course is a document which determines how quality control measures should be applied to any production process. So far as our contracts are concerned, we do have very detailed specifications which apply to each contract. During the actual contract process the supervisory teams also require the contractor to submit detailed method statements for approval before the actual implementation of the works. And of course there is also a very rigorous regime of testing of the basic materials -- concrete, reinforcement and the like. All of this is generally in accord with the highest standards of ISO 9000. We have not mentioned ISO 9000 in the specification because, as I have said, most of the basic requirements are already covered. Independently, my Branch are examining ISO 9000 and its further application throughout the whole of the design process.
MR STEPHEN CHEONG: Mr Deputy President, can the Administration assure this Council that it does not take the decision lightly to implement a fixed-price contract, and that the decision, whatever way it is taken, has been taken not just by the Administration itself but also together with professional input of the highest calibre from consultants?
SECRETARY FOR WORKS: I can give that assurance, Mr Deputy President. The Administration takes these decisions only when a full professional team has evaluated
the circumstances and the risks involved.
Written answers to questions
Conformity of draft Bills with Hong Kong Bill of Rights Ordinance
4. MR JIMMY McGREGOR asked: Will the Government ensure that all Bills introduced into the Legislative Council, and all draft Bills published for public consultation have been prepared to conform fully with the provisions of the Hong Kong Bill of Rights Ordinance and will the Government attach a statement to each Bill to this effect?
ATTORNEY GENERAL: The Government already endeavours to ensure that all Bills introduced into the Legislative Council, and all draft Bills published for public consultation, have been prepared to conform fully with the provisions of the International Covenant on Civil and Political Rights as applied to Hong Kong as required by the amended Letters Patent in Article VII (3).
It is not considered appropriate to attach a statement to each Bill stating that it has been prepared to conform fully with the provisions of the Covenant.
The Letters Patent specifically require that all legislation must comply with the Covenant. This is a provision of general application in Hong Kong. When a Bill is introduced into the Legislative Council it necessarily follows that the Administration is satisfied that it complies with the Covenant.
Volume of new legislation
5. MR MARTIN BARROW asked: In the light of the need to regulate the volume of new legislation for introduction into the Legislative Council, will the Government inform this Council:
(a) how many pieces of new legislation are being drafted;
(b) how many existing Ordinances are under review for possible amendment; (c) how many of the above new pieces of legislation and amendments are to be
submitted to the Legislative Council by July 1992; and
(d) how many proposals for new legislation have been approved and rejected by the Chief Secretary's vetting committee since its inception?
CHIEF SECRETARY:
(a) Thirty-one new legislative proposals (that is, new Ordinances) are at various stages of drafting. The majority of them are intended to be introduced into the Legislative Council during the 1991-92 Session.
(b) It is not possible to give a precise number of the existing Ordinances under review for possible amendment because the proposals are at different stages of processing and some of them have yet to be given policy clearance. However, a useful indicative figure would be the number of Amendment Bills being drafted and the figure is 142.
(c) A total of 89 legislative proposals (that is, new Bills and Amendment Bills) have so far been given priority by the Legislative Priorities Committee for introduction into the Legislative Council in the 1991-92 Session. Twenty-one Bills have already been introduced into the Council. The actual total number of Bills that will be submitted to the Council by July 1992 will depend on the drafting progress of the Bills and whether there are any urgent legislative proposals outside the approved programme that may need to be introduced into the Council within this Session.
(d) So far about 50 legislative proposals have not yet obtained priority for introduction into the Legislative Council in the 1991-92 Session, having regard to their urgency and stage of processing. They will be reconsidered for introduction in the next (that is, 1992-93) Session, or when there is a vacant slot in the current Session's programme. The Legislative Priorities Committee will monitor the drafting programme and will adjust it where necessary to ensure an even flow of legislation into the Legislative Council.
Allocation policy of Housing Authority
6. MR LAU CHIN-SHEK asked: Will the Government inform this Council:
(a) whether it has any knowledge of the Housing Authority's plan to convert Block 22 of Tung Tau Estate into one/two person flats, and what its details are;
(b) whether it will ask the Housing Authority to stop moving elderly or single persons and two-person families into such old buildings with inadequate facilities; and
(c) whether it will ask the Housing Authority to increase the proportion of one/two person flats in newly built public housing estates (currently accounting for only 7% of total production)?
SECRETARY FOR PLANNING, ENVIRONMENT AND LANDS: Mr Deputy President, I am advised that the refurbishment of Block 22 at Tung Tau Estate is one of several options currently under consideration by the Housing Authority to meet the demand for accommodation for small households. This follows an in-depth assessment of the supply and demand for such accommodation in the middle of this year. I am further advised that the proposal to retain this block for this particular purpose will be considered by the Authority's Building Committee this month. The various ways of increasing the supply of small household accommodation, including the possible retention of this block, are still under consideration.
As regards the second part of the question, the flats in the block all have self-contained facilities; and subject to a decision to proceed, they will be suitably upgraded to provide satisfactory accommodation. The Authority would not move elderly, one or two-person families into buildings with inadequate facilities.
Concerning the third part of the question, the Authority is also studying ways to increase the supply of self-contained, one-person flats in its new production. This will be one of the measures to be considered in the next two months. I hope it will be appreciated that the Authority has a responsibility to use all its stock in an effective manner, both new and old.
Provision of public housing in Tai Po and North Districts
7. REV FUNG CHI-WOOD asked: Will the Government inform this Council:
(a) whether the Administration has drawn up any programmes for the construction of public housing and home ownership estates in Tai Po and North Districts in the coming six years; if so, whether details of the dates of completion and occupation as well as the number of residents to be housed in these estates could be provided; and
(b) whether the Administration has any plans to cater for the needs of the increasing population in these areas with regard to transport, medical services, education, and other necessary facilities?
SECRETARY FOR PLANNING, ENVIRONMENT AND LANDS: Mr Deputy President, the Housing Authority's public housing development programme will provide, between 1991-92 and 1996-97, a total of 24 301 flats in Tai Po and North Districts, of which 8 514 are for rental and 15 787 for home ownership. They provide housing for about 74 600 people. Details of their estimated project completion dates are annexed. Normally, population intake upon project handover takes about two to six months to complete.
The provision of transport and community facilities and services for Tai Po and North Districts has been generally based on the population growth forecast and implemented according to a development programme that is compatible with the overall growth of the economy.
The major highways projects in Tai Po and North Districts are basically complete. With the opening of the Tate's Cairn Tunnel and the entire Route 6 (between the Tolo Highway and the Eastern Harbour Crossing) earlier this year, the road links now in place should be adequate to meet demand for traffic between Northeast New Territories and the metropolitan areas up to the last quarter of the 1990s. The section of the New Territories Circular Road linking Sheung Shui with Yuen Long is near completion. Its planned opening in mid 1992 will improve traffic flow between Northeast New
Territories and Northwest New Territories. Internal roads within these two districts will continue to be built to cope with development needs.
The KCRC has invested heavily on additional train carriages since 1988 in order to cope with anticipated population growth in areas served by the Kowloon-Canton Railway. Since June this year, all KCR trains carry 12 carriages. By September 1993,
the KCR fleet will have expanded its carrying capacity by 53% relative to 1989. For the longer term, a comprehensive review of the signalling system is being conducted to explore ways for improving operating efficiency and to further enhance capacity.
The Kowloon Motor Bus Company's latest five-year plan will see the number of buses serving Tai Po and North Districts being increased from some 280 vehicles to about 330 vehicles between 1991 and 1996, and the wider use of high-capacity three-axle double-deckers. Details regarding bus service development will be the subject of an annual district board consultation exercise.
With regard to medical facilities, Secretary for Health and Welfare gave a detailed reply to a question relating to the provision of medical and health services in Tai Po and North Districts in this Council on 17 October 1991 and I have nothing to add.
Provision of education facilities has been following the School Building Programme prepared by the Education Department. Two primary and four secondary schools have been completed in the last few months. Three primary and six secondary schools will be built in the coming six years.
Welfare and community facilities planned for the coming six years include one neighbourhood community centre, one rural centre, three day nurseries, one small group home, one children and youth centre, two family services centres, one early education and training centre, one special centre for the elderly, two day care
centres for the elderly, one multi-service centre for the elderly, one home cum care and attention unit for the elderly, one day activity centre for the mentally handicapped and two hostels for the disabled.
Projects for other necessary services such as police station, fire stations and ambulance services have basically been completed. Regarding recreation and cultural facilities for the coming six years, a cultural complex has been planned for in Tai Po. There will also be seven district open space projects in the North District, and five in Tai Po. A number of local open space projects will be implemented in various parts of the districts. In brief, both Tai Po and North Districts will be self-sufficient in all necessary facilities and services upon the completion of the planned development projects.
Annex
Details of Estimated Completion Dates for Public Housing Projects in Tai Po and North Districts*
1991-92 1992-93 1993-94 1994-95 1995-96 1996-97
No. of flats (population)
(I) Rental
1. Tai Po Area 6 1 870 816
(Wang Tau Tong) (5 977) (2 995)
2. Tai Po Area 8 2 662
(Fu Heng) (8 840)
3. Fanling Area 39A 1 804
(6 869)
4. Fanling Area 47B 1 362
Phase 1 (4 727)
1991-92 1992-93 1993-94 1994-95 1995-96 1996-97
No. of flats (population)
(II) HOS/PSPS
1. Tai Po Area 6 1 224 816
(Wang Tau Tong) (3 624) (2 383)
2. Sunningdale 830
Garden (Fanling (2 424)
Area 7)
3. Tai Po area 17 1 750
(Yee Nga Court) (5 040)
4. Tai Po Area 6 700
(King Nga Court) (2 044)
5. Fanling Area 46 2 450
(Yan Shing Court) (7 056)
6. Fanling Area 18 1 780
(Site A) (5 055)
7. Fanling Area 39A 2 432
Phase 2 (6 908)
8. Fanling Area 47B 681
Phase 1 (1 910)
Phase 2 1 824
(5 106)
9. Fanling Area 18 1 300
(Site B) (3 640)
Total 6 586 6 532 4 212 1 804 5 167
(20 865) (19 518) (11 963) (6 869) (15 383)
( ) population
* position as at September 1991; programme subject to change
Telecommunications policy
8. DR SAMUEL WONG asked: Will the Government inform this Council of the present position regarding the review of telecommunications policy, including the target date for completion of the review and whether the public will be consulted, and if so, at what stage?
SECRETARY FOR ECONOMIC SERVICES: Mr Deputy President, I expect the current review of telecommunications policy to reach conclusions in the early part of next year. Our aim is to establish a sound regulatory framework in which a diverse range of telecommunications services can develop at competitive prices -- both in the
interests of domestic and business consumers and in order to support Hong Kong's role as a major regional and international centre of trade and finance.
It is the intention to seek the views of Legislative Councillors before final decisions are taken on the outcome of the review.
Scheme of Control Agreement of Hong Kong Telephone
9. MR STEVEN POON asked: It is understood that the Scheme of Control Agreement of the Hong Kong Telephone Company expired on 31 March 1991 and a replacement scheme is not yet in place. Will the Administration inform this Council:
(a) how the interests of telephone users in Hong Kong are protected in the absence of a Scheme of Control Agreement with the Telephone Company;
(b) whether the Telephone Company is now under any control at all other than the provisions of the Telephone Ordinance; and
(c) whether the Government intends to conclude a new Scheme of Control Agreement with the Telephone Company; and if so, what the time scale is?
SECRETARY FOR ECONOMIC SERVICES: Mr Deputy President, the absence of a Scheme of Control Agreement does not mean that Hong Kong Telephone Company tariffs are no longer subject to control. Under section 26 of the Telephone Ordinance the maximum charge
for services provided by the Company can only be increased by resolution of the Legislative Council to amend the Schedule to the Telephone Ordinance. The Administration will not support amendments to the Schedule unless it is satisfied that these are fully justified.
The interests of telephone users are also protected in other ways. For example, under section 22 of the Telephone Ordinance, the Telecommunications Authority (the Postmaster General) is empowered to ensure that the Company maintains a good and efficient service. Section 4A of the Ordinance provides for the appointment of two government directors to the board of the Company who have a statutory obligation to represent Government, and hence the public interest.
The Hong Kong Telephone Company declined to renew the previous Scheme of Control Agreement when it expired in March 1991, and made clear that it would favour price-capping rather than profit control as a replacement. This option is one of a number of regulatory issues being considered in the context of the current review of telecommunications policy, I expect to reach conclusions early in the new year.
Expansion programme for Kai Tak Airport
10. MR LAU WONG-FAT asked: In view of the fact that the expansion programme for Kai Tak Airport will cost more than $1 billion and a replacement airport will be in place in a few years's time, will the Government inform this Council:
(i) whether the Administration, in carrying out the above expansion programme, will give consideration to the use of less costly materials and designs on condition that the operational safety of the airport will not be affected, so as to avoid stretching the resources of Hong Kong; and
(ii) whether the Administration will carry out a review to assess the need to scale down or cancel certain projects of the original expansion programme?
SECRETARY FOR ECONOMIC SERVICES: Mr Deputy President, the purpose of the programme of improvements to facilities at Kai Tak is to ensure that our airport can cope with the expected continuing growth in passenger and cargo traffic up to the opening of the new airport at Chek Lap Kok. On present estimates, passenger throughput is
expected to increase by 10% per annum and cargo by 8% per annum.
Since its inception in 1988 the programme has been reviewed regularly in the course of the annual resource allocation exercise. As a result, some less essential projects have been deleted or their scope reduced. The present package of measures includes only those projects considered absolutely necessary to ensure the continuing efficient operation of the airport bearing in mind its limited life. These include: the extension of the airport apron area to provide more aircraft parking bays,
improvements to the terminal building, construction of a taxiway bridge to facilitate aircraft movement on the apron area and improvements to road access leading to the airport.
The design and specifications of individual projects have also been examined critically to ensure that the most cost-effective designs and materials are utilized without compromising standards of operational safety. This approach has already led to substantial reductions in the estimated cost of some items.
Payment of wages to imported workers
11. MR LAU CHIN-SHEK asked: Regarding the Administration's recent proposal that employers engaging foreign workers under the 1989 and 1990 Importation Schemes should, as a standard practice, effect payment of wages by autopay, will Government inform this Council:
(a) how many employers have so far accepted this proposal, and what concrete measures will be taken to ensure that it will be accepted by all companies employing workers from overseas;
(b) what other practicable measures will be adopted to ensure that the wages of foreign workers will not be deducted if some employers still refuse to effect payment of wages by autopay; and
(c) what measures will be taken by the Government to prevent employers from deducting the wages of foreign workers after autopay?
SECRETARY FOR EDUCATION AND MANPOWER: Mr Deputy President, the Administration's
recent proposal is to make the payment of wages by autopay a condition for importing workers under any new scheme which might be introduced. Such a condition did not apply under the 1989 and 1990 Importation Schemes. However, the Labour Department has been taking steps to persuade and encourage employers who have imported workers under the 1989 and 1990 Schemes to effect payments of wages by autopay on a voluntary basis.
The answers to Mr LAU's specific questions are as follows:
(a) As at 9 December 1991, 2 084 employers were employing imported workers under the 1989 and 1990 Schemes. During the three months September to November 1991, 1 664 of these establishments were inspected by the Labour Department and 338 (that is, 20.3%) were making payment of wages through banks.
(b) The Labour Department has advised the other employers orally and in writing to pay wages by autopay. Where there are reasons to suspect that an employer may have deducted workers' wages unlawfully, enforcement action will be taken under existing law. Consideration will also be given to debarring those employers who have been found to have deducted wages unlawfully from participating in future labour importation schemes. At the time of application for visa extension for imported workers (upon completion of one year's service), the Director of Immigration will require employers to certify that wages as stipulated in the employment contracts are being paid. Provision of false information is liable to a maximum fine of $50,000 or 14 years' imprisonment under the Immigration Ordinance. Action is also in hand to increase the penalties for unlawful deduction or underpayment of wages under the Employment Ordinance.
(c) Enforcement action is taken under existing legislation to ensure that the wages of foreign workers are not unlawfully deducted at any point in time. The Labour Department will continue to step up inspections made to places of employment and living quarters of the imported workers. Imported workers are given every
encouragement and assistance to report malpractices, including any deduction of wages which is not provided for in the employment contract.
Enrolment qualifications for colleges of education
12. MR NG MING-YUM asked: Will the Government inform this Council:
(1) of the minimum qualifications required of the applicants for enrolment in the Colleges of Education in the past decade; the rationale for setting such qualifications as the entry requirements;
(2) of the total number of underqualified candidates admitted into the Colleges during the said period, if any;
(3) of the number of available places in the Colleges of Education as compared with the actual enrolment of new students in the said period; the attempt, if any, that the Government has made to find out the cause of the under-enrolment; if so, the details of the findings;
(4) of the drop-out figure and drop-out rate in the current school year as at the end of November 1991;
(5) of the course of action, if any, that the Government has taken to analyse the causes of these drop-out cases; if so, the details of the findings; if not, the reasons for not conducting such an analysis; and
(6) whether the Government will take any measures to promote greater interest among students to enter and to complete their training courses in these colleges without lowering the entry requirements of these colleges? If so, what are the details?
SECRETARY FOR EDUCATION AND MANPOWER: Mr Deputy President, the answers to Mr NG's questions are as follows:
(1) The existing two-year and three-year courses were introduced in 1980 in line with the policy laid down in the 1978 White Paper on Senior Secondary and Tertiary Education. The minimum entry qualifications specified for these courses in the years 1980, 1984 and 1991 are detailed in the Appendix. There were no significant changes to the entry qualifications in the intervening years.
The rationale for setting minimum academic requirements is to ensure that students admitted to the courses have the capability to complete their training and become qualified teachers.
(2) No under-qualified candidates have been admitted in the past 10 years. All candidates admitted had met or had exceeded the minimum entry qualifications.
(3) Each year there is a target intake of first year students in the Colleges of Education. These, compared to the actual enrolment of new students in the past ten years, are as follows --
No. of
target students
Year intake enrolled
1982-83 689 700
1983-84 1 046 1 034
1984-85 1 249 1 240
1985-86 911 916
1986-87 1 182 1 108
1987-88 1 001 982
1988-89 1 021 1 028
1989-90 1 071 1 082
1990-91 1 367 1 346
1991-92 860 846
In view of the very low under enrolment (ranging from 0.7% to 6.3% in six of the last 10 years), no studies have been carried out into the causes. However, the whole question of teacher training, including enrolment levels at the Colleges of Education, is being examined in depth by the Education Commission.
(4) As at the end of November 1991, the number of first year students who had withdrawn from the courses (both two-year and three-year) was 134, or 15.8% of the total intake in September 1991.
(5) An analysis of the reasons for first year students withdrawing from the courses has been conducted and the findings are as follows --
No. of students
Reason 2-year Course 3-year Course Total (%)
To pursue 45 3 48 (35.8%)
degree course
To pursue sub- 6 13 19 (14.2%)
degree course
To emigrate 1 0 1 ( 0.7%)
To take up 2 4 6 ( 4.5%)
employment
Others/no rea- 48 12 60 (44.8%)
sons given
Total number of 102 32 134 (100%)
first year students
withdrawn
Number of students 517 329 846
originally enrolled
(6) The Government recognizes the importance of having adequately trained teachers. The question of attracting young people into the teaching profession is a complex one which is being examined in detail by the Education Commission in the context of its fifth report. The Commission will include consideration of the status of the Colleges and the teaching profession and is expected to propose measures to enhance both. The aim will be to make teaching as a career a more attractive option for school leavers. In the meantime there are no plans to lower the entry requirements for the Colleges, although consideration is being given to applying the minimum entry qualifications more flexibly in individual cases.
Appendix
Minimum qualifications required of applicants for
enrolment in the Colleges of Education
1980-81 1984-85 1991-92
General General General Requirements Requirements Requirements
Two-year (i) Completed 2 years of (i) Completed 2 years of (i) Completed 2 years of
Full-time education beyond the education beyond the education beyond the
Course level of Form 5 in an level of Form 5 in level of Secondary 5
Anglo-Chinese school; an Anglo-Chinese in a secondary school; school;
(ii) Have taken 6 different (ii) Have attained at (ii) Have attained at
subjects in public least Grade E in 6 least Grade E in 6 examination, with different subjects different subjects at Grade E or above at at HKCEE level in HKCEE level in one A-Level in at least 2 one sitting, sitting, including subjects, plus at including Chinese Chinese Language least Grade D in 1 Language and English and English other subject at Language; Language;
HKCEE level, plus
at least Grade E in (iii) Have attained Grade (iii) Have attained another 3 subjects at E or above in at Grade E or above HKCEE level, including least 2 subjects at in at least 2 subjects Chinese Language and A-Level, plus at at A-Level, plus at English Language. least Grade D in one least Grade D in one other subject at other subject at
HKCEE level. HKCEE level;
(iv) Have attained at
least Grade E in
Syllabus B or at
least Grade C in
Syllabus A in
English Language.
1980-81 1984-85 1991-92
Elective Subject Elective Subject Elective Subject Requirement Requirement Requirement
Two-Year (i) Major Elective Subject Normally Grade E at Normally Grade E at
Full-time A-Level in the subject A-Level in the subject Course Normally Grade E at
A-Level in the subject;
(ii) Minor Elective Subject
Normally Grade D at
HKCEE in the subject.
1980-81 1984-85 1991-92
General General General Requirements Requirements Requirements
Three- (i) Completed secondary (i) Completed secondary (i) Completed 5 years of Year Full- education in an Anglo- education in an Anglo education in a
Time Chinese/Chinese Chinese/Chinese secondary school; Course Middle School; Middle School;
(English/
Chinese) (ii) Have taken 6 different (ii) Have attained at least (ii) Have attained at least subjects at the HKCEE Grade E in 6 different Grade E in 6
level, with Grade C or subjects at HKCEE different subjects at above in 2 subjects, level in one sitting, HKCEE level plus Grade D or above including Chinese including Chinese in one other subject, Language and English Language and
English
plus Grade E or above Language with at least Language with at in another 3 subjects, Grade C in 2 subjects, least Grade C in including Chinese plus at least Grade D in 2 subjects, plus at
Language and English one other subject. least Grade D in Language. one other subject.
1980-81 1984-85 1991-92
Elective Subject Elective Subject Elective Subject Requirement Requirement Requirement
Three- (i) Major Elective Subject
Year Full
time Normally Grade C at Normally Grade C in Normally Grade C Course HKCEE level in that subject at in that subject at (English/ the subject; HKCEE level. HKCEE level. Chinese)
(ii) Minor Elective Subject
Normally Grade D at
HKCEE in the subject.
Note: (i) A-Level -- Hong Kong Advanced Level Examination
HKCEE -- Hong Kong Certificate of Education Examination
(ii) From 1980-81 to 1983-84, students were required to take two major elective subjects and one minor elective subject, in addition to the core curriculum programme. Since 1984-85, they are required to take two elective subjects only.
Establishment of a "Discount Window"
13. MR DAVID LI asked: Will the Administration inform this Council if it will consider
establishing a fully functioning "Discount Window" to serve as "lender of last resort"?
SECRETARY FOR MONETARY AFFAIRS: The Office of the Exchange Fund keeps the liquidity of the inter-bank market as a whole and the liquidity needs of solvent individual banks under regular review. There is currently an arrangement whereby the Office of the Exchange Fund in effect acts as the lender of last resort, providing late overnight liquidity assistance after the close of the local interbank market. Over the past 11 months, the Office has provided such assistance on 11 occasions. The total sums provided amount to HK$2.4 billion. This arrangement serves the function which in other monetary systems is provided by what is called a discount window.
Some have recently expressed a wish for Government's lender of last resort policy to be clarified. Others have called for the present arrangement to provide late overnight liquidity assistance to be formalized, so that licensed banks would have a better opportunity to manage their liquidity positions effectively. This matter is now under review by the Office of the Exchange Fund. There will be full consultation with those concerned, in particular with the Exchange Fund Advisory Committee and the Hong Kong Association of Banks, should changes be considered necessary and
desirable.
Sale of government stake in Cross Harbour Tunnel Company Limited
14. MR FRED LI asked: In the light of the recent sale by the Government, through a financial consultant, of its 24.3% of the shares of the Cross Harbour Tunnel Company Limited to Wharf (Holdings) Limited, the consortia which previously held ownership interest in the franchise to operate the tunnel, will the Government inform this Council of:
(a) the reasons for the sale;
(b) the reasons for selling the shares at a substantial discount rate (16%); and
(c) the changes in the percentage of its holdings and the annual rate of return since the Government held these shares, and the capital appreciation of these shares with a breakdown of the relevant figures on a yearly basis?
SECRETARY FOR MONETARY AFFAIRS: Mr Deputy President,
(a) As the Director of the Office of the Exchange Fund has announced, the sale was in accordance with Government's long declared intention that the Exchange Fund should dispose of the whole of its equity stake in The Cross-Harbour Tunnel Co., Ltd. ("CHTC"), on the grounds that this was not an appropriate asset for the Fund. It was not a liquid investment and also there was a potential for conflicts of interest to arise where the Government was both regulator and a significant shareholder. In 1986, Sir John BREMRIDGE, the then Financial Secretary, announced in his Budget Speech that it had been decided to dispose of the Exchange Fund's equity holdings in Hong Kong as and when appropriate and that the deals should be "at arm's length on the strength of impartial outside advice".
(b) The price at which the CHTC shares were sold ($12.035 per share) was determined on the basis of several factors, including a "net asset" valuation of CHTC and a "net present value" valuation of expected future dividends (having regard to the franchise period of CHTC's tunnel), the absence of a more competitive offer from an interested party in Hong Kong, the conditional requirements of other bidders of the shares for Transport Branch assurances on various relevant aspects of transport policy which the Exchange Fund was not in a position to provide. The discount of 15.2% to the market price of $14.20 at the time of the sale was considered by the Fund's financial advisers Hambro Pacific Limited to be acceptable for a large private placement and for a sale of this type. The offer was recommended by them to the Exchange Fund and the decision to sell was taken on the basis of that recommendation.
(c) The Exchange Fund acquired the CHTC shares from the Development Loan Fund in September 1983. The purchase price of approximately $318 million (or $10.34 per share) was based on the valuation prepared by independent professional accountants. Since that time, the following dividends have been received:
Per Share
1983 (6 months) $0.580
1984 $1.140
1985 $1.140
1986 $1.250
1987 $1.310
1988 $1.435
1989 $1.465
1990 $1.465
1991 (6 months) $0.670
The sale to the Wharf Group realized total proceeds of $370 million, resulting in a capital gain of $52 million. The overall return of both dividends and capital value to the Exchange Fund since the acquisition of the shares in 1983 represents an Internal Rate of Return of 14.39% per annum.
Policy on public bus priority
15. MR LEE WING-TAT asked: In relation to the policy on public bus priority measures, will Government inform this Council of the following:
(i) the criteria under which the policy is applied to roads;
(ii) the number of roads in the territory where bus priority measures are applied at present and the general effects of such priority measures;
(iii) whether Government will consider imposing restrictions on vehicles other than public buses from using some extremely congested roads during certain periods, for example, morning peak hours; and
(iv) given the serious traffic congestions on Tsing Yi South Bridge and Tsuen Wan Road during the morning peak hours, will Government consider applying or extending public bus priority measures to these road sections during that period?
SECRETARY FOR TRANSPORT: Mr Deputy President,
(i) In deciding whether to introduce bus priority schemes, consideration is given to the extent to which bus services are being delayed as a result of traffic congestion and also to any adverse effects that such schemes may have on other road users.
(ii) At present there are 98 bus priority schemes in existence, comprising 77 bus only lanes, 11 bus gates, and 10 bus only turnings. These measures have been successful in saving travelling time for bus passengers and reducing the operating costs of bus services.
(iii) To impose restrictions on vehicles other than public buses from using congested roads at peak hours would be an extreme measure to be considered only where no better alternatives were available. Such an arrangement could obviously interfere with the activities of other essential road users. So far, a bus only system has been introduced in parts of mid-levels at certain times of the day and with some success.
(iv) Two bus priority measures have been introduced at Tsing Yi South Bridge. These are the bus-only right-hand turn from the bridge into Tsing Yi Heung Sze Wui Road northbound, and the bus-only right-hand turn from Tsing Yi Road northbound onto the bridge. These arrangements operate from 7 am to 7 pm daily, except Sundays and public holidays. There are no plans to introduce further bus priority schemes at Tsing Yi South Bridge and Tsuen Wan Road for the time being. However, the Transport Department is considering other traffic management measures aimed at improving
conditions for all vehicles, including buses, at these locations.
Juvenile delinquency in Tai Po and North Districts
16. REV FUNG CHI-WOOD asked: In view of the worsening problem of juvenile delinquency in Tai Po and North Districts, particularly in certain public housing estates where the juvenile crime rate continues to increase and a great number of young people are seen loitering around in gangs till midnight, will the Government inform this Council:
(1) when an outreaching social work team will be provided to Tai Po and North Districts;
(2) how the outreaching social work teams are deployed throughout the territory; and
(3) what criteria the Government has adopted in determining the provision of an outreaching team for a particular district?
SECRETARY FOR HEALTH AND WELFARE: The provision of outreaching social work teams is determined by the Steering Group on Outreaching Social Work, which consists of representatives of the Social Welfare Department and the Hong Kong Council of Social Service. Priorities are set by the Steering Group, and there is no plan to provide an outreaching social work team to Tai Po and North Districts.
At present, there are 24 outreaching social work teams in the following districts:
District Number of Teams
Kwun Tong 4
Wong Tai Sin 2
Kowloon City 2
Yau Ma Tei/Tsim Sha Tsui 1
Mong Kok 1
Sham Shui Po 2
Tsuen Wan/Kwai Tsing 3
Tuen Mun 2
Yuen Long 1
Sha Tin 2
Central & Western 1
Wan Chai 1
Eastern 1
Southern 1 -----
Total : 24
The criteria for the deployment of an outreaching social work team to a district are:
(a) High juvenile crime rate, as indicated by the actual number of cases
prosecuted and the number of young people supervised under the Superintendent Discretionary Scheme of the Royal Hong Kong Police Force;
(b) Relative percentage of youth population; and
(c) High population density, having regard to the availability of other forms of relevant services for young people in that district.
Prince of Wales Hospital
17. MISS EMILY LAU asked:
(a) What was the Prince of Wales Hospital's (PWH) original targetted population and what is the present actual population served;
(b) what is the Government's total budget allocated to hospital services for the year 1990-91 and the percentage of this budget that has been allocated to the PWH; and why Government considers that such percentage represents a fair allocation to the PWH taking into account the population it has to serve;
(c) what the present hospital bed/population ratios are for the territory as a whole and for New Territories East specifically; whether the ratio for New Territories East compares favourably with that for the territory; if not, what improvement measures will be taken by the Government; and
(d) what is the failure rate of the CT scanner in the PWH in the past 12 months; whether there are any contingency plans to close down the emergency neuro-surgical unit at the PWH in case the CT scanner fails completely; if so, how would this affect patient care; and when would money be allocated to buy a new scanner?
SECRETARY FOR HEALTH AND WELFARE: Seriatim, the answers are as follows.
(a) The Prince of Wales Hospital (PWH), with 1 380 beds, was designed to serve a population of 700 000. It is the regional hospital for New Territories (East) which has a population of 1.03 million. In this connection, it should be noted that in addition to PWH, the New Territories East Region is also served by Fanling Hospital
(98 beds), Shatin Cheshire Home (246 beds), Haven of Hope Hospital (271 beds), St John's Hospital (97 beds), 16 out-patient clinics and a range of other medical and health facilities.
(b) The actual operating expenditure for hospital services in 1990-91 (including subventions) was $6.56 billion. Of this amount, $687.8 million, or 10.5%, was spent on PWH. Taking into account the current information available on the various factors that affect the utilization of hospital services in the New Territories (East) Region, such as the relatively young population, the hospital utilization rate and the availability of physical facilities, the allocation to PWH is considered fair.
(c) The New Territories East Region now has 2.07 beds per 1 000 population. This compares with 4.28 beds per 1 000 population for the territory as a whole. The Shatin Cheshire Home and Shatin Infirmary and Convalescent Hospital are two new hospitals opened in 1991 to serve the New Territories (East) population. Plans are also in the pipeline to improve the provision of hospital beds in the Region. These include the expansion works at the Fanling Hospital, expansion and improvement works at the Prince of Wales Hospital, relocation of the Nethersole Hospital at Tai Po, redevelopment of the Haven of Hope Hospital and building of the new Tai Po Infirmary and Convalescent Hospital.
(d) Over the past 12 months, the CT scanner in PWH was out of service for 214.1 hours. This represents a downtime rate of 2.4%. The main reason for this was the need for major repairs in July and September 1991, which accounted for 150.5 hours, or 70% of the total downtime during the year. Since then, however, the machine time has been restored to over 90% of the operating capacity.
In case of failure of the CT scanner, a contingency plan does exist in PWH for the transfer of emergency cases to Queen Elizabeth Hospital and for rescheduling examination of non-emergency cases. With efficient patient management, the impact on service is minimized. Meanwhile, consideration is given to the provision of
necessary equipment to meet patient needs.
British Nationality Scheme
18. MR EDWARD HO asked: Will the Government inform this council of the circumstances under which authorization has been, or will be, given for the identity and personal
data of the applicants under the British Nationality Scheme to be disclosed to other governments?
SECRETARY FOR SECURITY: Mr Deputy President, Hong Kong Government has not given, nor envisages giving, authorization for the disclosure of the identity and personal data of applicants under the British Nationality Scheme. Such information is protected with strict confidence. Records on unsuccessful applicants will be destroyed, and those on successful applicants will be kept by the British Government.
Security of personal data kept in government departments
19. MR EDWARD HO asked: Will the Government inform this Council of the safeguards which are available to prevent improper or unauthorized access to personal data kept in different government departments and to ensure that such data are not used for purposes other than what they are required for?
SECRETARY FOR SECURITY: Mr Deputy President, all government servants are required by Hong Kong Government Security Regulations and other government regulations to protect official information, which includes personal data held in government departments. They are specifically prohibited from passing to persons any such information unless those persons are authorized to have access to it. These regulations are comprehensive and precise. They cover the handling, protection and storage of all classified data, no matter in what form such data is stored, that is, whether the data be stored in conventional files or on computer systems media.
Recognizing the special needs for protecting personal data stored in computer systems, a Working Group on Data Protection Legislation, reporting to the Secretary for Home Affairs and drawing on electronic data processing expertise both in the private sector and within Government, established data protection principles and guidelines which were issued to government departments in March 1988. These
principles were based on those which had been adopted in the United Kingdom under the Data Protection Act 1984.
The data protection guidelines issued to government departments set out data management responsibilities specify the parameters for the collection of personal
data and lay down requirements for protection of these data against unauthorized access.
A recent survey of data protection practices in government departments carried out by the Working Group shows that, within the parameters set, the Government's record on personal data protection is satisfactory. Although it is left to the discretion of Heads of Departments to plan and pursue a course of action to observe the data protection principles, the survey shows that most government departments have specific policies and procedures drawn up for the protection of personal data stored in their computer systems. Many have a senior member of staff or committee to oversee the security of personal data stored in their computer systems.
Management of commuity halls and community centres
20. MR NG MING-YUM asked: Will the Government inform this Council:
(1) what the reasons for handing over the management of some community halls and community centres from the City and New Territories Administration to Voluntary Agencies are;
(2) whether the Government has assessed the effect of this exercise; if so, what the findings are;
(3) what measures the Government will take to ensure the previous level of service is maintained?
SECRETARY FOR HOME AFFAIRS: Mr Deputy President, before I reply to the main question raised by the Honourable Member, I should like to stress that CNTA will continue to be fully responsible for the management and operation of all its 69 community halls and centres. In this regard, approval has recently been given for the employment of part-time staff to assist in the operation of community facilities. It is not the intention for CNTA to give up management responsibility at this stage.
However, CNTA is carrying out a limited three-year trial in four community halls to determine whether or not community facilities can be operated in a manner which is more responsive to community needs. The objective is to promote utilization of
community halls and at the same time achieve the most effective use of resources.
Under the trial, we have carefully selected four voluntary agencies to be responsible for the day to day operation of the hall and to promote the use of the hall among the local community. The voluntary agencies are required to open and close the hall, set up, dismantle and store any equipment provided, as well as to monitor
the general cleanliness and security of the premises during opening hours. The relevant CNTA District Office will still be responsible for the overall management of the centre, including the booking arrangements and the supervision of maintenance and cleansing contractors.
The four community halls included in the scheme and the Voluntary Agencies concerned are as follows:
Community Effective
Hall Organizations Date
Tsing Yi ) Children's Club May 1991
Cheung Hang ) New Hall Pok Oi Hospital October 1991
Kin Sang ) Yan Oi Tong Tenancy agreement
being processed
Kwai Fong - existing Kwai Chung and "
hall Tsing Yi District
Culture and Arts
Co-ordinating
Association Ltd.
The performance of the organizations involved in the pilot scheme will be closely monitored over the next three years. So far, initial reports are positive.
Turning to the Honourable Member's last question: I can assure him that not only will CNTA work to ensure that the level of service provided at community facilities is maintained under the trial, but also strive to ensure that services generally are improved. This, after all, is the reason we have embarked upon this trial.
My staff are working closely with the Voluntary Agencies, the Hong Kong Council of Social Service and other government departments to identify problems, to work out realistic solutions to these and to consider ways further to improve the management of community facilities. Measures being considered in addition to those which form part of the trial scheme include: improvements to the physical security of community facilities; introduction of more frequent cleansing to improve the environment in these facilities; and the adoption of more flexible block booking arrangements which should benefit regular users.
Motions
EMPLOYEES' COMPENSATION ORDINANCE
THE SECRETARY FOR EDUCATION AND MANPOWER moved the following motion: "That, with effect from 1 January 1992, the Ordinance be amended as follows: (a) in section 6 -
(i) by repealing "$424,000" in the three places where it occurs in subsection (1) and substituting in each case "$542,000";
(ii) by repealing "$143,000" in subsection (2) and substituting "$183,000"; and
(iii) by repealing "$8,000" in subsection (5) and substituting "$10,000"; (b) in section 7 -
(i) by repealing "$485,000" in the three places where it occurs in subsection (1) and substituting in each case "$620,000"; and
(ii) by repealing "$162,000" in subsection (2) and substituting "$207,000"; (c) in section 8(4) by repealing "$194,000" and substituting "$248,000";
(d) in section 11(5) by repealing "$1,040" in the two places where it occurs and substituting in each case "$1,450";
(e) in section 13(3) by repealing "$20,000" and substituting "$28,000"; (f) in section 16A(10) -
(i) by repealing "$200" in paragraph (a) and substituting "$300"; and (ii) by repealing "$400" in paragraph (b) and substituting "$600";
(g) in section 17A(1) -
(i) by repealing "$200" in paragraph (a) and substituting "$300"; and (ii) by repealing "$400" in paragraph (b) and substituting "$600"; (h) in section 36C by repealing "$16,000" and substituting "$20,000"; (i) in section 36J by repealing "$50,000" and substituting "$62,000"; and
(j) in the Third Schedule by repealing "$70" in paragraphs 1(b), 2(b) and 3 and substituting in each case "$90"."
SECRETARY FOR EDUCATION AND MANPOWER: Mr Deputy President, I move the motion standing in my name on the Order Paper.
The purpose of this resolution is to revise the levels of compensation and certain compensation-related items under the Employees' Compensation Ordinance. That Ordinance provides for payment of compensation by employers to employees who are injured or killed as a result of employment-related accidents. Our policy since 1978 has been to review the levels of compensation every two years to take account of wage movements, inflation and other changes. Existing levels of compensation have been in force since 1 January 1990 and are now due for revision. Concurrently, the ceiling on advance payment and the surcharge for late payment of compensation should also be revised. It is proposed that the revised rates should be effective as from 1 January 1992.
Taking into consideration the projected rate of wage increase for the period from January 1990 to December 1991 and the slight under-estimation of the increase in nominal wages in the last review, we propose to increase the existing levels of
compensation arising from death, permanent total incapacity and requirement for constant attention by 27.8%. The maximum amounts of compensation for death will be raised from $424,000 to $542,000, and for permanent total incapacity from $485,000 to $620,000. At the same time the minimum amounts will be raised from $143,000 to $183,000 and from $162,000 to $207,000 respectively. The maximum amount of compensation for constant attention will also be raised from $194,000 to $248,000.
The ceiling on three other forms of compensation are to be adjusted to take account of inflation since their last revision in 1990. The proposed changes include: increasing the maximum amount of compensation for burial and medical expenses where the deceased employee leaves no dependants from $8,000 to $10,000; increasing the maximum daily reimbursements of medical expenses from $70 to $90; and increasing the maximum payments to be made by an employer towards the costs of supplying and fitting a prosthesis or a surgical appliance, and for their repair or renewal from the present amounts of $16,000 and $50,000 respectively to $20,000 and $62,000 respectively.
We also propose to raise the amount that is deemed to be minimum earnings per month for the purpose of calculating compensation from $1,040 to $1,450. The proposed increase serves to keep the deemed minimum earnings of an injured employee broadly in line with the existing rate in respect of public assistance.
Finally, we propose to increase the levels of two other compensation-related items which were last revised in 1988. First, we propose to adjust the ceiling for advance payment of compensation from $20,000 to $28,000 to take account of inflation since July 1988. Second, we propose that for the late payment of compensation, the minimum amount of surcharge imposed upon expiry of the payment period be increased from $200 to $300 and the minimum additional surcharge imposed three months later be increased from $400 to $600. The proposed increases are in line with the rate of increase in the maximum levels of compensation for death and permanent total
incapacity since the surcharges were last revised in 1988.
These proposals have been endorsed by the Labour Advisory Board and I recommend them to this Council for approval.
Mr Deputy President, I beg to move.
Question on the motion proposed, put and agreed to.
PNEUMOCONIOSIS (COMPENSATION) ORDINANCE
THE SECRETARY FOR EDUCATION AND MANPOWER moved the following motion: "That, with effect from 1 January 1992, the Ordinance be amended as follows: (a) in the First Schedule -
(i) in Part I -
(A) by repealing "$424,000" in paragraphs 1, 2 and 3 and substituting in each case "$542,000";
(B) by repealing "$143,000" in paragraph 4 and substituting "$183,000"; and
(C) by repealing "$8,000" in paragraph 5 and substituting "$10,000"; (ii) in Part II -
(A) by repealing "$485,000" in paragraphs 1, 2 and 3 and substituting in each case "$620,000"; and
(B) by repealing "$162,000" in paragraph 4 and substituting "$207,000"; and
(iii) in Part IV by repealing "$194,000" in paragraph 4 and substituting "$248,000"; and
(b) in the Second Schedule by repealing "$70" in paragraphs 1(b), 2(b) and 3 and substituting in each case "$90"."
SECRETARY FOR EDUCATION AND MANPOWER: Mr Deputy President, I move the second motion standing in my name on the Order Paper.
The purpose of this resolution is to revise the levels of compensation for certain awards under the Pneumoconiosis (Compensation) Ordinance, which provides for payment of compensation by the Pneumoconiosis Compensation Fund Board to persons who are incapacitated by, or die as a result of, pneumoconiosis. These awards are in respect of death, permanent total incapacity, constant attention and burial and medical
expenses. The levels of these awards have always been identical to those specified in the Employees' Compensation Ordinance. As the latter have just been raised by a resolution of this Council, I propose that they be similarly raised.
Mr Deputy President, I beg to move.
Question on the motion proposed, put and agreed to.
First Reading of Bills
INSURANCE COMPANIES (AMENDMENT) (NO. 2) BILL 1991
NOISE CONTROL (AMENDMENT) BILL 1991
DANGEROUS DRUGS (AMENDMENT) (NO. 2) BILL 1991
Bills read the First time and ordered to be set down for Second Reading pursuant to Standing Order 41(3).
Second Reading of Bills
INSURANCE COMPANIES (AMENDMENT) (NO. 2) BILL 1991
THE SECRETARY FOR MONETARY AFFAIRS moved the Second Reading of: "A Bill to amend the Insurance Companies Ordinance."
He said: Mr Deputy President, I move that the Insurance Companies (Amendment) (No. 2) Bill 1991 be read a Second time.
The main purpose of the Bill is to empower the Insurance Authority when this proves necessary to appoint a person to advise an insurer on the management of its affairs,
business and property and, if so required, appoint a manager to assume such management functions.
The Insurance Companies Ordinance gives the Insurance Authority certain powers to intervene in the operations of an insurer. However, past experience has shown that these powers are inadequate if the Insurance Authority is to be able to ensure that the business of an insurer which is in serious difficulties will be prudently managed. An insurer in serious difficulties may expose the insuring public to
serious risk of loss. The absence of prudent management could result in even greater damage to policy holders. It could also damage the general reputation of the insurance market in Hong Kong.
To overcome the present inadequacy of the Insurance Authority's powers of intervention and in the interest of the insuring public, we propose that the Authority should be given the additional interventionary power of being able to appoint an
advisor or a manager in respect of an insurer where the exercise of his other interventionary powers would not provide adequate safeguards.
I should emphasize that this power will only be exercised as a last resort in circumstances where all the other interventionary powers of the Insurance Authority would not be sufficient to protect the interests of policy holders. A right of appeal against the exercise of these powers lies to the Financial Secretary. Moreover, exercise of the power may be subjected to review by the Courts. I can assure Members that the power will be exercised within the bounds of legal reasonableness which, amongst other things, takes into account the relevance of the action. In other words, the Insurance Authority will, as a matter of course, satisfy itself before taking any action that the decision is such as to be justifiable were it to be reviewed by the Courts. The specific powers of the manager are prescribed in the Bill.
Where an insurer which is in serious difficulties is incorporated outside Hong Kong, we propose that the remit of the advisor or manager will only extend to that part of the insurer's business which is carried on, or managed, in or from Hong Kong as well as the property of such an insurer which is located in, or managed from, Hong Kong.
We also propose that a further ground should be added to the Ordinance for the Insurance Authority to exercise his interventionary powers. Similar to the provision in the Banking Ordinance, the further ground would allow the Insurance
Authority to intervene where it appeared to him that an insurer is carrying on its business in a manner detrimental to the interests of its policy holders.
Finally, the opportunity is taken to amend the Ordinance so that the existing provision which prohibits insurers carrying on long-term business from being wound up without the approval of the Courts is extended to insurers carrying on general business. This will ensure that the Insurance Authority has prior notice of a
proposal for the voluntary winding up of a general business insurer, as is presently the case for an insurer writing long-term business.
Mr Deputy President, I move that the debate on this motion be now adjourned. Question on the adjournment proposed, put and agreed to.
NOISE CONTROL (AMENDMENT) BILL 1991
THE SECRETARY FOR PLANNING, ENVIRONMENT AND LANDS moved the Second Reading of: "A Bill to amend the Noise Control Ordinance."
He said: Mr Deputy President, I move that the Noise Control (Amendment) Bill 1991 be read the Second time.
The main provisions of the Noise Control Ordinance were fully implemented in November 1989, leading to much better control over noisy construction practices. However, we need to further tighten controls on noise from individual noisy products and the White Paper on Pollution stated that regulations would be made under the Ordinance to effect control over such products. Hand-held percussive breakers and air compressors used for construction and demolition works are the first group of equipment to be brought under the jurisdiction of Part III of the Ordinance. The new regulations stipulate acceptable noise emission standards and set out methods of testing and labelling, and control the sale and import of unacceptable products.
We also take this opportunity to make the wording of certain provisions better reflect the original intent of the legislation. General traffic noise -- noise generated by a vehicle was never intended to be controlled under sections 4 and 5 of the Ordinance, where enforcement is by way of police summons action upon complaints. These sections were intended to cater for situations where people were making
excessive noise, not for situations where people were operating in a routine way causing only unavoidable noise. Clause 2 will provide a new section to clarify that such general traffic noise is not subject to control by way of police summons action upon complaints.
Similarly, it has never been the policy intent to control operational noise from one industrial or commercial premises affecting another industrial or commercial premises as it does not affect the general public. The amendment to section 13(1)(a), as included in clause 3, will clarify that such noise is not included in this section.
The proposal to introduce control on hand-held percussive breakers and air compressors has been discussed with and is supported by the construction industry. The majority of the breakers and compressors available now in the new equipment market are in fact silenced types and there should be no difficulties for the industry to comply with the control scheme.
Mr Deputy President, I move that the debate be now adjourned. Question on the adjournment proposed, put and agreed to.
DANGEROUS DRUGS (AMENDMENT) (NO. 2) BILL 1991
THE SECRETARY FOR HEALTH AND WELFARE moved the Second Reading of: "A Bill to amend the Dangerous Drugs Ordinance."
She said: Mr Deputy President, I move that the Dangerous Drugs (Amendment) (No. 2) Bill 1991 be read the Second time.
The Bill seeks to provide the Director of Health with the discretion to permit unregistrable medical practitioners, who practise in exempted clinics, to supply, possess and procure certain benzodiazepine drugs for the treatment of their patients.
These practitioners hold qualifications not registrable in Hong Kong. In 1963, the then Medical and Health Department held a one-off assessment panel through which all unregistrable medical practitioners' qualifications were assessed one by one. Those who passed the assessment were allowed to practise in exempted clinics. Their number has been decreasing steadily, through retirement or death, from over 400 in 1963 to 165 now. For the past three decades, these practitioners have been providing
a valuable service to the community.
Under the present provision of the Dangerous Drugs Ordinance, such practitioners are not permitted to use dangerous drugs in the course of their practice. Recently, Part I of the First Schedule to this Ordinance has been amended to include all benzodiazepine drugs as dangerous drugs. These practitioners will thereby no longer have access to such drugs and will have difficulty in maintaining the standard of their service to the public. This Bill therefore seeks to enable them to continue to have the use of certain benzodiazepine drugs as specified by the Director of Health for the purpose of treating their patients.
Mr Deputy President, I move that the debate on this motion be now adjourned. Question on the adjournment proposed, put and agreed to.
PNEUMOCONIOSIS (COMPENSATION) (AMENDMENT) (NO. 2) BILL 1991
Resumption of debate on Second Reading which was moved on 20 November 1991 Question on Second Reading proposed.
MR PANG CHUN-HOI (in Cantonese): Mr Deputy President, the Employees' Compensation and the Pneumoconiosis (Compensation) Ordinances are two Ordinances that are closely related to the labour sector, particularly manual workers. Labour bodies have consistently been petitioning OMELCO for improvements to the Ordinances especially in respect of the present assessment system and the method of calculating compensation, so that better protection will be provided for workers injured in the course of their employment. After this Bill was introduced into the Legislative Council, we received representations from a number of labour organizations, calling for a review of other aspects in the relevant Ordinances while the Bill was being scrutinized. In this connexion, a 12-member ad hoc group was formed to study the Bill.
Since the ad hoc group was formed on 8 November 1991, a total of three meetings were held, including one with the Administration and two with interested labour organizations, to discuss the provisions of the Bill and the related adjustment package. Other subjects covered included certain compensation-related provisions under the two Ordinances as follows:
(1) the three-day waiting period requirement for periodical payments should be cancelled;
(2) calculation of compensation for permanent incapacity should be based on actual wages;
(3) assessment of incapacity should take into account individual merits and special circumstances of an injured employee;
(4) the two-year limit for periodical payment should be relaxed; and
(5) the rate of medical expenses should tie in with actual medical charges of government hospital.
While the ad hoc group was aware that these issues were outside the scope of the Bill and the related adjustment package, I was pleased to find that the Administration was willing to exchange views on the issues with the ad hoc group. The group had been advised by the Administration that a comprehensive review was being conducted on occupational health and related legislation on employees' compensation. Some of the issues raised by the labour organizations were already subjects of the review. It was also the Administration's intention to introduce to the Legislative Council a series of legislative amendments to the Employees' Compensation Ordinance before the end of the current Session. Members of the ad hoc group hoped that these amendments could be introduced to this Council according to schedule.
The ad hoc group recognizes that the Bill and a series of resolutions concerning the review of compensation levels introduced into the Legislative Council today are part of a regular exercise done every two years, taking into account wage movements, inflation and other changes. To this the group gives its full support.
Mr Deputy President, as a labour representative in the Legislative Council, I would of course like to see the Government and the employers do more on industrial safety and occupational health and also make improvements on these aspects with a view to reducing the incidence of industrial accidents. In the event of industrial accident, however, the only thing we can do is to assist injured employees to
recuperate their health as soon as possible and to obtain any compensation due.
When this Council held a motion debate on "occupational health" on 1 May 1991, the Secretary for Education and Manpower undertook to conduct a comprehensive review on the subject. I am looking forward to receiving a review report from him very soon.
Mr Deputy President, with these remarks, I support the Bill.
DR LEONG CHE-HUNG: Mr Deputy President, I rise to support this Bill and the related adjustment package as it seeks to raise the level of compensation in the light of wage increase and inflation. The Bill should also be passed as soon as possible so that the improvement could be made and take effect by 1 January 1992. In supporting this Bill, the medical profession feels that the Administration should also take note of the need for a comprehensive review on all occupation health all the way from prevention to compensation including introduction of relevant legislation. Some of these are long overdue, such as noise induced deafness and death or disability from falling from height, the incidence of which Hong Kong can claim to be amongst the highest in the world.
With these remarks, Mr Deputy President, I support the Bill.
MR LAU CHIN-SHEK (in Cantonese): Mr Deputy President, pneumoconiosis is a very common occupational disease in Hong Kong. Construction workers can easily contract it. According to the statistics of the Labour Department, more than 4 000 cases of pneumoconiosis were reported between 1958 and 1990. The Pneumoconiosis (Compensation) Ordinance provides that patients will be compensated according to the degree of damage done to their lungs. Even though the upper limit of compensation has been raised, given inadequate legislation, many workers who have been suffering from the disease still fail to get reasonable compensation. Here, in particular, I would like to point out two problems and hope the departments concerned will review them. First of all, as regards compensation for permanent loss of working ability, in accordance with the existing Ordinance, patients can choose to be compensated either once or twice. However, they will not be given additional compensation if their lungs are further debilitated after they have been compensated. But in fact, it has been discovered that the conditions of most pneumoconiosis patients will only further worsen and they have little chance to recover and work again. They will not be given additional compensation after they have received a flat sum even though their lungs
further weakens. This loophole has been an object of public denunciation for years and this is very unfair to the workers.
Recently, the Government has proposed to amend this Ordinance. Compensation for workers who have contracted the disease from their work shall be payable on a monthly basis and the degree of damage done to their lungs shall also be regularly assessed so as to adjust the compensation amount. It was estimated that 2000-plus workers had already received a lump sum of compensation before the Pneumoconiosis
Compensation Fund was established in 1981. However, they still fail to gain benefit from this. They had indeed worked hard for Hong Kong when they were young. Employers' neglect and the Government's indifference then to industrial safety were the reasons why they had contracted the disease. Today, it is tragic to see that they have been mercilessly excluded from the new compensation method.
Therefore, the Government should not only consider amending legislation to protect workers in the future, but also give additional compensation to those who have not been reasonably compensated as a result of inadequate legislative protection.
On the other hand, when we discussed improving the compensation level, we had also considered a problem, that is, prevention is far better than compensation. Workers suffering from pneumoconiosis are all construction workers and most of them work in caissons. They have to excavate to enable caissons to be sunk several or tens of feet under the ground. During the process of excavation, pneumatic or percussive drills keep producing powder and dust and because of poor ventilation and confined working environment, workers always inhale a large quantity of powder and dust. The Government therefore needs to control the process of manual caisson excavation which should be done by machines. At the same time, the Government should make it a law that construction workers, when they join the industry, shall receive regular check-ups, so that they will be given appropriate treatment if they have been found to have contracted the disease at the incipient stage.
Mr Deputy President, Christmas is coming in two weeks' time. I have received many Christmas cards and the most inspiring one bears the words: "Please do think of those suffering from pneumoconiosis" and it was signed by "a group of people without future".
I have seen many pneumoconiosis patients who regard themselves as "people without future". They always pant and have difficulty in breathing. Complications easily
develop, in particular tuberculosis. The patient's conditions will worsen day by day. Mr Deputy President, whenever we amend Ordinances, we will probably say we had better quickly pass them because some improvement is better than none. But we have never thought that those without future will most likely be in Heaven when we amend this Ordinance next time. By then, we shall not have to worry about them.
I think Christmas is the time to bring hope to the underprivileged and the needy. I hope we will be considerate and listen to their proposals. This morning, they came to us and presented a proposed compromise. I support their proposals and hope we can really help them.
Mr Deputy President, this is my submission.
SECRETARY FOR EDUCATION AND MANPOWER: Mr Deputy President, in moving the Second Reading of this Bill on 20 November 1991, I explained that the purpose of this Bill was to raise the ceiling for advance payment of compensation from $20,000 to $28,000 to eligible employees or their dependants with effect from 1 January 1992. The maximum amount of advance payment of compensation payable under the Pneumoconiosis
Compensation Ordinance is identical to that under the Employees' Compensation Ordinance in respect of which this Council has passed a resolution a moment ago.
I am grateful to Mr PANG Chun-hoi, and the ad hoc group of which he was the convenor, for their careful study of the Bill and the two related resolutions under the Employees' Compensation and Pneumoconiosis Compensation Ordinances. I can reiterate the assurance the Administration has given to the ad hoc group that a comprehensive review of occupational health and safety is very much in hand and that it remains the Administration's intention to make continuing improvements in this regard.
My Deputy President, I recommend this Bill to the Council.
Question on the Second Reading of the Bill put and agreed to. Bill read the Second time.
Bill committed to a Committee of the whole Council pursuant to Standing Order 43(1).
Committee stage of Bill
PNEUMOCONIOSIS (COMPENSATION) (AMENDMENT) (NO. 2) BILL 1991
Clauses 1 and 2 were agreed to.
Council then resumed.
Third Reading of Bill
THE ATTORNEY GENERAL reported that the
PNEUMOCONIOSIS (COMPENSATION) (AMENDMENT) (NO. 2) BILL 1991
had passed through Committe without amendment and moved the Third Reading of the Bill. Question on the Third Reading of the Bill proposed, put and agreed to. Bill read the Third time and passed.
Member's motions
Retirement protection scheme
MR TAM YIU-CHUNG moved the following motion:
"That this Council welcomes the decision by Government to introduce legislation for the implementation of a compulsory retirement protection scheme and urges Government to draw up expeditiously, after widely seeking and fully taking into account the views of the public, a plan for solving effectively the livelihood problem of retired and elderly people."
MR TAM YIU-CHUNG (in Cantonese): Mr Deputy President, I move the motion standing in my name on the Order Paper. This is my second time this year to move a motion on retirement benefits in this Council. The motion that I moved in July this year was "That this Council urges the Government to take immediate steps to re-examine the
setting up of a Central Provident Fund or other forms of compulsory retirement schemes in order that workers in Hong Kong are provided with comprehensive retirement protection." The motion was negatived as all official Members voted against it. In less than four months' time, the Government made a hundred-and-eighty degree change in its stance towards the issue, declaring that it has decided in principle to set up a compulsory retirement protection scheme. The labour sector naturally welcomes the Government's back-tracking act. They are glad that the scheme which has long been vigorously sought after can finally see the light. However, much to my regret and indignation, the retirement scheme, which should aim at "providing for a rainy day", has now somewhat become a measure to "mending the fold after a sheep is lost". In particular, the Government's change of heart in this issue all the more shows that the reasons it previously gave for opposing the setting up of a retirement scheme were merely excuses. How many old people have their rights to retirement protection been denied or delayed by this unjustifiable way of policy making? How is the Government going to be accountable to elderly people such as Mr CHAN and Mrs CHAN whom I mentioned in my last speech on this issue? Even though their losses cannot be made good now, they warrant to be recorded so that the same mistake will not be repeated.
Now that the Government has decided to set up a compulsory retirement protection scheme, what tops our agenda is to devise a scheme that best meets our social needs. A number of models have been proposed for discussion. Before a choice is made, I think that we should firstly set down some basic principles that are commonly accepted. Then, basing on these principles, we can devise a scheme that addresses our real needs. I think that the principles should include the following points:
Firstly, the immediate livelihood problems of elderly people must be addressed. At present, there are over 700 000 people in Hong Kong aged over 60. To them, even if a Central Provident Fund or a compulsory contributory provident fund scheme is to be implemented immediately, it will come too late. Similarly, housewives and those who, for special reasons, do not have a permanent job or a steady income over a long period of time cannot be benefited from a self-help provident fund scheme. As to those middle-aged workers who are now in their forties or fifties and those low income workers, the provident fund scheme may not solve all their livelihood problems upon retirement. In devising the scheme, we must accord top priority to meeting the needs of this great number of people.
Secondly, the Government must play an active role and must not shirk its
responsibility. Without the involvement of the Government, it is impossible to safeguard the post-retirement livelihood of everyone. This is why up till now only one-third of the employees in Hong Kong enjoy provident fund or retirement benefits. The involvement of the Government must involve the following elements:
(1) to legislate for the setting up of a retirement scheme by every enterprise;
(2) to legislate for the monitoring of each retirement scheme;
(3) to take up the co-ordinative management work of the retirement or provident fund scheme; and
(4) to shoulder some of the contributions to the schemes.
In the light of the first basic principle that I have just outlined, other than introducing legislation to set up compulsory retirement schemes, the Government must also make financial commitments. Such a commitment must not be less than the current public expenditure on public assistance and old age allowance. It must be pointed out that the Government must not, by legislating the setting up of compulsory
retirement schemes, "pass the buck". As the Government has wavered its policy on the issue of retirement benefits, the labour sector worry that the Government has an ulterior motive of evading its responsibility behind its apparent gesture of generosity. Of course, I absolutely hope that such worries are uncalled for. As regard to how and how much financial commitment should be made, further discussion will be needed.
Thirdly, there must be the spirit of providing for a rainy day and people sailing in the same boat to help each other. At present, there are mainly two models regarding the setting up of retirement schemes. The first model is pay as you go and the second model is fully funded. The tripartite contributory scheme proposed by the Social Security Society belongs to the first category while the Central
Provident Fund belongs to the latter category.
Regarding the first model, it is basically built on the concept of the young providing for the elderly, when the young people of today retire, they will be provided by the next generation. The weakness of this model is that people are not "storing up grain against the famine" and so it has a lot of uncertainties and risks. For example, we cannot guarantee that the future economy of Hong Kong will enjoy a steady
growth and that the general public will have an improved standard of living. Thus, it is highly uncertain whether the next generation can support for the future retirees. This is particularly so when the rate of contribution will have to be raised in response to the rapidly ageing population. The change in ratio between the contributors and the beneficiaries will make the scheme all the more unstable. Therefore a saving plan that provides for a rainy day is both necessary and desirable. It can not only lower the risks inherent in the arrangement of the younger generation to provide for the older generation, but also lessen the future commitment to be undertaken by the society of Hong Kong.
However, we cannot, at the same time, rely solely on a self-help contributory saving scheme. On the one hand, such a scheme fails to safeguard the post-retirement life of those with special needs, as mentioned in my first point, and on the other, it does not allow the full play of the spirit of mutual assistance and the function of wealth redistribution, both of which are the characteristics of a social security system. In the present society, the spirit of sailing in the same boat should be advocated. Furthermore, retirement problem is not just an individual issue, it
should naturally be solved with joint communal efforts.
Based on the above mentioned factors, I propose that the future retirement protection scheme should incorporate the two models of social security and contributory saving. Such a mixed model will reduce the burden on the future society, redistribute wealth and provide for the post retirement life of workers presently in their middle or old age as well as those without work. It is thus worthy of consideration by all parties concerned. In fact, such a mixed model has a proven record of effectiveness elsewhere.
Fourthly, different sectors should be encouraged to set up an improved retirement scheme. At the moment, the retirement schemes to be introduced by the Government will, I believe, merely set the minimum standard and cannot replace the schemes implemented in different trades and industries. In fact, every enterprise and trade has its own characteristics. It is naturally the obligation of employers and employees to devise a retirement scheme that best meets their needs in the light of these characteristics. I also think that it is very important to set up a mechanism of negotiation so that employers and employees can join hands to formulate a retirement scheme that are tailor-made to their needs.
The above principles must be taken into consideration when formulating the
retirement scheme. The Government must not work behind closed doors and must understand that it is very important to allow the public to participate in making decisions which are closely related to their interests. The Administration must not close its doors to the public just to avoid trouble. Since the Government has now set up an inter-departmental working group to study the issue, I suggest that a consultative body, comprising representatives from employees and employers, professionals and other public representatives, should also be set up to take in public opinions so that the devised scheme will not become a target of criticisms.
Mr Deputy President, I know that the Honourable Henry TANG will move an amendment to my motion. If employers of Hong Kong had, like the Honourable Henry TANG, agreed to set up a Central Provident Fund years ago, and had not obstructed the execution of the proposal made by the labour sector, I believe I need not move this motion today. This sudden change in attitude of the Honourable Henry TANG cannot help but put people into speculation. As we all know, the labour sector and I have been demanding for the establishment of a Central Provident Fund. However, the
Government has repeatedly refused this proposal. On the other hand, the Executive Council annouced a month ago that it had decided to put forth legislation for the implementation of compulsory retirement protection. Besides, the Government has formed a working group, comprising three policy branches and four departments, to hold meetings every week to examine a protection scheme. It has also undertaken to submit the proposal for a protection scheme within a year. If we should ask them to shelve their work now and reconsider a Central Provident Fund, I am afraid we would be giving the Government or some employer's organizations the excuse to delay or oppose the formulation of a scheme that otherwise could have effectively resolved the livelihood problem of the retired workers and the elderly. If we still quibble over this technical problem which is not of the most importance, I am afraid that the general public will have to wait a long time before they can enjoy their right of getting retirement benefits. At present, it is most important to make the first step forward so that the elderly and the workers of Hong Kong can practically enjoy retirement benefits. My motion does not rule out any concrete models. It only
states some demands in principle. I hope that such demands can gain the consensus of all Members of this Council.
Lastly, no matter what results are derived from today's debate, I hope that the Government can fulfill its promise of devising a retirement scheme within a year and will make no delays.
Mr Deputy President, I so move and oppose the amendment motion moved by the Honourable Henry TANG.
Question on the motion proposed.
DEPUTY PRESIDENT: The Clerk has received notices of amendments to Mr TAM Yiu-chung's motion from Mr LAU Chin-shek and Mr Henry TANG. The two amendments are in fact identical and only one of them should proceed. I understand that Mr LAU Chin-shek has agreed that the amendment be moved by Mr Henry TANG. His amendment has been printed in the Order Paper and circulated to Members. I propose to call on Mr Henry TANG to move his amendment now so that Members may debate the motion and the amendment together.
MR HENRY TANG moved an amendment to Mr TAM Yiu-chung's motion: "To replace the words between "welcomes" and "urges Government" by the following:
"urges Government to reconsider a Central Provident Fund before deciding on the introduction of legislation for the implementation of a compulsory retirement protection scheme, and""
MR HENRY TANG: Mr Deputy President, I am asking the Administration to reconsider a Central Provident Fund in its deliberation of a compulsory retirement scheme; it means exactly just that, to reconsider. In other words not to rule out the possibility of a Central Provident Fund or a retirement scheme with government participation in preference to a compulsory retirement at such an early stage of a study by the working party set up by the Education and Manpower Branch. I am asking for an open mind. I for one cannot really decide at this early point in time, without further study and analysis, whether a central fund is preferable to a compulsory retirement scheme or vice versa. I am not advocating the implementation of a Central Provident Fund nor am I advocating a delay in the consideration of a retirement scheme. However, since this scheme will affect every single wage earner of Hong Kong, it is my belief that it is our responsibility to the citizens of Hong Kong to exhaust all possibilities in securing the best value for money on our contributions to a retirement scheme. Private retirement funds managed by banks, insurance companies, actuaries and the like, may in certain circumstances be more effective and accrue better earnings but
sometimes may also be illusory in practice, particularly when it involves such a large sum of money. Hong Kong's three major sectors, namely, the manufacturing, finance/banking and the service sectors employ around 1.9 million people and made a total payroll of approximately $39.6 billion, in the first quarter of this year. Annualized payroll will be around $158 billion. Even at 5% per year it will amount to nearly $8 billion, regardless of whether it is a central scheme or an aggregate of compulsory schemes. This enormous amount of money, if allowed to move in the market without a centralized co-ordinating and /or monitoring mechanism, could easily create disruption to our financial market.
Carefully drafted legislation may in some way assist in the implementation of the proposed compulsory retirement scheme; however, many technicalities and enforcement procedures would have to be carefully devised before the scheme should be given the actual green light. It matters not so much whether the retirement scheme is one imposed by law on the private sector or if it is one administered centrally with government participation. The underlying principle is that it is intended as a retirement fund and should be a retirement fund, no more and no less. Withdrawals from the fund for any other purposes should not be allowed until or unless the worker reaches the stipulated retirement age, dies or emigrates permanently. (Retirement benefits in the form of a pension or a lump sum payment will be deliberated at a later stage by the working party.)
When we talk about a retirement fund we are thinking of old age; we think of financial security at a time when we are not allowed to work or to produce income. If our fund is managed by the private sector, banks, insurance companies or actuaries and the like, will the bank or actuary still be around by the time we are about to collect our funds? Will the Government now give us a guarantee that if we entrust our hard earned money to reputable private fund managers, we would definitely be able to get it back years from now? Is it reasonable for us to expect a guarantee from the Government that such actuaries would remain intact or still operating in Hong Kong 10 or 20 years down the road? And who is ultimately responsible for compensating the pensioners when an insurance company or actuary defaults or goes into liquidation? Does the ultimate liability of a mismanaged fund then fall back onto the employer? And if so which employer: the last employer, the intermediate or all employers along the line of a person's working life, and how do we trace them? Is it conscionable to boomerang the responsibility back to the employers after they have discharged their duties with care and in due diligence and good faith? I say not. Or is the Government going to tell us that it would just let these poor people who have slogged away all
their lives and made contributions month by month, year on year only to find that at the end of it all, their hard earned cash may vanish through no fault of theirs? Again, I say not. Can we rightfully call this security? Surely these would be fundamental questions we need to address if we were to opt for a heterogeneous compulsory retirement fund.
Facilitation of a retirement scheme true to its name requires transferability from one scheme to another and poses a wide array of management as well as technical problems. Under private schemes, employers and employees are free to decide on issues ranging from selection of actuaries, the percentage of contributions to be made by both parties, subject to statutory minimums, to the quantum of contributions receivable on the employer's contribution in the event of resignation or change of job. When an employee changes employment, an area of contention could arise: is he/she entitled to the employer's portion on top of a statutory minimum or a percentage of the contribution since he/she has not served the required number of years? And during this period of transfer, a time gap is most likely to occur resulting in the yield loss. The burden for the cost of managing such transfers will surely be borne by either the employer or employee or both, further adding to the burdens of the parties.
Currently, Hong Kong has already in force several pieces of employment legislation to ensure the well being of our workforce by stipulating various compensation schemes. Such legislation is continually adjusted and enforced with diligence by the Labour Department. The implementation of a retirement scheme will create some irregularities such as overlapping benefits or double payments being made by the employer. I believe we should amend our employment legislation to prevent overlapping benefits subject to a transitional period to iron out these irregularities.
Whilst the proposed scheme is intended to be a compulsory arrangement enforced by law, we should consider a possibility where the employees could be given the option to decide if they wish to join any particular retirement scheme recommended by the employer. Employees could have the right not to join any retirement scheme if they do not want to. And, by the same token, employers should not be forced to make a one-sided contribution to the retirement funds.
I would like to point out that in our free market environment, fund managers anxious to attract more business would invariably try their best to gain higher
returns by investing in higher yield products. The higher the yield the greater the risk. Not to mention the effect of such a large sum of money flowing into the financial market, are our pensioners sufficiently guaranteed under the vagaries of competition? What measures does the Government have to ensure the proper handling of our workers without disruption to the financial markets, and yet at the same time not to stifle the operations of the fund managers? Are we unfairly asking the Government to juggle too many eggs in the air without breaking any? These and other uncertainties are some of the issues we need to scrutinize and consider exhaustively if we were to turn down the notion of establishing a Central Provident Fund or a government participation scheme for a compulsory private retirement scheme.
There are many ramifications and repercussions which the Government may have to deal with in time if a compulsory retirement scheme is to be imposed. I therefore urge that the Government in considering a compulsory retirement scheme should at the same time reconsider a centrally administered retirement fund or a form of retirement scheme with government participation.
Mr Deputy President, with these remarks, I move the amendment. Question on the amendment proposed.
CHIEF SECRETARY: I should like to comment briefly on the amendment moved by Mr Henry TANG to Mr TAM Yiu-chung's motion. The Secretary for Education and Manpower will be speaking at the end of the debate, setting out the Government's position on Mr TAM's motion.
The amendment urges the Government to reconsider the establishment of a Central Provident Fund before deciding on the introduction of legislation for the implementation of a compulsory retirement protection scheme. Members will know that the question of a Central Provident Fund has been examined very carefully in the past. It has been thoroughly debated in this Council on several occasions; the last time that it constituted the subject of a motion debate was on 10 July 1991, referred to by Mr TAM. On that occasion the Secretary for Education and Manpower explained in some detail the reasons for which the Government did not favour a Central Provident Fund. I do not want to go over the ground in detail again, since the arguments are fully documented in Hansard, but I would like to make it clear that the Government's position has not changed; we continue to have major reservations about a Central Provident Fund. These include, in particular, the following points:
Firstly, the creation of a Central Provident Fund would promote state enterprise at the expense of private enterprise. That does not sit comfortably with Hong Kong's way of doing things; nor, I might say to Mr TANG, with the businessman's way of doing things.
Secondly, a Central Provident Fund would be a single institutional investor of enormous size and power. Its effect upon the financial markets and upon the economy would be unsettling at best, and dangerous at worst.
Thirdly, the existence of a large source of funds to meet government borrowing could generate pressures for a less responsible fiscal policy.
Mr Deputy President, given these fundamental points of principle, I do not see what further purpose would be served by reconsidering a Central Provident Fund. The issues involved in setting one up are immensely complicated and could take many additional months to carry out. I am not doubting Mr TANG's motives in introducing the amendment. I am sure he is not intending this to be a way of delaying the introduction of retirement protection. But whether he is or he is not, that would certainly be the effect of accepting his amendment. I believe it would be a much more meaningful and profitable way of using everybody's time to get on with the examination of other practicable means of achieving the community-wide protection that we need as soon as possible.
Mr Deputy President, my official colleagues and I cannot support the amendment moved by Mr TANG.
MR HUI YIN-FAT (in Cantonese): Mr Deputy President, I am sure you all must have noticed that the media have generally described as a "dramatic" turnabout the Executive Council's decision in October to accept in principle the Government's proposal to implement the compulsory retirement scheme. This dramatic move embodies a political decision made in view of the vote of this Council. I have contacted the social work sector, in particular social workers and labour representatives on the front-line through various channels to hear their views and initial response to the matter. What impressed me most was they thought that we should not slacken the future monitoring work because Executive Council's agreement in principle could be extremely flexible and a lot of uncertainties and intangible elements were involved. Moreover, the
Government had a past record of eating its own words, especially when social welfare was concerned.
Nevertheless, I am of the view that Hong Kong people should stop speculating on the Government's motive behind relinquishing the position it had maintained for over 20 years, or wasting any more time in arguing over whether or not to set up a retirement scheme. The fact is our political and economic development will not allow the issue to drag on any longer. The research report I forwarded to Honourable Members recently has already given a detailed analysis of the situation and I will not repeat it here. Rather, I would appeal to this Council and members of the public to closely monitor the formulation of the social security scheme by the Government to ensure that such a scheme will adequately take care of the retirement life of all employees in Hong Kong.
I think the success of the future compulsory retirement scheme, in whatever form it may be, will hinge on the endorsement and support from employers and employees. The Government should therefore take into full consideration the following principles in determining the details of the scheme:
(1) The scheme which is meant to benefit all employees should be made compulsory through legislation. All companies regardless of size, and all self-employed and employees regardless of their income levels should be required to join.
(2) In order not to affect the mobility and self-adjustability of the labour market, the scheme should be transferable to ensure that pensions can only be claimed upon retirement or total incapacity.
(3) Since average employees will lead quite a long retirement life, if the Government should consider introducing a contributory scheme, the rates of contribution for employers and employees at the initial stage should not be lower than 5% of the employee's salary. Otherwise, the scheme will not be able to achieve the purpose of providing adequate retirement protection. Also, there should be a higher contribution rate for long service employees near the age of retirement.
(4) For lower-income workers barely above the poverty line their contributions should be paid by the employers on their behalf. I suggest that employees earning less than $4,000 a month should fall within this category.
(5) In future, whether the massive fund accumulated under the scheme is to be
entrusted to the Government, or to be managed by any recognized and reputable banks or insurance companies, it should be the responsibility of the Government to guarantee that the employees can receive the pensions due to them upon retirement because the employees have virtually no choice in the matter but to trust the Government.
(6) A management board comprising representatives from the Government, employers, employees and professionals in related fields should be set up upon the implementation of the scheme to monitor and manage its overall operation, including investments of the fund. The board should have the status of a statutory body and be required to present reports regularly to this Council.
(7) The six principles above can only take care of the productive employees. For those who are born disabled or incapacitated because of accidents, or people who do not have a stable income, it is the incumbent duty of the Government to look after them. The Government should not try to replace existing social security programmes or abolish the Protection of Wages on Insolvency Fund and the Long Service Payment with the introduction of the retirement scheme because each of these schemes serves a distinctly different purpose.
(8) In order that future policies on the retirement scheme can command the support of the public, I propose that the Administration should set up as soon as possible a provisional consultative council comprising representatives of the Government and civic organizations and should report regularly to relevant OMELCO panels on the progress of the matter. It would be necessary to publish a Green Paper to solicit the views of the public before a final decision is made. But all these should be done on the condition that the introduction of the retirement scheme would not be procrastinated.
Mr Deputy President, as I pointed out earlier, both the social work and labour sectors have expressed doubt about the determination and sincerity of the Government in implementing the scheme. Some people are also worried that the stalemate over the Central Provident Fund issue will give the Government yet another excuse for rejecting or delaying the introduction of a retirement scheme. I believe that the only way to dispel such worries is to translate words into action as soon as possible to avoid further complications. Although I have been a persistent advocator of the more desirable Central Provident Fund scheme, I am now prepared to accept the
Government's decision to implement a compulsory retirement scheme, having taken into account the urgency of the matter and the reality that the Central Provident Fund
scheme has already been rejected by the Government. As a matter of fact, the initial findings of my recent questionnaire survey also showed that the majority of social workers supported such a view. For the above reasons, I maintain that the original motion is more desirable.
All in all, the Hong Kong Government's administration during the transitional period, especially its commitment in social welfare, is causing more and more anxieties. On the other hand, there will be less and less opportunities for the Government to recover its credibility and show concern to the general public before the handing over of sovereignty. The introduction of the compulsory retirement scheme will provide such an opportunity. I hope the Government will grasp it well. Such a scheme is urgently needed now both from the political and economic points of view. The Government should take prompt actions to implement the compulsory retirement scheme as soon as possible and put an end to a 20-year-long debate.
Mr Deputy President, with these remarks, I support the Honourable TAM Yiu-chung's motion.
MR NGAI SHUI-KIT (in Cantonese): Mr Deputy President, the livelihood problem of the elderly that we are facing is in fact an issue on social welfare. The arguments for the Government in the provision of this kind of social welfare being it has to fulfil its minimum obligation of providing a safety net for the disadvantaged elderly. As for offering protection to employees after retirement, the employees should plan for the future themselves either through savings or joining the provident fund schemes. It must be pointed out that all these matters are irrelevant to the system of social welfare, and the provident fund scheme should come under the labour policy. The Government should never attempt to blend the issues of social welfare policy together with that of labour policy, unless the Government intends to set up a comprehensive social security system, which should be considered as a separate issue then. However, so far the Government has not yet indicated that it will launch such scheme.
Mr Deputy President, judging from this perspective, the motion put forth by the Honourable TAM Yiu-chung would only confuse these two questions. A convoluted argument would only bring about convoluted results. I have to point out that such convoluted situations would only result in two dangerous consequences:
(1) The Government would not seriously and in great depth review the present policy for the elderly. Instead, it will rely on a compulsory retirement scheme to solve the present problems. It is in fact a self-deceptive way to evade from the reality;
(2) The Government implement the compulsory retirement scheme in order to solve the pressing problem of livelihood of the elderly. Then, a large number of workforce will be deprived of their autonomy in planning for the retirement life.
As a matter of fact, ever since we were hastily informed in the Legislative Council In-house meeting held on 1 November 1991 by the Government that the Executive Council has agreed in principle on the implementation of compulsory retirement scheme, the Government did not reveal any details concerning the retirement scheme, not to mention the further disclosure of more specific particulars about the scheme.
Obviously, since the Government fails to provide us with the contents of the so called compulsory retirement scheme, how can we debate on this subject now and voice our opinion with grounds and justifications? Some people say that to have a debate on the unannounced compulsory retirement scheme at present is parallel to groping an elephant by a blind person. In my view, there is no existence of an elephant, maybe there is a tiger before us. Under such circumstances, it would be too dangerous. Thus, before we have any specific information about the options, I do not think it is the right time to debate now.
Mr Deputy President, because of the said reasons, I oppose to the motion moved by the Honourable TAM Yiu-chung. As for some people who hold that we should re consider the setting up of Central Provident Fund Scheme, Mr Deputy President, I am not speaking against the Government's efforts in the encouragement of individual private provident fund scheme but all along I have been opposing the setting up of a compulsory provident fund. The reasons are manifold and I do not intend to
reiterate here so as not to waste the time.
With these remarks, I oppose the amendment motion moved by the Honourable Henry TANG.
MR PANG CHUN-HOI (in Cantonese): Mr Deputy President, first of all, I would like to declare my stance. I support the setting up of a Central Provident Fund to be managed centrally by the Government and funded by contributions from the Government,
employers and employees. On top of retirement benefits, the scheme should be expanded to provide comprehensive social security such as medical benefits.
I learn that a number of my honourable colleagues from the commercial and industrial sectors have changed their mind and are now prepared to support the idea of a Central Provident Fund. My feelings are mixed. Representatives of the labour sector have undergone a hard time stating their case in this Council again and again, trying to change the heart of the employers. Today, their arduously efforts finally bear some little fruit. I would not try to speculate on the reasons behind this sudden change of mind. On the premise of securing greater benefits for the Hong Kong people, I must say that I welcome this change for the better. I welcome this kind of "back pedalling".
I am happy that the Government has finally admitted its mistakes and is now willing to legislate for a compulsory retirement benefits scheme. But this is far from laudable because the Government is still clinging to a conservative approach and intends to pass all the responsibility to the employers and employees. There has not been any breakthrough at all. However, to be pragmatic, I welcome the
introduction of a compulsory retirement scheme as an interim measure, and would like to make the following suggestions.
The success or otherwise of the compulsory provident fund scheme hinges on the role played by the Government. The Government is therefore duty-bound to participate, co-ordinate and monitor the operation of the scheme. This will help reduce the administrative and management costs to be borne by medium and small enterprises and will strengthen the employees' trust in the credibility of the scheme.
Since it will probably take more than a year for the compulsory retirement benefits scheme to be worked out and put into force, special attention should be paid to the cases of retired employees and those who are about to retire to ensure that these people will also be able to benefit from the scheme. Moreover, the Government should reconsider introducing legislative amendments regarding the controversial issue of lowering the qualifying age for Long Service Payment from 65 to 60.
Turning now to contributions, in order not to over-burden the lower-income group, I suggest that the rates of contribution should vary according to employees' income levels. Those earning an income below the personal tax allowance level should not be required to contribute. Their shares of contribution should be paid by the
Government on their behalf. Consideration should also be given to requiring employers to pay a bigger contribution for employees with longer years of service.
Mr Deputy President, although I represent the labour sector, I also support the argument that "the compulsory retirement benefits scheme should be agreed to and supported by both the employers and employees". I would like to remind Honourable Members that while free competition in Hong Kong has brought out the best potential of our workforce, employers should reward employees who have contributed their youth and talents with some form of encouragement and consolation on top of their
remuneration. I believe that this is in the interest of Hong Kong's long-term economic development.
Employers should appreciate that an employee is not just a "priced commodity" which draws a pay. In fact, the best deal should be one in which services with a human touch are offered.
I appeal to Honourable Members representing the interests of the employers to join hands with us to overcome the practical or emotional obstacles to the implementation of the compulsory retirement scheme.
Mr Deputy President, I must say that "compulsory" is not a good word to use here. In an advanced and civilized city like ours, what we would like to see is a social security system formulated on the initiative and with the support of both the employers and employees. Of course, I shall be all the more delighted to see the central government, being the biggest employer, taking up its share of the
responsibility.
Mr Deputy President, what I would like to advocate is a "capitalistic system of dignity". I am worried about the amendment motion moved by the Honourable Henry TANG. When the amendment motion was being drafted, voices against the introduction of a compulsory retirement protection scheme were still loud in this Council. Many people cited some arguments against the introduction of a Central Provident Fund in each and every adjournment debate. But I am puzzled now that these same arguments are used in today's amendment motion to advocate a Central Provident Fund. I did propose to the colleagues concerned that the word "before" in "..... urges the
Government to reconsider a Central Provident Fund before ....." be amended as "after". But given the two days' notice specified by Standing Orders, I cannot move a further amendment.
Mr Deputy President, I support that the feasibility of a Central Provident Fund be given further consideration after a compulsory retirement protection scheme is implemented by the Government. I do not wish to see that the introduction of a compulsory retirement protection scheme should be delayed, or shelved.
Mr Deputy President, as a "mouthpiece" for the people, I have to be careful with every word I use in my speech in this Council as I have to be accountable to the people for my every word and deed.
Mr Deputy President, with these remarks, I support the Honourable TAM Yiu-chung's motion.
MR LAU CHIN-SHEK (in Cantonese): Mr Deputy President, I was at one time overjoyed to learn that the Executive Council had decided in principle to establish a compulsory system of retirement protection. It struck me as a relatively positive outcome in the strenuous fight for retirement protection in which the labour sector had engaged itself for many years, although up till now we are as yet unable to tell why such a decision had been made all of a sudden. However, when we do have time to study it in depth, I cannot refrain from expressing disappointment that concurrent with its decision to implement a compulsory retirement protection scheme the Government has attempted to shift responsibility by insisting on not considering setting up a central provident fund system. To launch an overall protection scheme, government participation is very important and its responsibilities cannot be shifted away. Today, I propose to discuss the Government's role in the implementation of a
retirement protection scheme. First of all, I must settle accounts with the Hong Kong Government!
Retirement protection repeatedly voted down
According to the latest 1991 census, 482 040 people, representing 8.7% of our population, are aged 65 or above. 68 000 of these people, representing 14%, are still gainfully employed. Of this number which is close to 70 000, 48 000 are men. In other words, if we simply count the male population of 65 years of age or above, 25% of them are still in employment. The aging population further intensifies the need for retirement protection. If the problem is still unresolved, there will soon be social crises. Some are of the opinion that the prompt implementation of a compulsory
provident fund scheme as from now cannot solve the problem of livelihood facing those soon to retire or already at retirement age. The 60 000-plus old people who still have to work for their living will give a bitter laugh at the provident fund scheme. Yes, this is indeed true. But I have to ask why the Government delayed time and again the establishment of a retirement protection scheme, with the result that our old workers and those nearing retirement age cannot have the protection they need after retirement.
The proposal to set up a "contributory retirement protection" scheme emerged in society more than 20 years ago. The Government however ruled out the proposal once, twice and thrice and hence indirectly allowed the ripening of today's bitter fruit!
In 1967, an interdepartmental working group completed the study of social security and proposed to the Government the implementation of public assistance and social insurance schemes. The group pointed out saying: "Some have argued that the system of social security should not be implemented in Hong Kong because it is a system that requires enormous financial backing and results in everyone enjoying the living luxuries provided by the welfare state. We cannot accept such. Similarly, we think it is equally unacceptable to say that funds needed for the implementation of a social insurance system will be too expensive for society. On the contrary, the price for the absence of a social insurance system will be high because the problem deteriorates
with time and the cost can be expected to rise day after day. If there is no contributory social insurance system, there will be no other way than utilizing public funds to pay for all necessary expenditure in the future."
The report of the working group clearly pointed out the necessity for establishing public assistance and contributory social insurance schemes. Unfortunately, the Government only accepted half of the group's recommendations. In 1971, the Government set up a public assistance scheme but nothing came of the proposal for social insurance. The reason given was that the people of Hong Kong would not welcome a compulsory and contributory scheme and in any case the administrative cost would be too high.
In 1977, the Government released a Green Paper: Help for those least able to help themselves -- A Programme of Social Security Development. The paper mentioned a semi-voluntary contributory welfare scheme to cover injuries, illnesses and deaths. As what had happened ten years before, the Government again vetoed the "contributory" protection scheme.
The Hong Kong Christian Industrial Committee to which I belong started studying social security as early as 1977. Various feasible methods were researched into and a survey was conducted from 1976 to 1977. 500 workers were interviewed on their opinions of a contributory scheme. 84% indicated willingness to join; one-third indicated willingness to put in 5% or more of their income as contribution. In the early 1980s, the Christian Industrial Committee formally proposed a central provident fund scheme drafted jointly by employers and union leaders.
In or around 1987, there was wide concern within society over the question of setting up a central provident fund. Again, the Government vetoed the proposal for the establishment of a compulsory provident fund scheme and opted, in response to public request, for a supervision system for private provident funds, improvements on social security and amendments to the long service payment scheme.
The reserved attitude of the Government more than 20 years before towards compulsory, contributory social security schemes in effect allowed the problem to intensify more and more. Today, one may say that dawn has broken.
The question before us now is how to put together as soon as possible a scheme that will give effective retirement protection. I think this scheme should at least cover three kinds of protection.
First, security protection. The Government should stand guarantee for the investment of the contributed funds and the liabilities arising therefrom.
Second, transfer protection. When an employee changes to a new job, the contribution (including that paid by the employer and the Government) should be transferable and there should not be any loss resulting from change of jobs.
Third, retired life protection. Employees should have the protection that upon retirement those with pay below the median figure will get not less than 45% of the median figure as monthly pension. As for those with pay above the median figure, they should receive 30% to 35% of their original pay as monthly pension. The above is the standard practised in developing countries. The higher of the two should be adopted to ensure that the quality of life in one's retired years is maintained. There is no doubt that government participation and commitment will be essential to successful implementation of the above. Perhaps, in more concrete terms, I think the Government must be committed to the following five aspects of work: