1 HONG KONG LEGISLATIVE COUNCIL -- 11 March 1992 1 HONG KONG LEGISLATIVE COUNCIL -- 11 March 1992 HONG KONG LEGISLATIVE COUNCIL -- 11 March 1992 1 HONG KONG LEGISLATIVE COUNCIL -- 11 March 1992 1
OFFICIAL RECORD OF PROCEEDINGS
Wednesday, 11 March 1992
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, C.B.E., 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 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 EDWARD HO SING-TIN, O.B.E., J.P. THE HONOURABLE RONALD JOSEPH ARCULLI, J.P.
THE HONOURABLE MARTIN GILBERT BARROW, O.B.E., 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 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 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 GILBERT LEUNG KAM-HO
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
DR THE HONOURABLE SAMUEL WONG PING-WAI, M.B.E., J.P. DR THE HONOURABLE YEUNG SUM
THE HONOURABLE HOWARD YOUNG
THE HONOURABLE ZACHARY WONG WAI-YIN
ABSENT
THE HONOURABLE DAVID LI KWOK-PO, O.B.E., J.P. THE HONOURABLE LAU WONG-FAT, O.B.E., J.P. THE HONOURABLE VINCENT CHENG HOI-CHUEN
THE HONOURABLE FREDERICK FUNG KIN-KEE
THE HONOURABLE NG MING-YUM
THE HONOURABLE JAMES TO KUN-SUN
DR THE HONOURABLE PHILIP WONG YU-HONG
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
MR ALISTAIR PETER ASPREY, O.B.E., A.E., J.P. SECRETARY FOR SECURITY
MRS ELIZABETH WONG CHIEN CHI-LIEN, I.S.O., J.P. SECRETARY FOR HEALTH AND WELFARE
MR RONALD JAMES BLAKE
SECRETARY FOR WORKS
MR MICHAEL SZE CHO-CHEUNG, I.S.O., J.P. SECRETARY FOR CONSTITUTIONAL AFFAIRS
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. Subsidiary Legislation L.N. No.
Public Revenue Protection (Inland Revenue)
Order
1992................................................................. 43/92 1992................................................................. 43/92
Public Revenue Protection (Dutiable Commodities)
Order
1992................................................................. 44/92 1992................................................................. 44/92
Public Revenue Protection (Stamp Duty)
Order
1992................................................................. 45/92 1992................................................................. 45/92
Public Revenue Protection (Entertainments Tax)
Order
1992................................................................. 46/92 1992................................................................. 46/92 Public Revenue Protection (Rating) Order 1992.................... Public Revenue Protection (Rating) Order 1992.................... 47/92
Merchant Shipping (Safety) (Navigational
Equipment) (Amendment) Regulation 1992.................... 49/92 Equipment) (Amendment) Regulation 1992.................... 49/92
Merchant Shipping (Safety) (Use of Signals of
Distress) (Amendment) Regulation 1992........................ 50/92 Distress) (Amendment) Regulation 1992........................ 50/92
Shipping and Port Control (Amendment) Shipping and Port Control (Amendment)
Regulation
1992.......................................................... 51/92 1992.......................................................... 51/92
Public Health and Municipal Services (Public
Pleasure Grounds) (Amendment of Fourth
Schedule) (No. 2) Order 1992....................................... Schedule) (No. 2) Order 1992....................................... 52/92
Rectification of Errors (No. 2) Order 1992........................... 53/92
Food Business (Regional Council) (Amendment)
Bylaw
1992................................................................. 54/92 1992................................................................. 54/92
Frozen Confections (Regional Council) Frozen Confections (Regional Council)
(Amendment) Bylaw 1992............................................ 55/92
Milk (Regional Council) (Amendment) Bylaw 1992............... 56/92 Milk (Regional Council) (Amendment) Bylaw 1992............... 56/92
Offensive Trades (Regional Council) (Amendment)
Bylaw
1992................................................................. 57/92 1992................................................................. 57/92
Places of Amusement (Regional Council)
(Amendment) Bylaw 1992............................................
58/92
Swimming Pools (Regional Council) (Amendment)
Bylaw
1992................................................................. 59/92 1992................................................................. 59/92
Places of Public Entertainment (Licences)
(Specification of Fees) (Regional Council
Area)
Notice............................................................... 60/92 Notice............................................................... 60/92
Sessional Papers 1991-92
No. 60 -- No. 60 -- Hong Kong P Hong Kong P Hong Kong Polytechnic olytechnic
Annual Report 1990-1991 with Balance Sheet
at 30 June 1991 and Income and Expenditure Account
for the year ended on that date
No. 61 -- No. 61 -- Securities and Futures Commission Securities and Futures Commission
Approved Estimates of Income and Expenditure
for the Financial Year ending 31 March 1993 for the Financial Year ending 31 March 1993
Green Paper
Green Paper by the Working Party on Rehabilitation Policies and Services on Equal Opportunities and Full Participation : A Better Tomorrow for All March 1992
Miscellaneous
White Paper on the Annual Report on Hong Kong 1991 to Parliament
Addresses by Members
Hong Kong Polytechnic Annual Report 1990-1991 with Balance Sheet at 30 June 1991 and
Income and Expenditure Account for the year ended on that date
MR STEPHEN CHEONG: Mr Deputy President and colleagues of the Legislative Council, as Chairman of the Hong Kong Polytechnic Council, it is both my honour and pleasure formally to present to you the 19th Annual Report of the Hong Kong Polytechnic, covering the period 1 July 1990 to 30 June 1991.
The year under review has seen a change in top management, with the retirement The year under review has seen a change in top management, with the retirement of Professor John CLARK, who served as Director from early 1985 to November 1990, and the assumption of duty by a former colleague of this Council, Professor POON Chung-kwong, as Director from January of 1991. On behalf of the Polytechnic Council, I am pleased to report that under Professor POON's leadership, and with the continued support of the Government, industry and the community, the Polytechnic has been able to strive ahead with vigour during the past year in meeting the challenges, in ways that are totally consistent with its overall mission of training the much needed professional manpower for the Hong Kong community.
The year 1990-91 has again been a year of progress and achievement across a wide The year 1990-91 has again been a year of progress and achievement across a wide front, including developments in academic programmes, growth in the extent of applied research, a build-up of provision in continuing education, and the further development of specialist centres, emphasizing at the same time the polytechnic's long-standing philosophy of partnership with industry and commerce.
In this brief address, however, I can do no more than highlight some of the more major events and developments during the year. For a more comprehensive overview, I invite Members of this Council to study the published annual report.
Today, the Hong Kong Polytechnic is the largest tertiary institution in Hong Kong, with more than 26 000 full-time and part-time students attending a wide range of courses at various levels, from certificates to higher degrees. The success of this institution is no doubt a source of pride to us all. It is important, however, to realize that the polytechnic cannot continue to develop to meet the changing needs of Hong Kong and in particular, cannot successfully fulfil its current four-year academic development plan which, I may add, is an integral part of the Government's overall plans for the expansion of degree level education. We cannot do that without the full support of the Government and the community. In this connection, I wish to draw this Council's attention to the fact that the level of recurrent grant made available to the Polytechnic for the single interim year 1991-92 has been cut
significantly. Nevertheless, the Polytechnic Council directed the management to draw up and implement a set of wide ranging contingency measures, and I should like to take this opportunity to commend the Directorate and all members of the academic and administrative staff for co-operating fully in this respect and for maintaining a reasonable level of morale throughout this difficult period.
Now that the recurrent grant allocation for the triennium 1992-95 is known, I would like to take this opportunity to assure my fellow Members of this Council that the Polytechnic Council, and the management, will as usual do all that we can to ensure that every dollar is spent wisely and effectively in delivering the Polytechnic's triennial development plans.
I have made reference in previous annual reports to the pressure on the I have made reference in previous annual reports to the pressure on the Polytechnic's Hung Hom campus, and the need for the Polytechnic to have more space and accommodation. These pressures have again been manifest during the year under review and the Polytechnic has now made a formal proposal to the Government for consideration for a secondary campus, preferably located near the present campus. It is an important and pressing matter which requires urgent attention. I therefore look forward to support from our friends in the University and Polytechnic Grants Committee, the Government, as well as the community at large.
Mr Deputy President, I would like to highlight: Sir Gordon MacWHINNIE, one of the longest serving members of the Polytechnic Council and, currently its Deputy Chairman, joined the list of the Polytechnic's honourary graduates when the Degree of Doctor of Letters, honoris causa, was conferred on him at the 18th graduation ceremony. This is most certainly a well-deserved honour, in view of the great
contribution which he has made, and continues to make, to the well-being of the Polytechnic, and the Hong Kong community in general.
Also at the same ceremony, academic awards were conferred on 8 100 full-time and part-time graduates, bringing the total number of award recipients since its inception in 1972 to more than 100 000. This is truly a remarkable achievement.
Fellow Members of this Council may be aware that the Polytechnic will be entering its 20th year of operation. A full range of activities is now being planned to mark this important milestone in the development of the institution. I therefore believe that it is most fitting for me to make use of this opportunity to reiterate that we, at the Polytechnic, will continue to regard it as a major priority to strengthen and
reinforce the Polytechnic as a major degree-awarding institution in Hong Kong, developing it as a centre of excellence in teaching, research, and serving the needs of the community of Hong Kong in the years to come.
Green Paper on Rehabilitation "Equal Opportunities and Full Participation: A Better Tomorrow for All"
SECRETARY FOR HEALTH AND WELFARE: Mr Deputy President, tabled today is a Green Paper on Rehabilitation entitled "Equal Opportunities and Full Participation: A Better Tomorrow for All". The Green Paper is a summary of findings and recommendations of a working party appointed by the Governor, comprising mainly non-officials drawn from a cross section of the community. It was tasked to consider how rehabilitation
services should be further developed. Here I record my thanks for their time and participation.
The Green Paper has been the result of a true coalition of thoughts, of vision, and of a shared conviction.
The Green Paper Working Party has reviewed the basic principles and objectives of current rehabilitation policies and services. It has addressed the questions of medical and social rehabilitation and special education. It has examined important issues such as access, transport, manpower planning, training, employment,
legislation and representation, community and parental participation, public education and the need to break down barriers. It promotes the twin goals of equal opportunities and full participation.
Having regard to these goals, the Green Paper maps out strategies for the future. It outlines ambitious initiatives for the way forward. It advocates the need to influence the broad environment. It reaffirms the need to promote community participation. It reinforces the importance of positive attitudes.
Over 80 major recommendations are contained in this Green Paper. The annually Over 80 major recommendations are contained in this Green Paper. The annually recurrent cost of the more concrete and quantifiable ones is estimated to be $600 million at current prices.
I think the real triumph of any Green Paper lies not only in what is written, but in realizing realistically what is written. We need to make things happen, with
the guidance and the support of the community; only then can we, I think, celebrate our achievement.
In the light of competing claims for limited resources, there is always a need for prioritization, that which we consider to be the most important is given resources first. Prioritization will help us to focus, particularly in the face of perhaps a dilemma of choices.
The Green Paper is now published for public consultation and comments. The The Green Paper is now published for public consultation and comments. The consultation period is three months. Here I urge the public to send in their views. I specifically welcome advice on which areas covered in the Green Paper should be accorded early priority. Together we will set the scene for tomorrow, a better tomorrow for all.
MRS ELSIE TU: Mr Deputy President, may I have your consent to move that Standing Order 16(3) be suspended?
DEPUTY PRESIDENT: You have my consent.
MRS ELSIE TU: I am grateful for your consent for me to move this motion. The purpose of the motion is to remove the restriction on the number of questions for which an oral reply may be required so that six questions on the Order Paper may receive an oral reply whilst limiting Question Time to approximately one hour, at your
discretion.
Under Standing Order 16(3) where, in the opinion of the President, there will Under Standing Order 16(3) where, in the opinion of the President, there will be a debate on a substantive motion, no more than three questions shall require an oral reply. As Members are aware, there will be debates on substantive motions at all regular Legislative Council sittings up to the end of the current Session. If the number of oral questions is limited to three, Members will have to wait for a long time before they can raise an oral question in this Council. In order to remedy the situation, Members agreed at the Legislative Council In-House meeting on 28
February 1992 that Standing Order 16(3) be suspended at the Legislative Council sitting on 11 March 1992 on a trial basis to allow six oral questions on the Order Paper to be raised. With the new arrangement, the Question Time will be confined
to one hour, with each question taking not more than 10 minutes. I sincerely hope that my colleagues will co-operate so as to make this trial a success. If it proves to be successful, arrangements will have to be made for the relevant Standing Orders to be amended in due course.
Mr Deputy President, with these remarks, I beg to move.
Question proposed, put and agreed to.
Oral answers to questions
Labour protection to foreign domestic workers
1. MRS E 1. MRS ELSIE TU asked: Will the Government inform this Council whether considera LSIE TU asked: Will the Government inform this Council whether consideration will be given to extending the protection offered by the 1992 General Scheme on Importation of Labour such as protection from exploitation, extension of stay to find another job pending investigation, penalties for malpractices by employers and exclusion of such employers from participation in further contracts to cover foreign domestic workers? If not, why not?
SECRETARY FOR EDUCATION AND MANPOWER: Mr Deputy President, all foreign workers are subject to protection under Hong Kong law irrespective of sex, race and nationality. The same complaint mechanism applies to foreign domestic helpers and to workers imported under the importation of labour schemes. If they have any complaint against their employers, they can approach the Labour Department which will provide a conciliation service. If no settlement can be reached, their cases are referred to the Labour Tribunal for adjudication. They are subject to the "two-week rule" on limitation of stay: that is to say, they are required to leave Hong Kong within two weeks of the termination of their contract of employment. However, they can apply to the Immigration Department for extension of stay pending conciliation meetings, complaint investigation and court hearings. The employment of foreign domestic helpers has had a history of more than 15 years and both the foreign domestic helpers and employers are well aware of their rights and obligations.
Employers of foreign domestic helpers are subject to prosecution if they have Employers of foreign domestic helpers are subject to prosecution if they have committed offences under the Employment Ordinance or the Immigration Ordinance. The
records of offences provide useful information to the Immigration Department in deciding whether an employer is a suitable sponsor in future applications for employment of foreign workers.
MRS ELSIE TU: Mr Deputy President, may I ask the Secretary for Education and Manpower to answer my question about whether domestic workers will be given an extension of stay to find another job pending investigation? The Secretary must be aware that legal proceedings take from three to six months during which time the worker has to pay for renewal of visa and is not at present permitted to get another job.
SECRETARY FOR EDUCATION AND MANPOWER: Mr Deputy President, the circumstances in which foreign domestic helpers have their contracts terminated prematurely obviously vary from case to case. It is the Immigration Department's normal practice to allow a foreign domestic helper who has had her contract of employment terminated in
exceptional circumstances -- for example the emigration of the employer, or the death of the employer, or the financial hardship of the employer -- to change to a new employer. In addition, where there is evidence to show that a foreign domestic helper has been exploited by her employer, then the Immigration Department will also consider the application for change of employment sympathetically. Generally speaking, of course, foreign domestic helpers are brought in to work under specific contracts to specific employers and they are expected to serve under the same employer for the full length of the contract.
MR LAU CHIN-SHEK (in Cantonese): Mr Deputy President, will the Administration inform this Council how many imported foreign workers were subsequently able to find new jobs after they had been dismissed because they had complained against their employers?
What will be the fate of those imported foreign workers in the same position who are unable to find new jobs?
SECRETARY FOR EDUCATION AND MANPOWER: Mr Deputy President, I regret that I do not have the figures with me. I will provide them in writing after the meeting. (Annex I)
MR HENRY TANG: Mr Deputy President, the Secretary for Education and Manpower said in reply that the records of offences by employers provide useful information to the Immigration Department in deciding whether an employer is a suitable sponsor in the future. Now would the Secretary advise whether such past offences will categorically bar an employer from sponsoring any future application or whether such action is being considered in this current scheme?
SECRETARY FOR EDUCATION AND MANPOWER: Mr Deputy President, generally speaking, any application to import a worker, whether it is a foreign domestic helper or any other worker, is considered on its merits. Of course, if a prospective employer has a record of having committed offences against the Employment Ordinance or the
Immigration Ordinance, then this would be a consideration of substance which will be taken into account.
MRS SELINA CHOW: Mr Deputy President, how many domestic helpers who have breached the two-week rule have been prosecuted, say, in the last three years? What is the average length of sentence handed down on those convicted of the offence?
SECRETARY FOR EDUCATION AND MANPOWER: Again, Mr Deputy President, I regret I do not have the statistics with me. I will provide them after the meeting if possible. (Annex II)
MR MICHAEL HO (in Cantonese): Mr Deputy President, given that foreign workers in their countries of origin have to pay a substantial amount of money to the middle-men before they come to Hong Kong, could I ask whether the Administration has in place a mechanism to protect the workers before they come here, so that they will not be exploited by the middle-men?
SECRETARY FOR EDUCATION AND MANPOWER: Mr Deputy President, I think the requirements of any governments or organizations situated in the country of origin of foreign workers do not fall within the jurisdiction of the Hong Kong Government.
MR HOWARD YOUNG: Mr Deputy President, as foreign domestic workers by nature are slightly different from workers under the Importation of Labour Scheme in the sense that they are domestic and therefore live in the household of their employer, would protection by way of an extension of stay not prove awkward, if not impractical, because they will be living at the employer's premises while trying to find a job?
SECRETARY FOR EDUCATION AND MANPOWER: Mr Deputy President, very often foreign domestic helpers do make their own arrangements for accommodation while their stay is being extended. I also understand that the Consulate General of the Philippines, which is the country of origin of some 90% of the foreign domestic helpers working in Hong Kong, does provide assistance to Filipino foreign domestic helpers who need such help.
MR JIMMY McGREGOR: Mr Deputy President, does the procedure described by the Secretary to enable foreign domestic workers to seek other jobs in Hong Kong, where the employer has been at fault, also apply to workers from China?
SECRETARY FOR EDUCATION AND MANPOWER: Mr Deputy President, under the Importation of Labour Scheme, the Labour Department will provide assistance to any foreign worker who has been complaining of exploitation or other unfair treatment by the employer. In theory, the same applies to foreign domestic helpers and the local Employment Service is prepared to provide the same assistance to foreign domestic helpers in a similar position. In practice, however, foreign domestic helpers seem to have other ways in which they can deal with such situations. Very often, I think, they would tend to go back to the private employment agencies who arranged their initial placement in the first place.
Smuggling of unmanifested goods
2. MR ANDREW WONG asked (in Cantonese): As the smuggling of unmanifested goods into 2. MR ANDREW WONG asked (in Cantonese): As the smuggling of unmanifested goods into China by land still runs rampant, will the Government inform this Council whether there are incidents of vehicles attempting to cross the check points along the border by force or without undergoing inspection?
SECRETARY FOR SECURITY: Mr Deputy President, there is smuggling of unmanifested goods into China by land, I would not describe it as rampant. In 1991, 63 cases were detected involving goods to the value of some HK$36 million. The types of goods typically smuggled into China by land included video cassette recorders, computers, cameras and air-conditioners.
There were two incidents last year when vehicles crossing into China drove There were two incidents last year when vehicles crossing into China drove straight on after being directed to the Customs inspection area in Hong Kong. They were directed back to Hong Kong by the Chinese authorities. The incidents appear to have been the result of misunderstandings, as no contraband was found in either case. There is close co-operation between Hong Kong and Chinese Customs at the vehicular crossing points, and I would not expect problems of the type envisaged in the question to arise in future.
MR ANDREW WONG (in Cantonese): Mr Deputy President, could the Secretary inform this Council whether the issue has been discussed by the Border Liaison Group? If yes, does the arrangement agreed by the two sides provide for the immediate return of the vehicles involved to Hong Kong in the company and under the supervision of Chinese border control officers?
SECRETARY FOR SECURITY: Mr Deputy President, I do not think that in either case discussion by the Border Liaison Group was necessary. That channel is of course open to discuss problems if they became significant problems but, as I have said, we believe that these cases were simply a case of misunderstanding and they were resolved on the spot without difficulty.
MRS PEGGY LAM (in Cantonese): Mr Deputy President, will the Administration inform this Council how many vehicles reported lost were returned to Hong Kong by the Chinese side last year?
SECRETARY FOR SECURITY: Mr Deputy President, I do not think that is relevant to the original question. But I certainly cannot answer it now. I would have to give a written answer. (Annex III)
DEPUTY PRESIDENT: Yes. I would remind Members that the original question went to the number of vehicles crossing by force or without undergoing inspection.
MR PETER WONG: Mr Deputy President, will the Administration inform this Council what the most common means are of transporting stolen passenger vehicles from Hong Kong to China and what steps the Administration is taking to stem this flow?
DEPUTY PRESIDENT: Are you asking a general question, Mr WONG?
MR PETER WONG: I have asked what the means are by which stolen vehicles are transported to China.
DEPUTY PRESIDENT: That is outside the ambit of the main question. The main question relates to smuggling by vehicles crossing the border by force or without undergoing inspection.
MR JIMMY McGREGOR: Mr Deputy President, can the Secretary confirm that none of the seized unmanifested goods were in fact stolen in Hong Kong and that they were properly purchased here, in other words, that the only offence was the offence of not declaring these exports under an export declaration?
SECRETARY FOR SECURITY: Mr Deputy President, I believe that is the case. In practice, it is new electrical and electronic goods that constitute the very large proportion of smuggling into China, also, in some cases, cigarettes.
MR ANDREW WONG (in Cantonese): Mr Deputy President, the Secretary only mentioned in his reply that there were two incidents, without specifying the number of vehicles involved. Did it involve only one vehicle in each of the two cases, thus making it two in all or was the actual figure more than that? Moreover, how long is the waiting
time after the Chinese authorities have directed that the vehicles be returned to Hong Kong, that is, after crossing the border how long will it take before they are directed back to Hong Kong?
SECRETARY FOR SECURITY: Mr Deputy President, there were two vehicles involved, one in each case. I understand that the vehicles returned very quickly to Hong Kong within a matter of minutes. I should say that in practice I envisage it is almost impossible that a vehicle could cross from Hong Kong into China and then disappear. Once a vehicle has gone through the customs and immigration checks in Hong Kong, it will find itself invariably at the end of a long queue to undergo customs and
immigration checks in China. So, as I have said, I cannot see the sort of problem envisaged in the question arising.
MR STEVEN POON: Mr Deputy President, two incidents out of many vehicles crossing the border indeed form a very, very small percentage. But still it is our job to guard our border and not rely on the Chinese authorities. Can the Administration tell us whether there will be additional facilities installed at the checkpoints so that it will be absolutely impossible for anybody to cross the checkpoints without first being cleared by an officer?
SECRETARY FOR SECURITY: Mr Deputy President, I do not think that any further installations are necessary. As I said, this is not a problem.
Supervision of banks
3. DR CONRAD LAM asked (in Cantonese): In the light of the collapse of the Bank of 3. DR CONRAD LAM asked (in Cantonese): In the light of the collapse of the Bank of Credit and Commerce Hong Kong, will the Government inform this Council:
(a) whether consideration would be given to introducing legislation to mak (a) whether consideration would be given to introducing legislation to mak whether consideration would be given to introducing legislation to make more open the financial position of banks as a measure to protect the interests of the general depositors;
(b) whether the Government is aware of the presence of any "unrecorded (b) whether the Government is aware of the presence of any "unrecorded liabilities" in other banks apart from those which have surfaced in Bank of Credit
and Commerce; and
(c) if not, whether any comprehensive investigation will be made to ensure that (c) if not, whether any comprehensive investigation will be made to ensure that there will be no reoccurrence of the incident of the BCCHK?
FINANCIAL SECRETARY: Mr Deputy President, to respond to the first part of Dr LAM's question, it is the Government's policy to review and revise legislation relating to banks regularly to ensure effective supervision of authorized institutions and to protect the interests of depositors. The extent to which more information should be made publicly available in respect of banking operations is one of many issues that will be considered as part of that on-going review; but we shall also be conscious of the need to maintain the stability of the banking system.
With regard to the second part of Dr LAM's question, I should begin by pointing With regard to the second part of Dr LAM's question, I should begin by pointing out that should a bank have unrecorded liabilities, that is to say that there were claims which were not recorded in its books though in accordance with standard accounting practices they ought to have been, it may not be possible to discover these, however transparent the operations of the bank were to become. They could well only be identified when the persons purporting to have such claims on the bank came forward and made their claims. Certainly it would seem that the claims which have recently been lodged with the provisional liquidator of Bank of Credit and Commerce Hong Kong (BCCHK) by liquidators of other parts of the BCC Group worldwide, whether they can be described as "recorded" or "unrecorded" liabilities, are not such as could have been reasonably identified or anticipated by a regulator or auditor. These claims, arising out of the business of BCCHK, have yet to be evaluated, and if necessary, ruled upon by the Court.
As to the third part of Dr LAM's question, it follows from what I have already As to the third part of Dr LAM's question, it follows from what I have already said that it would not be a practicable proposition to conduct a comprehensive investigation into possible unrecorded or potential liabilities in other authorized institutions bearing in mind the large number of authorized institutions and the scale and extent of their business. The best preventive measure is to ensure that only institutions with prudent management are authorized to operate in Hong Kong and that institutions have good and effective internal control systems which can guard against fraud and malpractices including failure to keep proper records of transactions. In this connection, the controls on bank ownership and the authorization policy have been substantially improved since the entry of BCCHK in 1979. A person proposing
to become a controller of an authorized institution incorporated in Hong Kong now has to obtain the prior consent of the Commissioner of Banking. Legislation has also been amended to facilitate the exchange of information between regulators, both local and overseas, and the reporting of fraud to the Commissioner of Banking by auditors. In addition, a Banking Amendment Bill is being drafted to provide the legal framework for external auditors to report on the adequacy and effectiveness of authorized
institutions' internal control system.
Whilst we are not complacent and will continue to keep matters under review, we believe we have a sound and adequately supervised banking system which compares favourably with that in other centres around the world.
DR CONRAD LAM (in Cantonese): Mr Deputy President, will the Administration set up an independent committee to inquire into the various causes leading to the collapse of BCCHK and to see if there is any negligence of duties, and if not, why not?
FINANCIAL SECRETARY: Mr Deputy President, there has already been a comprehensive report by the Commissioner of Banking to the Governor in Council on the events surrounding the closure of BCCHK. And since then the Commissioner for Administrative Complaints has been looking into two cases related to the BCCHK affair, and his findings are likely to be made available to Members, I understand, some time today. In all the circumstances, it is the considered view of the Administration that no useful purpose would be served by an inquiry into the BCCHK affair. The priority must be for the liquidation to proceed with all reasonable speed so that depositors can receive as early a payment as possible.
MR ERIC LI: Mr Deputy President, from the main reply of the Financial Secretary it seems that unrecorded liabilities can be clearly attributed to imprudent management and possibly fraud or malpractices. Will the Government inform this Council whether or not Mr Noel GLEESON, the Official Liquidator, and his special managers are minded to investigate internally as to the conduct of the BCCHK' s former management?
FINANCIAL SECRETARY: Mr Deputy President, I do not think that we can, at this stage, make any judgment about the claims which have emerged; that really has to be dealt
with by the liquidator and, if necessary and appropriate, by the courts.
MR CHEUNG MAN-KWONG (in Cantonese): Mr Deputy President, will the Administration inform this Council whether our present banking supervision is adequate? Apart from introducing the Banking Amendment Bill just mentioned in the reply, are there any other ways by which more protection can be provided to depositors and the public so that confidence in our banks can be enhanced?
FINANCIAL SECRETARY: Mr Deputy President, on the question of monitoring, I believe that we have in place a very comprehensive scheme both for deciding which banks should be authorized to operate in the first place and subsequently to monitor how they perform their functions. Banks are of course subject to the Banking Ordinance and to the Commissioner of Banking and are required to provide regular information on their operations to the Commissioner of Banking. There are also a number of
provisions as regards capital adequacy and the like. But it is also true, it has to be said, that all the monitoring in the world will not always reveal unrecorded transactions; they are difficult to find, even by the auditors of the company concerned.
I think the second part of the question related to what might be done for I think the second part of the question related to what might be done for depositors in such cases. Apart from continuing to keep our banking system and banking legislation under review, I think we have also recently published for public comment a paper on the question of some sort of deposit protection scheme. Clearly there are arguments both for and against such a scheme. In that paper we also floated the idea that there might be another option involving change to legislation which would give some priority to depositors in the event of a winding-up. But in the end, the key factor is to ensure that these organizations -- organizations which become banks -- are proper, respectable organizations.
DR HUANG CHEN-YA: Mr Deputy President, may I ask the Government about the "Blue Arrow" affair in England which suggests that the Bank of England may not have supervised the banks properly in England. Has the Government studied the circumstances of the "Blue Arrow" affair to see whether similar kinds of problems may arise in Hong Kong and give rise to a crisis in the banking industry?
DEPUTY PRESIDENT: Can you answer that, Financial Secretary?
FINANCIAL SECRETARY: As far as I am aware, the "Blue Arrow" affair does not fall within the jurisdiction of the Hong Kong Government.
MISS EMILY LAU (in Cantonese): Mr Deputy President, the Administration has more than once used taxpayers' money to rescue banks that were in trouble, and depositors affected were thus protected. But clearly this time the Administration did not respond in the same way, and this has made the BCCHK depositors very infurious and unhappy with the way the Administration handled the incident. Moreover, it has also aroused public concern. For the sake of giving the BCCHK depositors a fair treatment and allaying the anxieties of the public, will the Administration consider conducting an independent inquiry to see if there was neglect of duties on the part of any officials in handling the case and, more importantly, whether there are ways to prevent such sad event from happening again?
FINANCIAL SECRETARY: Mr Deputy President, I have already answered the second part of the question relating to an inquiry. With regard to the first part that in some previous cases we have used public money to rescue banks, at the time that those decisions were taken it was made very clear in this Council that there would be no question of automatic rescue of banks which got into trouble and that the prime
consideration had to be whether the monetary and banking system was at risk, and that must be the prime consideration. And very clearly, in this case, that was not so.
MR MOSES CHENG: Mr Deputy President, would the Financial Secretary inform this Council whether the failure to record any liability in the books of a bank constitutes an offence or a breach of any existing regulation or legislation regulating the operation of a bank?
FINANCIAL SECRETARY: Mr Deputy President, it is against the law to keep false or incomplete accounting records. Under the Theft Ordinance, persons convicted of false accounting are liable to imprisonment for 10 years. The Companies Ordinance also requires every company to keep proper books of account with respect to, among
other things, all assets and liabilities of the company. Any director of a company who fails to take all reasonable steps to ensure this is done, or has caused the company's failure to comply by his wilful act, is liable to a fine and imprisonment. Banks are also required to file regular returns to the Commissioner of Banking showing their assets and liabilities. Anyone signing such documents who knows, or who
reasonably ought to have known, they contained false information is liable on conviction to two years' imprisonment and a fine of $500,000.
MRS PEGGY LAM (in Cantonese): Mr Deputy President, will the Administration inform this Council whether it will consider paying to the BCCHK depositors on recovering part of their deposits part of the interest on such deposits as a protection of their right? If not, why not?
DEPUTY PRESIDENT: It does not really fall within the scope of the main question but are you minded to try and answer, Financial Secretary?
FINANCIAL SECRETARY: No, Mr Deputy President.
MR LAU CHIN-SHEK (in Cantonese): Mr Deputy President, will the Administration inform this Council up to now how much has been spent by the liquidator of BCCHK since winding-up? How much more will be spent? In view of the plight of the BCCHK depositors, can the cost incurred be borne by the Administration?
DEPUTY PRESIDENT: The same comment, I would think, Financial Secretary? FINANCIAL SECRETARY: I would not wish to answer, Mr Deputy President.
Provision of public services
4. MR FRED LI asked (in Cantonese): Will the Government inform this Council of the 4. MR FRED LI asked (in Cantonese): Will the Government inform this Council of the criteria which have been used in deciding whether a service for the public should
be provided:
(a) directly by the Government; or (a) directly by the Government; or
(b) by a public corporation established through legislation; or (b) by a public corporation established through legislation; or (c) by a private corporation operated under some form of control mechanism; or (c) by a private corporation operated under some form of control mechanism; or (d) by a private (d) by a private by a private corporation without the imposition of any control mechanism? corporation without the imposition of any control mechanism?
FINANCIAL SECRETARY: Mr Deputy President, we are essentially pragmatic in such matters, but in general terms, the Government would prefer services and facilities to be provided by the private sector where it is willing and able to do so, and where the public interest can be adequately safeguarded. Thus for example, most public transport, harbour crossings, broadcasting, power generation and distribution and telecommunications are provided by the private sector. Where these businesses are monopolies or quasi-monopolies, the public interest is usually safeguarded through franchise and/or licensing arrangements of some sort.
Where a public service needs to be provided, and there is merit in giving its Where a public service needs to be provided, and there is merit in giving its management a large degree of autonomy and in ensuring that it operates the service in accordance with prudent commercial principles, we tend to seek to provide it through the mechanism of a statutory corporation. The Mass Transit Railway Corporation, the Kowloon-Canton Railway Corporation and the Hong Kong Export Credit Insurance Corporation are cases in point.
Where a public service is needed, but the private sector is either unable or unwilling to do so (either because of its size or because it is not commercially viable), the Government would consider providing that service. We would, however, ask ourselves whether alternatively the service could be provided efficiently and effectively through the mechanism of voluntary agencies. Hence aided schools and subvented hospitals and welfare agencies form the bulk of our social services. Where the service cannot be provided in that way, the Government would assume the direct responsibility of delivering the service through a government department.
MR FRED LI (in Cantonese): Mr Deputy President, will the Secretary inform this Council
what mechanism is in place to control statutory corporations that provide public services and operate on a commercial basis?
FINANCIAL SECRETARY: Mr Deputy President, in broad terms we use a number of means. We may of course sit on the board of the corporation; there is control through the provisions of the statute which governs the corporation; there are often requirements under the statute to provide, for instance, annual accounts and annual business plans; there are normally regular meetings between the relevant Policy Secretary and the corporation. So there are a range of methods used and I do not think there is one single standard method which applies to all such cases.
MR WONG WAI-YIN (in Cantonese): Mr Deputy President, will the Administration inform this Council whether economies and cost recovery are the important criteria in deciding whether a public service should be provided by a government or non-government organization?
FINANCIAL SECRETARY: Mr Deputy President, certainly those factors would be the ones close to my heart.
MR TIK CHI-YUEN (in Cantonese): Mr Deputy President, I would like to follow up the question raised by Mr Fred LI. There have been criticisms that some statutory corporations are not under adequate control. Does the Administration have any plan to review the control over the operation of these corporations, especially in the context of enhancing public participation and monitoring, so that public interest can be safeguarded?
FINANCIAL SECRETARY: Mr Deputy President, I think we are departing quite a long way from criteria used in deciding whether a service to the public should be provided in various ways, and I have difficulty with the generality of the question. I do not think I can add to that comment.
PROF FELICE LIEH MAK: Mr Deputy President, this question may have an indirect bearing. In safeguarding public interest, can the Secretary inform this Council as to the course of action to be taken by the Government when some business, because of its
size, has evolved into a quasi-monopoly?
FINANCIAL SECRETARY: Mr Deputy President, we, of course, have a number of monopolies or quasi-monopolies in Hong Kong, and we have a number of well-known ways of dealing with them. We have schemes of control, we can have franchise agreements, and we can have regulating Ordinances. If they are providing services to the public, we also very often have some reserve powers on the charges which are made to the public. Again,
in answer to a general question, I am afraid I can only give a general answer.
MR MARTIN BARROW: Mr Deputy President, given his answer that the Government prefers services to be provided by the private sector, could the Financial Secretary explain why there has been so little privatization in recent years, and could he enlighten us as to his strategy in the future?
FINANCIAL SECRETARY: Mr Deputy President, there was a question in this Council on 26 February on privatization in which we did outline our position on privatization. But just perhaps to elaborate on that question a little, we are not ideological in this matter; we have to be very convinced that there is a case for changing the status of a department or a corporation. And in recent years I think it is true to say that although there has been some modest privatization -- and I can think, for example, of abattoirs -- there has been more of an emphasis on corporatization and on
contracting-out.
MR MICHAEL HO (in Cantonese): Mr Deputy President, will the Administration inform this Council what existing services are likely to be hived off from the public sector, and the reasons for doing so?
FINANCIAL SECRETARY: Mr Deputy President, I believe this question has already been fully answered on 26 February.
DR YEUNG SUM (in Cantonese): Mr Deputy President, will the Administration inform this Council of the reasons for establishing such bodies as the Hospital Authority, and
the ways and means the Administration can enhance the accountability of the Hospital Authority to the public?
FINANCIAL SECRETARY: Mr Deputy President, I believe that the main reason was to improve the efficiency of the hospitals, both public -- that is to say, government-run at that time -- and subvented, and thereby to provide a better service to the public.
MR LEE WING-TAT (in Cantonese): Mr Deputy President, referring to the second paragraph of the Secretary's reply, will the Administration inform this Council, if public services which are related to the interests of the community at large are to be privatized, whether the financial burden thus passed on to members of the public will be the prime factor considered by the Government?
FINANCIAL SECRETARY: Mr Deputy President, certainly one of the prime factors to be taken into account is of course the interests of the public, and I think I referred earlier in particular to the question of charging.
MR PETER WONG: Mr Deputy President, the Financial Secretary, in the last paragraph of his reply, referred to subvented hospitals providing the bulk of our social services whereby I take it that he means the medical part of our social services. Would the Financial Secretary advise whether he was referring to the Hospital Authority which comprises the ex-government as well as the ex-subvented hospitals?
FINANCIAL SECRETARY: Mr Deputy President, my understanding is that those hospitals are subvented hospitals whether ex-government or ex-subvented.
Wooden planks used in government construction projects
5. MR MAN SAI-CHEONG asked (in Cantonese): Will the Government inform this Council 5. MR MAN SAI-CHEONG asked (in Cantonese): Will the Government inform this Council of the following:
(a) what proportion of wooden planks and boards used in government construction (a) what proportion of wooden planks and boards used in government construction
projects are imported from countries with tropical rain forests; (b) how t (b) how these wooden planks and boards are disposed of after use; hese wooden planks and boards are disposed of after use;
(c) what measures there are to encourage the re-use or re-cycling of these wo (c) what measures there are to encourage the re-use or re-cycling of these wooden planks and boards, and particularly, whether there is consideration to impose fees and charges on their disposal?
SECRETARY FOR WORKS: Mr Deputy President,
(a) Wooden planks and boards used in government construction projects in the main (a) Wooden planks and boards used in government construction projects in the main are imported from countries in Southeast Asia, and may therefore be said to be about 95% of tropical rain forest origin.
(b) Wooden planks and boards when no longer usable are disposed of either by oden planks and boards when no longer usable are disposed of either by taking to landfills or by burning on site. No figures are available as to the proportion disposed of by either method. However burning is now much less common since air pollution control measures have become more effective.
(c) There are at present no measures to encourage the recycling of wooden planks (c) There are at present no measures to encourage the recycling of wooden planks and boards, however the increasing cost of timber itself does encourage maximum use. The Administration is currently considering charging for construction waste disposal, together with proposals to establish sorting and recycling centres for construction waste including timber.
MR MAN SAI-CHEONG (in Cantonese): Mr Deputy President, it was mentioned in the reply that about 95% of the wooden planks and boards used in government construction projects were of tropical rain forest origin. Would the Government set an example by minimizing or reducing the use of wooden planks and boards of tropical rain forest origin in public housing estates and major works projects in response to the worldwide appeal for rain forest protection? If there are difficulties, what are they?
SECRETARY FOR WORKS: Mr Deputy President, as the question has rightly pointed out, the Housing Authority, where possible, has used industrialization and standard blocks. This is done, certainly, in the building sector. The Architectural Services
Department, wherever there are standard items such as schools, is indeed ensuring that elements of the structure are as standard in terms of common dimensions as possible in order to encourage the use of materials other than timber for construction purposes. This is not quite so easy in the civil engineering services where the type of work requires elements of different nature to carry different forces. However, in major structures the Government has actively encouraged the use of systems which can employ formwork which is reusable rather than simply employing timber.
MR RONALD ARCULLI: Mr Deputy President, will the Secretary please inform this Council whether the use of steel formwork has resulted in a fairly significant reduction in the use of wooden planks and boards, and whether the use of such steel formwork is possible in government construction projects so that it can be introduced as a
condition of government contracts?
SECRETARY FOR WORKS: Mr Deputy President, it is a question of economics. Certainly steel formwork is used in government construction wherever there is significant reuse of the particular element -- the formwork in question. However, there is a fairly substantial amount of work that is of a one-off nature and therefore the use of steel formwork in those circumstances is not entirely appropriate.
DR SAMUEL WONG: Mr Deputy President, could this Council be informed when the proposal for charging for construction waste disposal will be forthcoming? And in view of the shortage of both labour and land here, will the proposed sorting and recycling centres for construction waste be a good proposal?
SECRETARY FOR WORKS: I cannot give an answer on when a charging scheme will be implemented, Mr Deputy President. That is in the hands of the Environmental Protection Department and is a matter which is under consideration. They are now undergoing a pilot consultancy study on recycling which is to begin this month and will last about six weeks. After that a decision will be made on the feasibility of sorting construction waste for reuse.
REV FUNG CHI-WOOD (in Cantonese): Mr Deputy President, could the Administration
inform this Council when it would actually take action to charge for construction waste disposal so as to meet the crisis of landfills being saturated earlier than projected and to reduce the Government subsidies to such commercial activities which are passed on taxpayers?
SECRETARY FOR WORKS: Mr Deputy President, the use of landfill sites for construction waste is under active review and the alternative of providing public dumps which could receive construction waste is an area that is currently being looked at. Together with this, another matter to be looked at would be the control over the public dumps to ensure that illegal tipping does not take place when charging for landfill coupled with a public dumps policy is introduced.
DR CONRAD LAM (in Cantonese): Mr Deputy President, referring to the 95% of the wooden planks and boards of tropical rain forest origin, would the Secretary quantify them in terms of cubic meters and Hong Kong dollars?
SECRETARY FOR WORKS: I cannot, Mr Deputy President, give an answer to the monetary side but I can put it into perspective. Of the 16 000 tonnes of material which goes into landfill, approximately 800 tonnes on a daily basis is timber of some sort. Of this timber, much of it is in fact in the form of skid-boards or boxes which relate more to packing materials rather than construction purposes. So in relative terms, I think the proportion of construction material in timber is quite small. MR PETER WONG: Mr Deputy President, can the Secretary inform us what the pros and cons are of levying a tax on the importation of tropical timber in order to enhance the recycling of such timber in the construction industry?
SECRETARY FOR WORKS: Mr Deputy President, I think that is rather outside of my programme area. I would prefer not to answer.
MR RONALD ARCULLI: Mr Deputy President, will the Secretary inform us whether the change of policy by the Hong Kong Government to one of using construction waste for reclamation purposes has in fact resulted in the demand for landfill areas?
SECRETARY FOR WORKS: It is too early, Mr Deputy President, to say whether there is any significant change. The question of public dumps is one which is actively under review and it is a question of finding those areas.
Financial feasibility studies on PADS projects
6. MR ALBERT CHAN asked (in Cantonese): Will the Government inform this Council: 6. MR ALBERT CHAN asked (in Cantonese): Will the Government inform this Council:
(a) whether consultants have been commissioned to carry out financial (a) whether consultants have been commissioned to carry out financial feasibility studies on the projects related to the Port and Airport Development Strategy;
(b) which of the reports of these financial feasibility sudies can be provided (b) which of the reports of these financial feasibility sudies can be provided to Members of this Council and the general public for information; and
(c) what criteria have been followed by the Government in deciding whether or (c) what criteria have been followed by the Government in deciding whether or not to release the reports on such studies; and whether the Government will consider releasing the reports on these studies after classified information has been removed therefrom?
SECRETARY FOR THE TREASURY: Mr Deputy President, consultants have been engaged to carry out financial feasibility studies on some projects recommended in the Port and Airport Development Strategy and now included in the Airport Core Programme. These projects include the new airport, the Airport Railway, the Lantau Fixed Crossing and the Western Harbour Crossing. They are essentially projects in which we envisage to a degree of private sector participation.
The financial feasibility studies contain commercially sensitive information. In determining whether or not to publish these studies, we have to consider whether the release of commercially sensitive information will prejudice tenders or offers of financing to the Government or the statutory corporations involved. Moreover, in some cases, the basic assumptions used in the earlier studies are out of date. We therefore consider these reports unsuitable for publication and that they may, if released, cause more confusion than enlightenment.
We have also considered whether the reports could be released after removing sensitive information. The fact is that, in all cases, the sensitive information constitute the most important part of the reports. Without them, the reports would be virtually meaningless.
MR ALBERT CHAN (in Cantonese): Mr Deputy President, will the Administration inform this Council, in the absence of information on relevant financial feasibility studies, how it will ensure that Members, in handling applications for funds such as funds for the construction of Chek Lap Kok Airport and the Airport Railway, are provided with adequate information so that a reasonable decision on the applications can be made?
SECRETARY FOR THE TREASURY: Mr Deputy President, I would have thought the answer to that question was self-evident: the Government will take very great care to ensure that the ad hoc group on the Airport Core Programme is fully briefed before funds are sought from Finance Committee and it would then be open to the ad hoc group to ask any questions they may wish to raise.
REV FUNG CHI-WOOD (in Cantonese): Mr Deputy President, it has been the practice in the past that the Administration did not release consultancy reports mainly because these reports contained commercially sensitive information. Does the Administration really intend to consult the views of the public and Members of this Council? If yes, I believe there must have been some way through which the summaries of these reports can be made public. Could I ask the Administration whether it is in no way possible to release the summaries of these consultancy reports so that the public or Members of this Council will be informed?
SECRETARY FOR THE TREASURY: Mr Deputy President, I think the best way of answering the Rev FUNG's question is to try to give an example of commercially sensitive information and to explain, after giving this example, why it cannot be released. If we take, for example, the Financial Feasibility Study on the Airport, a part of the consultants' findings and recommendations relate to the tenant facilities at the new airport -- tenant facilities such as shop spaces, cargo-handling facilities, aircraft engineering facilities -- which will be the subject of future negotiations
between the Airport Authority on the one hand and the future tenants and occupants of these facilities on the other. Now, we would be willing to explain that care has gone into the way in which the consultants have constructed their recommendations but to disclose this information publicly would result in the Airport Authority being placed at a great disadvantage when they do negotiate.
CHIEF SECRETARY: Mr Deputy President, if I may supplement my colleague's answer. We are not in any way unusual in this respect. Even where there are Freedom of Information Acts, which we debated in this Council recently, and I can quote the examples of Australia and Canada, there are provisions in those Acts for commercially sensitive information not to be made available to the public. So we are not in any way unique in this respect.
MR PETER WONG: Mr Deputy President, can some of this information be released to legislators on a confidential basis, otherwise the ad hoc group on the Airport Projects will be reduced to resorting to fishing expeditions in order to try to ascertain what is contained in some of these reports?
SECRETARY FOR THE TREASURY: Mr Deputy President, a rather difficult question. If the Administration can be given an absolute assurance that that confidentiality will be respected, then we would be prepared to provide some of that information, as long as it would not prejudice the negotiating position of the corporations involved and the tendering position of the Government as far as tenders are involved.
MR PETER WONG: Mr Deputy President, speaking for myself, I am surprised at that answer because confidential is confidential.
DEPUTY PRESIDENT: Is there anything that you feel you ought to reply to there at all, Secretary for the Treasury?
SECRETARY FOR THE TREASURY: Mr Deputy President, I believe Mr WONG was making a statement rather than asking a question.
Written answers to questions
Publicity sign boards for district boards and councils
7. MR GILBERT LEUNG asked: Will the Government inform this Council whether there 7. MR GILBERT LEUNG asked: Will the Government inform this Council whether there are any guidelines on applications by members of various councils and district boards to put up publicity sign boards for their offices at public places within their constituencies; what the application procedures are; how long it would take to process such applications; and what criteria the Administration bases on when deciding whether or not an application should be approved?
SECRETARY FOR PLANNING, ENVIRONMENT AND LANDS: Mr Deputy President, at present applications by Members of this Council, the two municipal councils and the district boards to put up publicity sign boards for their offices at public places within their constituencies are considered and processed in the same way as other applications for putting up sign boards in public places. Factors such as obstruction to the public, traffic safety, the commercial content of the sign boards, and so on, are taken into account.
If the sign boards are proposed to be put on government land, an application will have to be made to the relevant District Lands Officer. However, depending on the location, approval by the two municipal councils or the Housing Authority may also be required.
Applications for putting up sign boards normally take some six weeks to process.
The District Lands Officer will only approve of non-commercial advertising involving the display of banners or posters on highway structures for special events, such as trade fairs and festivals. If in doubt, the District Lands Officer will seek comments from other relevant departments. For example, in the case of an application by a social service voluntary agency, the Social Welfare Department will be consulted. Where there may be possible obstructions to traffic or view of traffic, the police and the Transport Department will be consulted.
Overseas education allowances for children of civil servants
8. MR NG MI 8. MR NG MI MR NG MING-YUM asked: Will the Government inform this Council: NG-YUM asked: Will the Government inform this Council:
(a) whether there are plans to review the existing policy on overseas education (a) whether there are plans to review the existing policy on overseas education allowances and school passages for the children of civil servants with a view to encouraging them to pursue their studies locally and assisting the Government in implementing its programme to reduce expenditure;
(b) what amount of public money has been spent on overseas education allowances (b) what amount of public money has been spent on overseas education allowances and school passages for the children of civil servants over the past three years;
(c) what estimated amount of public money will be spent on overseas education (c) what estimated amount of public money will be spent on overseas education allowances and school passages for such children in the next three years; and
(d) how the rates in respect of the various items of expenses covered by the (d) how the rates in respect of the various items of expenses covered by the allowances are worked out?
SECRETARY FOR THE CIVIL SERVICE: Mr Deputy President,
(a) Overseas education allowances and school passages were introduced in the past (a) Overseas education allowances and school passages were introduced in the past to facilitate recruitment from overseas and were later extended to local officers on grounds of parity. There are aspects of the schemes which have become outdated. A review is currently underway to examine whether and, if so, how the two schemes should be changed. The availability and quality of local education are among the considerations in carrying out the review. It will be necessary to consult staff on any proposals to modify the overseas education allowance scheme and school passage scheme before any changes are introduced to the conditions of employment of serving officers.
(b) Expenditure on overs (b) Expenditure on overs Expenditure on overseas education allowances and school passages in the past eas education allowances and school passages in the past three years is as follows:
OEA Passages Passages
$ M $ M $ M $ M
1989-90 112.6 1989-90 112.6 52.3
1990-91 168.5 1990-91 168.5 66.4
1991-92 211.2 1991-92 211.2 103.7
(revised provision)
(c) Forecast expenditure for the next three years is a (c) Forecast expenditure for the next three years is a Forecast expenditure for the next three years is as follows: s follows:
OEA Passages OEA Passages
$ M $ M $ M $ M
1992-93 222.1 1992-93 222.1 84.7
1993-94 235.4 1993-94 235.4 82.5
1994-95 249.6 1994-95 249.6 87.4
The forecast reduction in passage expenditure in the next two years is due to a new ticketing arrangement with return journeys starting in Hong Kong and lower fares under a new passage agreement to be introduced in 1992-93.
(d) The rates of overseas education allowance vary from country to country (d) The rates of overseas education allowance vary from country to country depending on the cost of education in that country. There are different rates for day school and boarding school. Traditionally, we have followed the rates laid down by the United Kingdom Overseas Development Administration (ODA) for its staff working overseas. The ODA rates are revised from time to time based on changes in the level of tuition fees in various countries.
The cost of school passages on the United Kingdom route is based on the contract fare in the air passage agreement between the Government and the two operating airlines. School passages on non-UK routes, which only constitute about 4.5% of the total, are based on the published Economy Class fare or Student fare, where available.
Industrial safety arrangements for the construction of the new airport
9. MR TAM YIU-CHUNG asked: Will the Government inform this Council whether specifi 9. MR TAM YIU-CHUNG asked: Will the Government inform this Council whether specifi MR TAM YIU-CHUNG asked: Will the Government inform this Council whether specific measures will be taken by the relevant departments to co-ordinate the efforts in promoting and ensuring industrial safety during the construction period of the massive infrastructural projects of the new airport?
SECRETARY FOR WORKS: Mr Deputy President, I am keenly aware that the scale and intensity of the Airport Core Projects demands thorough co-ordination of measures to promote and provide a safe working environment for all of the construction workers and site personnel involved.
Requirements on safety is one aspect of the prequalification of tenderers, and Requirements on safety is one aspect of the prequalification of tenderers, and is an important initial step towards creating a positive safety environment. Airport-related and indeed all government contracts include general safety requirements. Work on site also has to comply with the Construction Site Safety Regulations, imposed by the Factories and Industrial Undertakings Ordinance, and which are enforced by the Labour Department.
Additional measures specifically for airport core programme projects will include:
(a) Requirements for a contractor's site safety plan to be approved. The plan (a) Requirements for a contractor's site safety plan to be approved. The plan will then be controlled by the contractor's named and qualified site safety officer. The Government's Project Manager and safety audit staff in the site supervision organization will work closely with the site safety officer to ensure that the safety plan is followed, and that the contractor's obligations in regard to safety are being met. These will include promulgation of safety information to all those on site, education on safety matters, and compliance with methods of construction which have been approved with safe working in mind.
(b) The conditions of contract and specifications are being strengthened to give (b) The conditions of contract and specifications are being strengthened to give contractually binding effect to the additional safety requirements.
(c) A site safety manual is being developed which will establish a framework (c) A site safety manual is being developed which will establish a framework common to all airport-related contracts. Procedures for auditing safety actions and for emergency support will be included in the manual.
(d) The usual quarterly reporting (d) The usual quarterly reporting The usual quarterly reporting on contractors, including safety performance, on contractors, including safety performance,
will apply, and contractors' safety records will be regularly reviewed. If there are any major site safety problems, there will be urgent high level management involvement to rectify the situation. Poor site safety performance also adversely affects the eligibility of contractors to tender for further government contracts.
(e) As a positive encouragement a site safety award scheme is being considered. (e) As a positive encouragement a site safety award scheme is being considered. This will require further discussion with contractors involved and other relevant bodies.
Parking spaces for heavy vehicles on Tsing Yi Island
10. MR LEE WING-TAT asked: Will the Government inform this Council: 10. MR LEE WING-TAT asked: Will the Government inform this Council:
(a) what the statistics of night time illegal parking by container lorries and (a) what the statistics of night time illegal parking by container lorries and lorries on Tsing Yi Island for the past 12 months are;
(b) how many container lorry parking spaces and lorry parking spaces respecti (b) how many container lorry parking spaces and lorry parking spaces respectively are available on Tsing Yi Island;
(c) whether the provision of container lorry and lorry parking spaces on Tsing (c) whether the provision of container lorry and lorry parking spaces on Tsing Yi Island is in compliance with stipulated planning guidelines, if not, what the reasons for non-compliance are and what the remedies are;
(d) whether there are planned sites for further developing spaces for container (d) whether there are planned sites for further developing spaces for container lorry and lorry parking on Tsing Yi Island; if yes, where and when will they be provided?
SECRETARY FOR TRANSPORT: Mr Deputy President,
(a) There are no statistics on the numbers of vehicles parking illegally in the (a) There are no statistics on the numbers of vehicles parking illegally in the territory. However, a spot check carried out by the Transport Department in late January this year revealed about 310 container vehicles and 350 lorries illegally parked on Tsing Yi overnight.
(b) There are at present about 1 150 parking spaces for container vehicles and (b) There are at present about 1 150 parking spaces for container vehicles and about 1 800 spaces for lorries on Tsing Yi.
(c) The Hong Kong Planning (c) The Hong Kong Planning The Hong Kong Planning Standards and Guidelines stipulate standards for Standards and Guidelines stipulate standards for
providing lorry parking spaces in new industrial developments and for public housing estates. These standards are being applied in the case of new developments on Tsing Yi. The actual availability of land for parking is monitored. Where there is a shortfall, efforts are made to identify additional sites for use on a temporary or permanent basis.
(d) There are plans to provide extra land to accommodate about 330 container (d) There are plans to provide extra land to accommodate about 330 container vehicles at Sai Tso Wan in the western part of Tsing Yi. This should be available in July this year. There are also plans to make two sites available in northeast Tsing Yi by September this year for about 400 lorries. In the longer term, provision for vehicle parking will be included in the development of Container Terminal No. 9, which will have a 36 hectare back-up area.
KCRC's corporate intent
11. MR LEE WING-TAT asked: In the light of the Kowloon Canton Railway Corporation 11. MR LEE WING-TAT asked: In the light of the Kowloon Canton Railway Corporation (KCRC)'s recent statement regarding its "Policy Objectives" agreed with the Government in 1990 which include, inter alia, a target rate of return of 12% to 15% based on net fixed assets, will the Government inform this Council:
(a) what the nature of this agreement is and whether it has been approved by the (a) what the nature of this agreement is and whether it has been approved by the Executive Council;
(b) of the reasons for not announcing the agreement reached in 1990 until now; (b) of the reasons for not announcing the agreement reached in 1990 until now;
(c) given the public criticisms against using a percentage of net fixed assets (c) given the public criticisms against using a percentage of net fixed assets as the permitted rate of return for public utilities companies, what the reasons for the Government reaching the above agreement with KCRC are and in what ways this agreement will benefit the public; and
(d) whether a similar agreement has been reached with the Mass Transit Railway (d) whether a similar agreement has been reached with the Mass Transit Railway Corporation?
SECRETARY FOR TRANSPORT: Mr Deputy President,
(a) In late 1990, the Government and the Kowloon-Canton Railway Corporation (a) In late 1990, the Government and the Kowloon-Canton Railway Corporation
agreed on a set of broad internal guidelines for adoption as the Corporation's corporate intent. One of the guidelines is that the Corporation should aim to achieve a rate of return of between 12% and 15% on net fixed assets. This rate is a long-term target which is indicative rather than definitive. It is not to be used as the sole indicator to evaluate performance. This rate was set by the Financial Secretary under section 8(2) of the Kowloon-Canton Railway Corporation Ordinance (Cap. 372). Although these internal guidelines did not require the Executive Council's approval, the Council was informed in March 1991.
(b) As the guidelines are intended for internal (b) As the guidelines are intended for internal As the guidelines are intended for internal guidance within the KCRC and guidance within the KCRC and involve commercial confidentiality, they have not been publicized. However, in the Administration's brief to the Legislative Council on 14 December 1989, Members were advised that as part of the Administration's arrangements to strengthen the
Government's monitoring over the KCRC, discussion would be held with the Corporation to determine a rate of return on assets that it was expected to achieve. Subsequently, during a presentation by the KCRC at the OMELCO Transport Panel meeting held on 18 April 1991, specific reference was made to the target rate of return of 12% to 15% on net fixed assets.
(c) As stated in (a) above, the target of 12% to 15% is not a permitted or (c) As stated in (a) above, the target of 12% to 15% is not a permitted or guaranteed return. In 1991, KCRC's rate of return on fixed assets was 8% before property income and 9% after property income. The KCRC expects that excluding property income, the return on its net fixed assets will only be around 6% to 7% per annum in the next five years. The adoption of these guidelines is considered desirable for the KCRC to ensure its operation on prudent commercial principles without government subsidy. Specifically, a rate of return will ensure that the Corporation will build up sufficient reserves over time to finance major development projects without recourse to the taxpayer.
(d) No similar agreement was made with the Mass Transit Railway Corporation w (d) No similar agreement was made with the Mass Transit Railway Corporation which is governed by a separate Ordinance.
Neighbourhood Level Community Development Projects
12. MR FREDERICK FUNG asked: In all 12. MR FREDERICK FUNG asked: In all MR FREDERICK FUNG asked: In allowing social service groups to undertake owing social service groups to undertake
Neighbourhood Level Community Development Projects (NLCDP) in Mark III to VI public housing estates, will the Government inform this Council:
(a) whether priority will be given to reserving and allocating units as (a) whether priority will be given to reserving and allocating units as whether priority will be given to reserving and allocating units as community community development centres for use by the social service groups as office and for organizing activities;
(b) whether consideration will be given to converting units designated for (b) whether consideration will be given to converting units designated for commercial or residential use as community development centres, and if so, what the procedures and criteria for such conversion are;
(c) whether the floor areas allocated for these community development centres (c) whether the floor areas allocated for these community development centres will comply with the standard laid down in the Operational Guidelines for NLCDP;
(d) whether used units will be (d) whether used units will be whether used units will be restored to their original condition on vacant restored to their original condition on vacant possession by previous tenants before they are let to social service groups as community development centres; and
(e) what arrangements will be made to ensure that applications for renting va (e) what arrangements will be made to ensure that applications for renting vacant units as community development centres will be processed within the target date of four months so that the Community Development Projects can commence at an early date?
SECRETARY FOR HOME AFFAIRS: Mr Deputy President, the NLCDPs are carried out by subvented agencies in areas where the provision of social facilities and welfare services is non-existent or inadequate. Such areas have included temporary housing areas, squatter areas, cottage areas, and Mark I to VI public housing estates that are due for imminent redevelopment.
The NLCDP team is generally the main social welfare agency in the priority area, providing a package of welfare services to the target population.
Since May 1989 the Committee on Neighbourhood Level Community Development Projects has approved the extension of NLCDP teams, inter alia, to Mark III to VI public housing estates. A total of 51 teams have been set up, 14 serve these estates. The Social Welfare Department approves applications from agencies to provide services in each case. It is a matter for the agency to apply to the Housing Authority for the allocation of suitable accommodation, if necessary.
The Housing Authority considers applications from a voluntary agency for premises for NLCDP in the context of all other priorities and having regard to the wishes of estate residents. To date, 13 units in Mark III to VI public housing estates that are scheduled for redevelopment have been allocated to NLCDP teams for use as a base for their work in the estate, there is one application still being processed.
Under current policy, if vacant premises fail to attract commercial tenants after repeated attempts to let, consideration may be given to conversion of such premises to community use, provided that such use is unlikely to affect adversely the business environment of nearby shops. Vacant domestic premises in blocks not due for imminent redevelopment are relet to eligible applicants with a housing need. Suitable
premises may be considered for conversion into community development centres if there is no housing demand to be met and no objection from tenants in the block concerned to the proposed conversion.
It is the aim to provide, as far as practicable, premises that meet the operational guidelines laid down by the Hong Kong Council of Social Service. For community development centres, premises between 50 sq m to 140 sq m are considered appropriate for allocation. Based on operational experience, it has been possible to make available premises within this range for use by these centres.
It is the Housing Authority's established policy to render premises to a tenantable condition before reletting. The voluntary agencies nominated for operating community development project centres are expected to meet the cost of special conversion since they may apply for a grant from the Social Welfare Department for this purpose.
Provided that suitable premises are available and that all supporting documents are submitted together with the application, it has been possible to complete the processing within four months from the date of submission. Where delays have in the past occurred, these are generally due to the voluntary agencies failing to provide supporting material in time for verification. Whenever this is likely Housing
Department staff try to assist them.
Motion
PUBLIC FINANCE ORDINANCE
THE FINANCIAL SECRETARY moved the following motion:
"That -
1. Authority is hereby given for a sum not exceeding $39,204,635,000 to be charged 1. Authority is hereby given for a sum not exceeding $39,204,635,000 to be charged on the general revenue in advance of an Appropriation Ordinance for expenditure on the services of the Government in respect of the financial year commencing on 1 April 1992.
2. Subject to this resolution, the sum so charged may be expended against the heads 2. Subject to this resolution, the sum so charged may be expended against the heads of expenditure, and expenditure for each such head shall be arranged in accordance with the subheads, shown in the draft Estimates of Expenditure 1992-93 or, where such estimates are changed under the provisions of the Public Finance Ordinance as applied by section 7(2) of that Ordinance, in accordance with such estimates as so changed.
3. Expenditure in respect of any head shall not exceed the aggregate of the amounts 3. Expenditure in respect of any head shall not exceed the aggregate of the amounts specified in respect of each subhead in that head, by reference to percentages, in section 4(a) and (b).
4. Expenditure in respect of 4. Expenditure in respect of Expenditure in respect of each subhead in a head shall not exceed - each subhead in a head shall not exceed - (a) in the case of a Recurrent Account subhead, an amount (a) in the case of a Recurrent Account subhead, an amount in the case of a Recurrent Account subhead, an amount equivalent to - equivalent to -
(i) except where the subhead is listed in the Schedule hereto, 20% of the provision (i) except where the subhead is listed in the Schedule hereto, 20% of the provision shown in respect of it in the draft Estimates;
(ii) where the subhead is listed in the Schedule hereto, that percentage of the (ii) where the subhead is listed in the Schedule hereto, that percentage of the provision shown in respect of it in the draft Estimates which is specified in relation to that subhead in the Schedule; and
(b) in the case of a Capital Account subhead, an amount (b) in the case of a Capital Account subhead, an amount in the case of a Capital Account subhead, an amount equivalent to 100% of equivalent to 100% of the provision shown in respect of it in the draft Estimates, the provision shown in respect of it in the draft Estimates,
or such other amount, not exceeding the provision shown in respect of the subhead in the draft Estimates, as may in any case be approved by the Financial Secretary.
SCHEDULE
Percentage
of provision
shown in draft Head of Expenditure shown in draft Head of Expenditure Head of Expenditure Subhead Subhead Subhead Estimates Estimates
22 Agriculture and 22 Agriculture and Agriculture and 452 Royal Society for the Royal Society for the
Fisheries Department Prevention of Cruelty to Fisheries Department Prevention of Cruelty to
Animals (Hong Kong)............. 25 Animals (Hong Kong)............. 25
456 World Wide Fund for 456 World Wide Fund for
Nature (Hong Kong)............... 25 Nature (Hong Kong)............... 25
Percentage
of provision
shown in draft Head of Expenditure shown in draft Head of Expenditure Head of Expenditure Subhead Subhead Subhead Estimates Estimates
91 Buildings and Lands 91 Buildings and Lands Buildings and Lands 221 Clearance of Crown Clearance of Crown
Department Land -- ex-gratia Department Land -- ex-gratia
allowances.............................. 50 allowances.............................. 50
259 Enforcement of the Buildings Enforcement of the Buildings
Ordinance -- works on
private property..................... 40 private property..................... 40
28 Civil Aviation 28 Civil Aviation Civil Aviation 170 Airport insurance................... Airport insurance................... Airport insurance................... 100 Department
281 Air passenger departure tax 281 Air passenger departure tax
administration fees.................. 30 administration fees.................. 30
43 Civil Engineering 43 Civil Engineering Civil Engineering 255 Storage of explosives............... Storage of explosives............... Storage of explosives............... 30 Department
40 Education Department 40 Education Department Education Department 325 Direct Subsidy Scheme............ Direct Subsidy Scheme............ Direct Subsidy Scheme............ 30
330 Assistance to private 330 Assistance to private
secondary schools and
bought places.......................... 30 bought places.......................... 30
350 Refun 350 Refund of rents and rates d of rents and rates
to kindergartens, private
schools and study rooms.......... 30 schools and study rooms.......... 30
489 Miscellaneous educational 489 Miscellaneous educational
services.................................. 30 services.................................. 30
46 General Expenses of 46 General Expenses of General Expenses of 013 Personal allowances................ Personal allowances................ Personal allowances................ 35 the Civil Service the Civil Service
50 Government Land 50 Government Land Government Land 225 Traffic accident victims Traffic accident victims
Transport Agency assistance scheme -- levies....... Transport Agency assistance scheme -- levies....... assistance scheme -- levies....... 100
53 Government 53 Government Government 285 Promotional activities on Promotional activities on
Secretariat: City building management.............. Secretariat: City building management.............. building management.............. 23 and New Territories
Administration
Percentage Percentage
of provision
shown in draft Head of Expenditure shown in draft Head of Expenditure Head of Expenditure Subhead Subhead Subhead Estimates Estimates
60 Highways Department 60 Highways Department Highways Department 260 Installation of street Installation of street
lighting -- residual payments... 40 lighting -- residual payments... 40
273 Highways maintenance............. 273 Highways maintenance............. Highways maintenance............. 30
61 Hospital Services 61 Hospital Services Hospital Services 001 Salaries.. Salaries.. Salaries.................................. ................................ ................................ 26 Department
62 Housing Department 62 Housing Department Housing Department 228 Clearance............................... Clearance............................... Clearance............................... 25 232 Squatter control...................... 232 Squatter control...................... Squatter control...................... 25
268 Clearance of the Kowloon 268 Clearance of the Kowloon
Walled City............................ 25 Walled City............................ 25
73 Indust 73 Industry Department ry Department ry Department 513 Hong Kong Quality Hong Kong Quality
Assurance Agency................... 25 Assurance Agency................... 25
76 Inland Revenue 76 Inland Revenue Inland Revenue 002 Allowances............................. Allowances............................. Allowances............................. 25 Department
149 General departmental 149 General departmental
expenses................................. 25 expenses................................. 25
189 Interest on tax re 189 Interest on tax re Interest on tax reserve
certificates............................. 35 certificates............................. 35
209 Special legal expenses.............. 209 Special legal expenses.............. Special legal expenses.............. 25
34 Internal Security: 34 Internal Security: Internal Security: 195 Defence Costs Agreement: Defence Costs Agreement:
Miscellaneous cash contribution.................... Miscellaneous cash contribution.................... cash contribution.................... 25 Measures
92 Legal Department 92 Legal Department Legal Department 234 Court costs Court costs Court costs............................. ............................. ............................. 32
243 Hire of legal services and 243 Hire of legal services and
related professional fees.......... 25 related professional fees.......... 25
120 Pensions 120 Pensions Pensions 015 Civil, judicial service and Civil, judicial service and
police pension benefits
and compensation.................... 30 and compensation.................... 30
016 Gratuities for officers 016 Gratuities for officers Gratuities for officers on
contract................................. 30 contract................................. 30
Percentage
of provision
shown in draft Head of Expenditure shown in draft Head of Expenditure Head of Expenditure Subhead Subhead Subhead Estimates Estimates
017 Widows' and children's 017 Widows' and children's
pensions, widows' and orphans'
pensions and increases............. 30 pensions and increases............. 30
026 Emplo 026 Employees' compensation........ yees' compensation........ yees' compensation........ 50
118 Planning Department 118 Planning Department Planning Department 149 General departmental General departmental
expenses................................. 30 expenses................................. 30
126 Post Office 126 Post Office Post Office 002 Allowances............................. Allowances............................. Allowances............................. 25 130 Printing Department 130 Printing Department Printing Department 002 Allowances......................... Allowances......................... Allowances............................. 25
170 Social Welfare 170 Social Welfare Social Welfare 177 Emergency relief.................... Emergency relief.................... Emergency relief.................... 100 Department
179 Public assistance scheme.......... 179 Public assistance scheme.......... Public assistance scheme.......... 25
180 Special needs allowances.......... 180 Special needs allowances.......... Special needs allowances.......... 25
410 Rehabilitation services 410 Rehabilitation services
(grants).................................. 25 (grants).................................. 25
411 Social welfare services 411 Social welfare services
(grants).................................. 25 (grants).................................. 25
412 Refunds of rates...................... 412 Refunds of rates...................... Refunds of rates...................... 25
176 Subventions: 176 Subventions: Subventions: 416 Commonwealth Parliamentary Commonwealth Parliamentary
Miscellaneous Association (Hong Kong Miscellaneous Association (Hong Kong
Branch)................................. Branch)................................. 59
437 Hong Kong -- Japan Business 437 Hong Kong -- Japan Business
Co-operation Committee.......... 25 Co-operation Committee.......... 25
446 Law Society Legal Advice and 446 Law Society Legal Advice and
Duty Lawyer Schemes............. 25 Duty Lawyer Schemes............. 25
475 Outward Bound Trust of 475 Outward Bound Trust of
Hong Kong............................. 25 Hong Kong............................. 25
487 Subventions for per 487 Subventions for per Subventions for performing forming
arts activities.......................... 30 arts activities.......................... 30
Percentage
of provision
shown in draft Head of Expenditure shown in draft Head of Expenditure Head of Expenditure Subhead Subhead Subhead Estimates Estimates
502 Hong Kong Archaeological 502 Hong Kong Archaeological
Society................................... 100 Society................................... 100
503 Subventions to voluntar 503 Subventions to voluntar Subventions to voluntary
agency camps......................... 25 agency camps......................... 25
504 Hong Kong Council on 504 Hong Kong Council on
Smoking and Health................ 25 Smoking and Health................ 25
177 Subventions: 177 Subventions: Subventions: 429 Consumer Council.................. Consumer Council.................. Consumer Council.................. 79 Non-Departmental
Public Bodies 441 Public Bodies 441 Hong Kong Productivity Hong Kong Productivity
Council.................................. Council.................................. ....................... 25
443 Hong Kong Tourist 443 Hong Kong Tourist
Association............................. 25 Association............................. 25
444 Hong Kong Trade 444 Hong Kong Trade
Development Council.............. 25 Development Council.............. 25
520 Vocational Training Council.... 520 Vocational Training Council.... Vocational Training Council.... 25
178 Technical Education 178 Technical Education Technical Education 001 Salaries............... Salaries............... Salaries.................................. ................... ................... 65 and Industrial
Training Department
188 Treasury 188 Treasury Treasury 002 Allowances............................. Allowances............................. Allowances............................. 30 163 Write-offs.............................. 163 Write-offs.............................. Write-offs.............................. 50
187 Agents' commission and 187 Agents' commission and
expenses................................. 75 expenses................................. 75
190 Other miscellaneous items....... 190 Other miscellaneous items....... Other miscellaneous items....... 100
191 Payment to Cross-Harbour 191 Payment to Cross-Harbour
Tunnel Company Limited........ 100 Tunnel Company Limited........ 100
192 Refunds of revenue................. 192 Refunds of revenue................. Refunds of revenue................. 100
190 Universities and 190 Universities and Universities and 002 Allowances............................. Allowances............................. Allowances............................. 25 Polytechnics
Percentage
of provision
shown in draft Head of Expenditure shown in draft Head of Expenditure Head of Expenditure Subhead Subhead Subhead Estimates Estimates
149 General departmental 149 General departmental
expenses................................. 40 expenses................................. 40
169 Visitation............................... 169 Visitation............................... Visitation............................... 35
492 Grants to universities, 492 Grants to universities,
polytechnics, Baptist
College and Lingnan
College.................................. 25 College.................................. 25
496 Refund of rates -- 496 Refund of rates --
universities, polytechnics,
Baptist College and
Lingnan College.................. 25 Lingnan College.................. 25
194 Water Supplies 194 Water Supplies Water Supplies 223 Purchase of water................... Purchase of water................... Purchase of water................... 25 Department
Explanatory Note
This resolution authorizes the expenditure of a sum not exceeding $39,204,635,000 on the services of the Government prior to the enactment of an Appropriation Ordinance for the 1992-93 financial year.
FINANCIAL SECRETARY: Mr Deputy President, I move the motion standing in my name in the Order Paper.
The purpose of this motion is to seek funds on account to enable the Government to carry on existing services between the start of the financial year on 1 April 1992 and the enactment of the Appropriation Bill.
The funds on account sought under each subhead have been determined in accordance with paragraph four of the resolution, by reference to percentages of the provision shown in the draft Estimates. As the draft Estimates are changed from time to time, by the Finance Committee or under delegated powers, the provision to which the
percentages are applied will also change. Thus the provision on account under each head is not constant but may vary, with every increase being matched by an equal decrease. The initial provision on account under each head is shown in a footnote to this speech. The aggregate total under all heads is fixed, however, at
$39,204,635,000 and cannot be exceeded without the approval of this Council.
The resolution also enables the Financial Secretary to vary the funds on account in respect of any subhead, provided that these variations do not cause an excess over the amount of provision entered for that subhead in the draft Estimates or an excess over the amount of funds on account for the head.
A vote on account warrant will be issued to the Director of Accounting Services authorizing him to make payments up to the amount specified in this motion and in accordance with its conditions. The vote on account will be subsumed upon the enactment of the Appropriation Bill, and the general warrant issued after the enactment of the Appropriation Bill will replace the vote on account warrant and will be effective from 1 April 1992.
Mr Deputy President, I beg to move. Mr Deputy President, I beg to move.
FOOTNOTE
Initial Amount amount of Initial Amount amount of
show in the provision show in the provision
Head of Expenditure draft Estimates Head of Expenditure draft Estimates draft Estimates on account on account
$'000 $'000 $'000 $'000
21 His Excellency the Gover 21 His Excellency the Gover His Excellency the Governor's
Establishment ....................................... Establishment ....................................... ....................................... 17,058 3,412
22 Agriculture and Fisheries Department 22 Agriculture and Fisheries Department Agriculture and Fisheries Department ...... 312,528 312,528 312,528 73,237 25 Architectural Services Department 25 Architectural Services Department Architectural Services Department ............ ............ ............ 1,150,828 1,150,828 1,150,828 230,216 230,216 24 Audit Department 24 Audit Department Audit Department ......................... ......................... ................................... .......... .......... 63,977 12,796 23 Auxiliary Medical Services....................... 23 Auxiliary Medical Services....................... Auxiliary Medical Services....................... 36,218 7,244 91 Buildings and Lands Department .............. 91 Buildings and Lands Department .............. Buildings and Lands Department .............. 812,047 812,047 812,047 180,752 180,752 26 Census and Statistics Department .............. 26 Census and Statistics Department .............. Census and Statistics Department .............. 215,387 215,387 215,387 43,455 27 Civil Aid Services ........ 27 Civil Aid Services ........ Civil Aid Services ................................... ........................... ........................... 46,121 9,337 28 Civil Aviation Department 28 Civil Aviation Department Civil Aviation Department ....................... ....................... ....................... 349,558 349,558 349,558 80,002 43 Civil Engineering Department 43 Civil Engineering Department Civil Engineering Department ................. ................. ................. 388,442 388,442 388,442 90,990 30 Correctional Services Department 30 Correctional Services Department Correctional Services Department ............ ............ ............ 1,357,146 1,357,146 1,357,146 278,969 278,969 31 Custom 31 Customs and Excise Department s and Excise Department s and Excise Department .............. .............. .............. 696,047 696,047 696,047 144,937 144,937 37 Department of Health 37 Department of Health Department of Health .............................. .............................. .............................. 1,437,120 1,437,120 304,952
39 Drainage Services Department 39 Drainage Services Department Drainage Services Department ................. ................. ................. 462,994 462,994 462,994 100,000 100,000 40 Education Department 40 Education Department Education Department ............................ ............................ ............................ 11,852,489 ,852,489 2,570,168
42 Electrical and Mechanical Services 42 Electrical and Mechanical Services
Department ......................................... Department ......................................... ......................................... 891,651 891,651 198,598
44 Environmental Protection Department 44 Environmental Protection Department Environmental Protection Department ...... 542,366 542,366 542,366 233,438 233,438 45 Fire Services Department 45 Fire Services Department Fire Services Department ........................ ........................ ........................ 1,346,938 308,366
46 General Expenses of the Civil Service 46 General Expenses of the Civil Service General Expenses of the Civil Service ...... 3,204,276 3,204,276 3,204,276 685,110 685,110 48 Government Laboratory 48 Government Laboratory Government Laboratory ......................... ......................... ......................... 94,454 27,466 50 Government Land Transport Agency 50 Government Land Transport Agency Government Land Transport Agency ....... ....... ....... 123,776 123,776 123,776 95,380 51 Government Property Agency 51 Government Property Agency Government Property Agency .............. .............. ................. 1,178,732 1,178,732 1,178,732 236,464 236,464
Initial Amount amount of Initial Amount amount of
show in the provision show in the provision
Head of Expenditure draft Estimates Head of Expenditure draft Estimates draft Estimates on account on account
$'000 $'000 $'000 $'000
52 Government Secretariat 52 Government Secretariat Government Secretariat .......................... .......................... .......................... 665,458 665,458 665,458 148,358 148,358 53 Government Secretariat: City and Ne 53 Government Secretariat: City and Ne Government Secretariat: City and New
Territories Administration .................... Territories Administration .................... .................... 472,519 472,519 472,519 107,568 107,568 29 Government Secretariat: Civil Service 29 Government Secretariat: Civil Service
Training Centre ................................... Training Centre ................................... ................................... 50,747 10,426
96 Government Secretariat: Overseas 96 Government Secretariat: Overseas
Offices ........................ Offices ........................ ................................................ ........................ 164,010 37,880 164,010 37,880
56 Government Secretariat: Planning, 56 Government Secretariat: Planning,
Environment and Lands Branch and
Works Branch ..................................... Works Branch ..................................... ..................................... 146,856 146,856 37,356
55 Government Secretariat: Recreation 55 Government Secretariat: Recreation
and Culture Branch ........ and Culture Branch ........ .............................. ...................... ...................... 97,559 41,671 58 Government Supplies Department 58 Government Supplies Department Government Supplies Department ............. ............. ............. 101,590 101,590 101,590 20,905 60 Highways Department 60 Highways Department Highways Department ............................. ............................. ............................. 952,063 952,063 952,063 251,893 251,893 61 Hospital Services Department 61 Hospital Services Department Hospital Services Department .................. .................. .................. 109,330 109,330 109,330 28,340 62 Housing Dep 62 Housing Dep Housing Department artment artment ............................... ............................... ............................... 366,730 366,730 366,730 94,533 70 Immigration Department 70 Immigration Department Immigration Department ......................... ......................... ......................... 1,026,355 1,026,355 1,026,355 207,904 207,904 72 Independent Commission 72 Independent Commission
Against Corruption .............................. Against Corruption .............................. .............................. 337,895 337,895 337,895 67,889 73 Industry Department 73 Industry Department Industry Department ....... ....... ............................... ........................ ........................ 105,267 105,267 105,267 51,286 74 Information Services Department 74 Information Services Department Information Services Department ............. ............. ............. 140,906 140,906 140,906 28,438 47 Information Technology Services 47 Information Technology Services
Department ......................................... Department ......................................... ......................................... 200,680 200,680 42,705
76 Inland Revenue Department 76 Inland Revenue Department Inland Revenue Department ........... ........... ..................... .......... .......... 597,471 597,471 597,471 124,672 124,672 78 Intellectual Property Department 78 Intellectual Property Department Intellectual Property Department ............. ............. ............. 27,043 5,409 34 Internal Security: Miscellaneous 34 Internal Security: Miscellaneous
Measures ............................................. Measures ............................................. 1,793,448 456,665 1,793,448 456,665
80 Judiciary 80 Judiciary Judiciary ................................... ................................... ............................................... ............ ............ 392,715 392,715 81,930
90 Labour Department 90 Labour Department Labour Department ................................ ................................ ................................ 252,873 252,873 252,873 50,897 94 Legal Aid Department 94 Legal Aid Department Legal Aid Department ............................ ............................ ............................ 235,853 235,853 235,853 47,171 92 Legal Department 92 Legal Department Legal Department ................................... ................................... ................................... 428,438 428,438 428,438 96,514
100 Marine De 100 Marine De Marine Department partment partment ................................ ................................ ................................ 479,312 479,312 479,312 122,088 122,088 106 Miscellaneous Services 106 Miscellaneous Services Miscellaneous Services ............................ ............................ ............................ 8,091,893 8,091,893 2,514,558
112 Office of Members of the Executive 112 Office of Members of the Executive
and Legislative Councils ....................... and Legislative Councils ....................... ....................... 45,340 11,901 114 Office 114 Office of the Commissioner for of the Commissioner for
Administrative Complaints .................... Administrative Complaints .................... .................... 7,496 1,500 120 Pensions 120 Pensions Pensions ................................................ ................................................ 3,492,734 1,046,777 3,492,734 1,046,777
118 Planning Department 118 Planning Department Planning Department .............................. .............................. .............................. 176,428 176,428 176,428 56,304 121 Police C 121 Police C Police Complaints Committee omplaints Committee omplaints Committee .................. .................. .................. 6,489 1,298 122 Police: Royal Hong Kong Police Force 122 Police: Royal Hong Kong Police Force Police: Royal Hong Kong Police Force ..... 6,640,904 6,640,904 6,640,904 1,576,572 1,576,572
Initial Amount amount of Initial Amount amount of
show in the provision show in the provision
Head of Expenditure draft Estimates Head of Expenditure draft Estimates draft Estimates on account on account
$'000 $'000 $'000 $'000
126 Post O 126 Post Office ............................................ ............................................ 1,669,396 347,438 1,669,396 347,438
130 Printing Department 130 Printing Department Printing Department ............................... ............................... ............................... 148,132 148,132 148,132 33,552 136 Public Service Commission 136 Public Service Commission Public Service Commission ..................... ..................... ..................... 9,035 1,807 160 Radio Television Hong Kong 160 Radio Television Hong Kong Radio Television Hong Kong .............. .............. ................... 275,848 275,848 275,848 66,184 162 Rating and Valuation Department 162 Rating and Valuation Department Rating and Valuation Department ............. ............. ............. 134,397 134,397 134,397 26,880 164 Registrar General's Department 164 Registrar General's Department Registrar General's Department ............... ............... ............... 233,144 233,144 233,144 46,888 165 Registry of Trade Unions 165 Registry of Trade Unions Registry of Trade Unions ........................ ........................ ........................ 6,062 1,213 166 Royal Hong Kong Auxiliary 166 Royal Hong Kong Auxiliary
Air Force ............................................ Air Force ............................................ ............................................ 86,138 34,198
167 Royal Hong Kong Regiment 167 Royal Hong Kong Regiment
(The Volunteers) .................................. (The Volunteers) .................................. .................................. 34,533 7,065
168 Royal Observatory 168 Royal Observatory Royal Observatory ................................. ................................. ................................. 91,366 19,844 170 Social 170 Social Welfare Department Welfare Department Welfare Department ...................... ...................... ...................... 6,144,075 6,144,075 1,500,288
174 Standing Commission on Civil Service 174 Standing Commission on Civil Service
Salaries and Conditions of Service ......... Salaries and Conditions of Service ......... ......... 8,463 1,693
175 Standing Committee on Disciplined Services 175 Standing Committee on Disciplined Services
Salaries and Conditions of Service .. Salaries and Conditions of Service ......... ....... ....... 5,312 1,063 173 Student Financial Assistance Agency 173 Student Financial Assistance Agency Student Financial Assistance Agency ......... ......... ......... 367,482 367,482 367,482 73,697 176 Subventions: Miscellaneous 176 Subventions: Miscellaneous Subventions: Miscellaneous ...................... ...................... ...................... 184,579 184,579 184,579 50,248 177 Subventions: Non-Departmental Public 177 Subventions: Non-Departmental Public
Bodies ............................................ Bodies ............................................ .................................................
12,369,845 2,799,755 12,369,845 2,799,755
178 Technical Education and Industrial 178 Technical Education and Industrial
Training Department ............................ Training Department ............................ ............................ 1,046 677 180 Television and Entertainment Licensing 180 Television and Entertainment Licensing
Authority ............................................ Authority ............................................ ............................................ 22,886 5,531
110 Terr 110 Territory Development Department itory Development Department itory Development Department ......... ......... ......... 141,761 141,761 141,761 28,953 181 Trade Department 181 Trade Department Trade Department .................................. .................................. .................................. 147,276 147,276 147,276 31,040 186 Transport Department 186 Transport Department Transport Department ............................ ............................ ............................ 367,114 367,114 367,114 93,066 188 Treasury 188 Treasury Treasury .......................................... .......................................... ............................................... 243,233 243,233 69,847
190 Universities and Polytechnics 190 Universities and Polytechnics Universities and Polytechnics ................... ................... ................... 5,213,939 5,213,939 1,321,784
194 Water Supplies Department 194 Water Supplies Department Water Supplies Department ..................... ..................... ..................... 2,504,028 2,504,028 2,504,028 565,227 565,227 -------------- -------------- -------------- --------------
84,595,645 20,414,635 84,595,645 20,414,635
184 Transfers to Funds 184 Transfers to Funds Transfers to Funds ................................. ................................. ................................. 18,790,000 18,790,000 18,790,000
-------------- -------------- -------------- --------------
Total .............................. Total .............................. 103,385,645 39,204,635 103,385,645 39,204,635
========= ========= ========= =========
Question on the motion proposed, put and agreed to.
First Reading of Bills
BANKRUPTCY (AMENDMENT) BILL 1992
INLAND REVENUE (AMENDMENT) (NO. 2) BILL 1992
Bills read the First time and ordered to be set down for Second Reading pursuant to Standing Order 41(3).
Second Reading of Bills
BANKRUPTCY (AMENDMENT) BILL 1992
THE SECRETARY FOR MONETARY AFFAIRS moved the Second Reading of: "A Bill to amend the Bankruptcy Ordinance."
He said: Mr Deputy President, I move that the Bankruptcy (Amendment) Bill l992 be read the Second time. The purpose of the Bill is to make provision for the setting up of a separate Official Receiver's Office.
As part of the reorganization programme of the Registrar General's Department, we are proposing that the Official Receiver's Office should be established as a separate legal entity. This should both improve the management structure and, in conjunction with certain proposed changes in working practices, allow for a more efficient and streamlined operation.
The Office, headed by the Official Receiver, will assume full responsibility for The Office, headed by the Official Receiver, will assume full responsibility for insolvency matters under the Bankruptcy Ordinance (Cap. 6) and compulsory winding-up of companies under the Companies Ordinance (Cap. 32) which are at present under the purview of the Registrar General.
The Bankruptcy Ordinance is the principal legislation governing the operations The Bankruptcy Ordinance is the principal legislation governing the operations of the Official Receiver's Office. Sections 75 and 76 provide for the appointment of an Official Receiver by the Governor and define his powers and status.
In order that he can discharge his duties effectively, clause 3 of the Bill e In order that he can discharge his duties effectively, clause 3 of the Bill enables the Official Receiver to delegate his powers to certain specified officers who can act on his behalf and carry out his statutory functions as liquidator and trustee of the estates of insolvent companies and bankrupt persons. Such delegation has hitherto been provided for under the Registrar General (Establishment) Ordinance. The specified officers may also represent the Official Receiver in the Supreme Court in hearings on petitions or civil litigation proceedings, and conduct prosecutions
on insolvency offences in the Magistrates Courts. It is therefore important to stipulate that the incumbents of such posts should hold the appropriate legal qualifications. Clause 4 also authorizes them to take affidavits.
Clause 6 introduces a new Schedule which specifies the officers appointed to Clause 6 introduces a new Schedule which specifies the officers appointed to assist the Official Receiver. The Schedule may be amended by the Governor by order published in the Gazette. Clause 5 contains transitional provisions to ensure continuity and certainty as to the validity of actions taken respectively by officers of Registrar General's Department and the new Official Receiver's Office before and after the date of transfer of functions.
Clauses 7 to 13 contain amendments to other legislation consequent upon the establishment of the new Office and the transfer of the functions of the Official Receiver from the Registrar General.
It is not envisaged that the introduction of these new institutional arrangements, which is provisionally scheduled to take place on 1 June 1992, will require any additional funds.
Mr Deputy President, I move that the debate on this motion be now adjourned.
Question on the adjournment proposed, put and agreed to.
INLAND REVENUE (AMENDMENT) (NO. 2) BILL 1992
THE SECRETARY FOR THE TREASURY moved the Second Reading of: "A Bill to amend the Inland Revenue Ordinance."
He said: Mr Deputy President, I move that the Inland Revenue (Amendment) (No. 2) Bill be read a Second time. The main purpose of the Bill is to exempt from profits tax income derived from goods and passengers uplifted in Hong Kong by ships registered on the Hong Kong shipping register.
Major world ship registration centres, other than Hong Kong, do not charge tax on profits made by owners of ships registered with them. Instead, they levy initial registration fees and annual charges. There is now a disincentive for ships to join the Hong Kong register, because here they are subject both to fees and charges and to profits tax. By exempting them from profits tax, the Bill will encourage more
ships to join our register and so provide a large, even if unquantifiable, benefit to the economy generally. The revenue implications are small: the notional cost to revenue of the exemption would be less than $30 million a year. And, of course, we expect most of this to be made up for by fees and charges paid by new ships coming onto the register.
The Bill seeks to make two other changes. The first of these relates to charter hire. Few operators sign charter contracts which produce income taxable under Hong Kong law. Nevertheless, there is some disincentive for ship-owners to sign chartering contracts in Hong Kong, because of their potential liability to profits tax. The Bill seeks to remove this uncertainty by not charging profits tax on the charter hire income attributable to a permanent establishment maintained in Hong Kong of either Hong Kong-registered or overseas registered ships.
Finally, the opportunity is taken in the Bill to clarify the liability of airlines to profits tax on their charter hire income. As a result of this change, airlines will be able to calculate their tax liability from their own records.
It is now over a year since the Government announced its intention to introduce this legislation. Although the principles behind the Bill are straight-forward, protracted consultations have been necessary with the shipping and airline industries on matters of technical detail. These include, in particular, an extensive range of definitions to cover the wide variety of different circumstances that can apply in determining the tax liability of shipping and airline operations. It was partly in anticipation of the drafting difficulties involved that the Government announced that the measures would be effective from 3 December 1990, the date on which the new shipping register was established.
Mr Deputy President, I believe that the time taken has been worthwhile, as we have been able to reach agreement with the industries concerned not only on the principles behind the Bill, but also on important drafting technicalities. The result is, I hope, a comprehensive and polished Bill which will achieve its objectives in a manner acceptable to all the main affected parties.
Mr Deputy President, I move that the debate on this motion be now adjourned. Mr Deputy President, I move that the debate on this motion be now adjourned. Question on the adjournment proposed, put and agreed to.
INLAND REVENUE (AMENDMENT) (NO. 5) BILL 1991
Resumption of debate on Second Reading which was moved on 27 November 1991 Question on Second Reading proposed.
MR RONALD ARCULLI: Mr Deputy President, the Inland Revenue (Amendment) (No. 5) Bill 1991 is an effort to plug a number of identified tax loopholes. It is designed to curb tax leakages relating principally to (a) depreciation allowances drawn on ships and aircraft acquired through leveraged leasing the end user of which is not a Hong Kong operator, and (b) deductions in expenditures incurred on the purchase of patent rights, trade mark or design where technology upgrade is not involved. For the key measures in the Bill, the intention to effect them through legislative amendments was previously announced by the former Financial Secretary in this Council: measures on leveraged leasing on 14 November 1990 and measures on patent rights on 17 April 1991. To safeguard against loss of revenue when the Bill was being prepared and scrutinized, the Bill proposes that the amendments should be applied with
retrospective effect; namely, with regard to contracts or transactions entered into following the Financial Secretary's public announcements, it should take effect from the dates of such public announcements and not on the date on which the Bill is enacted into our laws.
An ad hoc group was formed to study the Bill. It held a total of four meetings and received written submissions from various interested bodies. The Hong Kong Society of Accountants supports the Bill for effectively closing two existing tax avoidance loopholes. The other submissions, namely, from the Hong Kong Association of Banks, the Hong Kong General Chamber of Commerce, the Hong Kong Equipment Leasing Association and the Federation of Hong Kong Industries make no special comments on the provisions regarding big ticket leasing involving ships and aircraft, or on provisions regarding patent rights, trade mark or design. The major point of concern they raise is about the proposal to deny depreciation allowances to Hong Kong lessors leasing machinery and equipment to Hong Kong based companies manufacturing in the People's Republic of China (PRC), mainly in the Pearl River Delta region, given that the plant or equipment is used wholly or principally outside Hong Kong while the lease is in force. Most of the submissions comment that the proposal would impede such cross-border financing. They are particularly concerned that the Bill has retrospective effect on small ticket leasing as the intention to amend the law on
such small ticket leasing was not clearly spelt out at the time of the Financial Secretary's statement.
In addressing the points raised by the submissions, the Commissioner of Inland In addressing the points raised by the submissions, the Commissioner of Inland Revenue furnished the ad hoc group with statistics to show that equipment leasing in the PRC represents only a small amount of the total expenditure on plant and machinery by Hong Kong business. He also confirmed that lease rentals would only be assessable to Hong Kong tax if such rentals were sourced in Hong Kong. In the recent case of Hang Seng Bank Decision (Privy Council Appeal No. 36 of 1989), there was an obiter dicta supporting the tax principle of using the location of the equipment as the basis for profits tax. The tax case of the Federation of Supreme Court Decision in Commissioner of Taxation vs the British Shoe Machinery, (South Africa), Limited also stressed that "the source of the income derived from the property is where the property is used". In other words, for lessors who are denied depreciation allowances because leased equipment are used across the border, no profits tax will be charged on rentals from this type of financing. This should, to a certain extent, compensate for the loss of initial and subsequent depreciation allowances, and balance off any pressure on increase in cost of financing arising from the loss of these allowances.
The question was also put to the Administration as to whether the proposed The question was also put to the Administration as to whether the proposed amendment which affects small ticket leasing is a departure from what was originally intended since it was not clearly spelt out in the Financial Secretary's statement on 14 November 1990. The Administration clarified that although there was no prior mention of the proposed amendment, it would like to take the opportunity of the present Bill to remove an identified anomaly in the Ordinance. Having been satisfied on the principles of taxation in relation to leased machinery and plant and of taxation based on source of income, the ad hoc group concluded that it is inadvisable to provide for an exception on leased equipment to the PRC/Pearl River Delta Region.
The point made by the submissions concerning retrospective effect of the Bill The point made by the submissions concerning retrospective effect of the Bill is, however, well taken. In response to this point, the Secretary for the Treasury will, at the Committee stage, move an amendment so that the new law will not apply to small ticket leasing with effect from 15 November 1990 but on enactment. The Administration also confirmed to the ad hoc group that the provisions relating to small ticket leasing would not apply retrospectively to arrangements concluded before the Bill's enactment.
Mr Deputy President, in his Budget speech last week, the Financial Secretary said Mr Deputy President, in his Budget speech last week, the Financial Secretary said that "he had very much in mind the need to plug tax loopholes whenever they appear". While we have yet to debate on his various budgetary strategies and proposals for 1992-93, I think the Financial Secretary can count on this Council for support on at least this particular score, namely, his pledge about closing tax loopholes.
With these remarks, Mr Deputy President, I support the Bill subject to the amendments at the Committee stage.
MR PETER WONG: Mr Deputy President, I rise to support the resumption of the Second Reading of the Inland Revenue (Amendment) (No. 5) Bill 1991. The convenor of the ad hoc group, the Honourable Ronald ARCULLI, has already gone over the major aspects of this Bill and I shall not repeat them.
I do wish to raise three points on the so-called "small ticket leasing". I feel I do wish to raise three points on the so-called "small ticket leasing". I feel it will be useful to have the Administration's views clearly on this aspect to assist both the leasing businesses as well as tax practitioners.
The Commissioner of Inland Revenue has stated that if an asset is not used in The Commissioner of Inland Revenue has stated that if an asset is not used in Hong Kong, the lease rentals will not be sourced in Hong Kong, and lease rentals paid to the Hong Kong lessor will not be taxed in Hong Kong nor will depreciation allowances be granted. However, there are assets under lease used wholly or principally outside Hong Kong but also frequently in Hong Kong. Many leased vehicles fall into this category. Doubts have been raised as to whether rentals should be apportioned, and if so on what basis.
It would be helpful if the Administration can confirm that the lease rentals in It would be helpful if the Administration can confirm that the lease rentals in such a case would be regarded as arising outside Hong Kong and hence not chargeable to profits tax, and correspondingly, the entitlement to depreciation allowances does not arise.
In relation to leasing, there have also been doubts cast over the wording in In relation to leasing, there have also been doubts cast over the wording in section 15(1)(d) as to whether the Commissioner would be looking at the actual usage of moveable property in Hong Kong to determine the taxability of rentals or the "right to use". For example, would the "right to use" without actual usage bring it into the tax net? Again, would the Secretary confirm that the revenue would only look to actual usage?
Lastly, what will happen if a lessee makes certain representations to the lessor about the usage of the leased assets and subsequently change the location of those assets without informing the lessor? Strictly speaking, this could bring the rentals outside the scope of Hong Kong profits tax and the lessor should keep constant track of the whereabouts of his assets under lease. However, this is unlikely to be
practical and would be rather wasteful of resources. Would it not be more practical to ascertain the location of the assets at the end of the Basis Period in question instead of throughout the Basis Period?
SECRETARY FOR THE TREASURY: Mr Deputy President, since it was introduced into this Council on 27 November 1991, this somewhat technical but important piece of legislation has benefitted considerably from the advice and suggestions of the ad hoc group led by Mr ARCULLI. Apart from holding three formal meetings with the government team, the group received formal representations from a number of professional organizations, including the Hong Kong Association of Banks, the Hong Kong General Chamber of Commerce, the Federation of Hong Kong Industries and the Hong Kong Equipment Leasing Association. As a result of these various discussions, the way in which the Bill would operate in practice was clarified, and two useful amendments, which I shall be moving later this afternoon, were agreed. I should like to put on record my sincere appreciation of the ad hoc group's efforts.
Mr ARCULLI and Mr Peter WONG have referred to a number of problems addressed by the ad hoc group. I shall confine my remarks to two areas. One important concern which emerged in discussion was the possible implications of the Bill for persons who lease plant and machinery to factories in China under the so-called "small-ticket" leasing arrangements. The Bill will in fact have little impact on such lessors. Lease rentals from plant and machinery operated in China will, under Hong Kong tax law, continue to be regarded generally as having their source outside Hong Kong, and
therefore as not being subject to Hong Kong tax. By the same token they will not, of course, be eligible for the generous depreciation allowances which are available for plant and machinery used to produce profits which are assessable for tax in Hong Kong.
Mr Peter WONG has asked three questions in relation to how this principle would Mr Peter WONG has asked three questions in relation to how this principle would apply in certain specific cases. I do not propose to respond to these points of detail this afternoon, as I understand that the Commissioner of Inland Revenue has received
and responded in writing to the OMELCO clarifying the technical issues involved.
A second area of concern was that of retrospectivity. As previously announced by the Financial Secretary, the first part of the Bill, dealing with tax allowances in respect of the upgrading of technology, will apply to contracts entered into on or after 18 April 1991. The second part of the Bill, dealing with leveraged leasing, will apply to transactions entered into on or after 15 November 1990. The decision to bring the Bill into effect in advance of its enactment was taken in order to protect the large sums of public revenue which would otherwise have been at risk.
The Government nevertheless accepts that this element of retrospectivity was neither announced nor intended in respect of "small ticket" leasing of plant and machinery. One of the amendments which I will shortly be proposing to the Bill will therefore make it clear that the November 1990 effective date for the leveraged
leasing provisions applies to ships and aircraft only.
Mr Deputy President, I commend this Bill to the Council, subject to the amend Mr Deputy President, I commend this Bill to the Council, subject to the amendments which I shall shortly move.
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).
DENTISTS REGISTRATION (AMENDMENT) (NO. 2) BILL 1991
Resumption of debate on Second Reading which was moved on 20 November 1991 Question on Second Reading proposed.
MR MOSES CHENG: Mr Deputy President, the Dentists Registration (Amendment) (No. 2) Bill 1991 seeks to expand the range of disciplinary orders available to the Dental Council by giving it the additional powers of making no order, suspending the application of any order made and deciding whether or not a reprimand is to be published in the Gazette, in place of an existing power of postponing judgment for two years.
A Legislative Council ad hoc group consisting of eight members was formed to study the Bill. The group has held two meetings and has met with the Administration as well as representatives of the Hong Kong Dental Association.
Having regard to the views of the Administration and the Dental Association, the ad hoc group accepted in principle that there should be greater flexibility in the powers of the Dental Council to make disciplinary orders, especially on minor cases. As regards the specific additional powers proposed by the Bill, members were agreeable to the power to suspend the application of any order made but had reservations on the power to make no order. They considered that it would be difficult to explain to members of the public if a dentist convicted of an offence punishable with
imprisonment or found guilty of unprofessional conduct was not disciplined at all by the Dental Council. Some members also made the point that in many cases, it could be difficult to determine whether or not an offence by a professional was related to his profession.
The ad hoc group therefore proposed that the power to make no order by the Dental Council should be replaced by a power to make any order it considered appropriate, provided that no such order was of greater severity than those permitted under the existing legislation. If this proposal was taken on board, the other proposed power to decide whether or not a reprimand should be gazetted would no longer be necessary.
The Administration has been informed of and agreed with this recommendation. Accordingly, I shall be moving an amendment to this effect at the Committee stage.
Mr Deputy President, with these remarks, I support the Bill. Mr Deputy President, with these remarks, I support the Bill.
DR LEONG CHE-HUNG: Mr Deputy President, I rise to support the Dentists Registration (Amendment) (No. 2) Bill 1991 subject to the amendment to be proposed at the Committee stage.
In rising to support the Bill, I am expressing the feelings of the dental In rising to support the Bill, I am expressing the feelings of the dental profession which I represent. At the same time, I am instructed by them to urge the Government to make an overall review of the Dentists Registration Ordinance and make necessary amendments in line with the recommendations and views of the Hong Kong dental profession without delay.
Mr Deputy President, the Dentists Registration Ordinance governs the registration, the examination and the professional discipline of practising dentists through the Dental Council as its executive arm. Since the role of registration, examination and professional discipline concern with standards of dental practice, the Dental Council should be an autonomous body of the dental profession.
There are, Mr Deputy President, basically three areas where the Dentists Registration Ordinance requires imminent amendments. They are: composition of the Dental Council, the status of the examination body, and the Chinese name of the Council.
Composition of the Dental Council
The current Dental Council is composed of 12 members. Section 4(2)(d) of the The current Dental Council is composed of 12 members. Section 4(2)(d) of the current Dentists Registration Ordinance states that the composition of the Dental Council should consist of, amongst other members, "six registered dentists" chosen from a panel of not less than 12 registered dentists nominated by the Hong Kong Dental Association.
These nominees are directly appointed to sit in the Council by the Governor. It is obvious therefore there is no direct linkage between the Dental Council and the Hong Kong Dental Association which represents the profession.
Furthermore as these members are appointed by the Governor and not elected by members of the profession, they do not have to be accountable to the profession.
The status of the examination body
Section 8(2) of the current Dentists Registration Ordinance states that the Section 8(2) of the current Dentists Registration Ordinance states that the Dental Council may require any applicant for registration to pass such examination as it may determine.
This would have to be done through an Examination Board of the Dental Council. But unfortunately, the membership, the power and the duties of this Board is currently not governed by statute, unlike the equivalent Licentiate Committee of the Medical Council where all these are specified by law under section 20(c) of the Medical
Registration Ordinance. Imminent amendments, Mr Deputy President, are therefore needed to bring this in line.
The Chinese name of the Council
The Chinese translation of the Dental Council currently does not appear to reflect all the functions and role of the Council nor does it do justice to the responsibilities of this particular Council. A more appropriate translation such as is therefore also wanting.
Mr Deputy President, these and others are not covered by this amendment Bill, but would need to be looked at with urgency to ensure that the Dentists Registration Ordinance will function smoothly to 1997 and beyond.
With these remarks, Mr Deputy President, I support the Bill subject to the amendments to be raised during the Committee stage.
SECRETARY FOR HEALTH AND WELFARE: Mr Deputy President, I am grateful to the convenor, the Honourable Moses CHENG, and members of the ad hoc group for their scrutiny of this Bill. The proposed amendments will make for greater flexibility and enhance transparency in the Dental Council's administration of internal discipline.
Mr Deputy President, if I may, I would like to respond to the concern expressed by Dr the Honourable C H LEONG on the composition of the Council and also regarding consultation with the Hong Kong Dental Association as distinct from the Dental Council in this exercise. I would like to put the record straight. The fact is that six of the 12 members, that is half of the membership of the Dental Council, are appointed from registered dentists nominated by the Hong Kong Dental Association. This is a statutory requirement under section 4(2)(d) of the Ordinance specifically to ensure a close link between the Dental Council and the Association. The members who are appointed on the Association's nomination have presumably a role, if not a duty, to act as a bridge to keep the Association informed of developments and to reflect the Association's views to the Dental Council. There should theoretically therefore be no question of a lack of consultation with the Dental Association. If there were a communications gap, I would respectfully suggest that this would be a matter for the Association to address and to redress as appropriate, jointly with the Dental Council if needs be.
Mr Deputy President, I am grateful for all the remarks made either within the Mr Deputy President, I am grateful for all the remarks made either within the
context of the Bill or outside its immediate context.
I commend to this Council the Bill as amended.
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 Bills
Council went into Committee.
INLAND REVENUE (AMENDMENT) (NO. 5) BILL 1991
Clauses 1 and 2 were agreed to.
Clauses 3 and 4
SECRETARY FOR THE TREASURY: Mr Chairman, I propose that clauses 3 and 4 be amended as set out in my name in the paper circulated to Members.
The minor amendment proposed to clause 3 is a drafting amendment for clarity. Clause 3 of the Bill seeks to add a new section 22B to the Ordinance, in order to limit the share of loss that a limited partner can set off against other income for the purposes of tax deduction, either to his share of the partnership loss or to the amount of his capital contribution to the partnership, whichever is the less. The proposed amendment clarifies the way in which the amount of a limited partner's
capital contribution should be calculated for the purposes of the new section.
The proposed amendment to clause 4 of the Bill makes it clear that the denial of depreciation allowances to lessors of plant and equipment used wholly or principally outside Hong Kong shall not apply with retrospective effect. As I mentioned earlier, the Government's intention is to apply the new provisions relating to leveraged leasing to transactions entered into on or after 15 November 1990 only in respect of ships and aircraft. The effect of the proposed
amendment is to put this beyond doubt.
Mr Chairman, I beg to move.
Proposed amendments
Clause 3
That clause 3 be amended by deleting the proposed section 22B(2)(a) and substituting -
"(a) the amount which he has contributed to it as capital less the sum of - "(a) the amount which he has contributed to it as capital less the sum of -
(i) the amounts of capital that he has directly or indirectly drawn out or received (i) the amounts of capital that he has directly or indirectly drawn out or received back; and
(ii) anything that he is or may be ent (ii) anything that he is or may be ent anything that he is or may be entitled at any time while the partnership itled at any time while the partnership carries on the trade, profession or business to draw out, receive back or be reimbursed from another person, whether or not the entitlement is enforceable or is pursuant to an unenforceable undertaking or practice; and".
Clause 4(e)
That clause 4(e) be amended by deleting "section 4(a), (b)" and substituting "section 4(b)" in the proposed subsection (6).
Question on the amendments proposed, put and agreed to.
Question on clauses 3 and 4, as amended, proposed, put and agreed to.
DENTISTS REGISTRATION (AMENDMENT) (NO. 2) BILL 1991
Clause 1 was agreed to.
Clause 2
MR MOSES CHENG: Mr Chairman, I move that clause 2 be amended as set out in the paper circulated to Members.
Proposed amendments
Clause 2(a)
That clause 2(a) be amended, in the proposed paragraph (iv), by deleting "make no order" and substituting "make any other order as it thinks fit, but no such order shall be of greater severity than those in paragraphs (i) to (iii)".
Clause 2(c)
That clause 2(c) be amended --
(a) by deleting "subsection (1)(i) or (ii)" and substituting "subsection (a) by deleting "subsection (1)(i) or (ii)" and substituting "subsection (1)(i) to (iii)"; and
(b) by deleting "subsection (1)(iii)" and substituting "subsection (1)(iv)". (b) by deleting "subsection (1)(iii)" and substituting "subsection (1)(iv)". Question on the amendments proposed, put and agreed to.
Question on clause 2, as amended, proposed, put and agreed to. Council then resumed.
Third Reading of Bills
THE ATTORNEY GENERAL reported that the
INLAND REVENUE (AMENDMENT) (NO. 5) BILL 1991 and the
DENTISTS REGISTRATION (AMENDMENT) (NO. 2) BILL 1991
had passed through Committee with amendments. He moved the Third Reading of the
Bills.
Question on the Third Reading of the Bills proposed, put and agreed to.
Bills read the Third time and passed.
Member's motion
LAW AND ORDER
MRS PEGGY LAM moved the following motion:
"In view of the community's strong concern over violent crimes and gang activities, this Council urges the Government to take immediate and appropriate measures, including those to improve the efficiency, equipment and morale of the Police Force, so as to protect the lives and property of the people, maintain law and order and reduce the crime rate in Hong Kong."
MRS PEGGY LAM (in Cantonese): Mr Deputy President, I would like to move the motion standing in my name on the Order Paper. The motion is "In view of the community's strong concern over violent crimes and gang activities, this Council urges the Government to take immediate and appropriate measures, including those to improve the efficiency, equipment and morale of the Police Force, so as to protect the lives and property of the people, maintain law and order and reduce the crime rate in Hong Kong."
Mr Deputy President, the law and order situation in Hong Kong has reached a very critical state. In the past few years, this Council has asked various questions and held debates on this issue. However, violent crimes and gang activities are still on the increase. Only a couple of days ago, a goldsmith shop on Ma Tau Wai Road was held up in which staff of the shop and policemen were shot and injured. Yesterday evening, over 40 shots were fired by armed robbers during a double goldsmith shop robbery in Sham Shui Po. For car thefts, the number of cases also shoots up monthly and the cars of three of our colleagues in this Council were stolen but up to now, only one car has been found. These ruthless violent crimes, in which the police officers are regarded as mere nothing and the people's lives are ignored, are around us every day at an increasing frequency.
To the general public, the rampant violent crimes and gang activities are no To the general public, the rampant violent crimes and gang activities are no
longer abstract statistical figures or "cops and robbers" games but pose an actual intimidating threat to their existing way of life and personal safety. As a matter of fact, the worries and anxieties of the public warrant our concern and attention. According to the latest statistical figures, reported cases of violent crime in the last quarter of 1991 amounted to 4 842, representing an increase of 6% compared with the corresponding period in 1990. Let us look at the figures for the past four years. There were 15 724 cases of violent crime in 1988, 17 721 in 1989, 18 820 in 1990 and 19 558 in 1991. The increase within these four years amounted to 24%. We have to face squarely the serious consequences brought about by such an upward trend.
Mr Deputy President, increasing violent crimes have posed a serious threat to the prosperity and stability of Hong Kong. They have jeopardized our living environment, political stability and international image to a great extent.
There is a western saying that "the most severe penalty for crimes is fear." But the situation in Hong Kong is peculiar. Those who live in fear are the law-abiding citizens instead of the law-breaking criminals. In fact, violent crimes and gang activities have become the routine of the day penetrating every sector of our society. More and more Hong Kong people are resigning to their fate, taking such exploitation, intimidation and oppression as things which they have to experience every day in Hong Kong. Since Hong Kong is densely populated, geographically and psychologically
speaking, there is close proximity between people and between places. In other words, when crimes happen the panic caused and the potential danger to the public should not be under-estimated. A member of the public told me recently, "The scenes which, I thought, only appear on films can now be seen anywhere at any time." It is really unimaginable that the Wild West lawless scene would appear here in Hong Kong today.
Hong Kong is striding into the latter half of the transition period and some people are thinking of changes. If our law and order situation continues to deteriorate, the confidence of the public and investors would be undermined, the Government's power of administration would be weakened and massive turmoil might also occur in our
society.
On the other hand, the international image of Hong Kong has been tarnished as a result of its deteriorating law and order situation. Visiting travellers were repeatedly victimized by violent crimes in Hong Kong. Some of them experienced mass robberies on tourist coaches and were held as hostages by the criminals. Recently, an anti-triad parade by the show-business personalties in Hong Kong was widely covered
in the media, including international magazines like Newsweek, Far Eastern Economic Review and other major news agencies round the world. Such has rendered Hong Kong into a dangerous city in the eyes of the foreigners.
All in all, good law and order situation is the basis for stability and prosp All in all, good law and order situation is the basis for stability and prosperity in Hong Kong. As such, I would like to spend the rest of my speech on the means to improve our law and order situation, by focusing on law enforcement, judicial and legislative aspects, China/Hong Kong co-operation as well as civic education.
Law enforcement
As the law enforcer, the Police Force is the guardian of law and order in Hong Kong. However, whether the police could function effectively to prevent, deter and curb or eradicate crimes would depend on a number of factors. The major factors are:
(I) Management of the Force and police morale (I) Management of the Force and police morale
All along, discussions on police morale have been focused on the pay and conditions of service of the police. Nevertheless, human factors including management of the Police Force are also very important.
It is beyond doubt that the Police Force at present is in critical need of strong and powerful leadership. The Commissioner of Police must have experience and ability in management and administration, as well as considerable expertise in the field. On top of these, he must be able to communicate effectively with his colleagues and subordinates, commanding their respect and obedience. I am not questioning the leadership of the incumbent Commissioner of Police. But it is worrying that the conflicts between the police management and the associations of police officers have been intensified and surfaced recently. It is believed that this has certainly dealt a blow to the police morale and the reputable image of the police. The conflicts, widely covered by the press, came as a shock to various strata of our society. What makes me worry most is that the unruly elements may think the Police Force have exposed their weaknesses and would take the opportunity to cause greater damage to the law and order of Hong Kong.
Therefore, the immediate task for the Government is to thoroughly understand the facts of the case and explain to the public so as to dispel their doubts. In the long term, the Government should conduct an overall review on the management of the
Police Force, strengthen the communications between the police management and the officers and do the best to settle the differences between them.
(II) Police equipment and manpower (II) Police equipment and manpower
During a debate on law and order in this Council in February last year, I poi During a debate on law and order in this Council in February last year, I pointed out clearly that, as the saying goes "what is a workman without his tools", police equipment had to be improved on all fronts, in particular firearms and marine police speedboats, if we were to combat crimes effectively.
Nevertheless, some people, probably including the Secretary for Security, still wonder if this is a prudent approach to the problem. May I stress that I have no intention to promote an endless weaponry race between the Police Force and the criminals, nor to turn the streets or territorial waters in Hong Kong into a battlefield of dashing bullets. On the contrary, I am confident if the armoury of the police is improved so that they are no longer inferior to those of the criminals, violent crimes and cases of criminals employing firearms would likely decrease. It is because except a few desperadoes, most criminals would not dare to commit armed robberies causally if they know they would surely suffer in fighting with the police. Unfortunately, the armoury for the police at present does not enable policemen to hold their own, not to mention their ability to hit back. An ex-policeman commented today at Talkabout, a radio programme on Radio Television Hong Kong, that "The firearms now carried by a policeman cannot even protect the policeman himself, how can he protect members of the public?" This comment warrants the Government's serious consideration. As a matter of fact, advanced and sophisticated weaponry would not only protect the public and boost the morale and confidence of the police, they would also serve as a deterrent to the criminals. In other words, deterrence is more important than weaponry. Under certain circumstances, it is likely that the more sophisticated the equipment is, the less occasions would such equipment be put into use. This logic is the same as that of the Cold War when the United States and the then USSR relied on "nuclear deterrence" to prevent an outbreak of war. In addition, the Gulf war last year ended quickly and casualties among the Allied Forces were kept to the minimum due to the advanced and sophisticated equipment. Although the management of the police said recently that police bullet-proof vests would be improved and six extra bullets would be carried by policemen, I still think such improvements are inadequate. Our Police Force needs hi-tech and advanced equipment to protect the lives and property of the public. Last year, the Government recorded an overall Budget surplus of over $10 billion, and it is justified to spend part of
the surplus to upgrade the police equipment.
Moreover, there should be a review on the restrictions upon policemen in firing shots. What warrants our consideration is whether such restrictions are appropriate for the present situation or whether they are too stringent; otherwise, the most sophisticated police equipment would still serve no purpose.
On the recruitment of policemen, I agree that their starting salaries need to be increased so as to attract more people to join the Police Force. I also agree that policemen performing dangerous duties (including those on the beat) should be awarded special allowances. This would be more justified and cost-effective than an overall salary increase for the whole Force.
In addition, the management could re-deploy its manpower more effectively by, for example, deploying civilian staff to undertake non-operative duties such as taking finger prints, recording statements for reported cases and fostering relationship between the public and the Force, thereby releasing the policemen who are engaged in civilian work for patrol duties. This is similar to deploying traffic wardens to issue penalty tickets to drivers. As the Police Force is facing serious shortage of manpower, policemen should be asked to concentrate on their work of maintaining law and order.
I hope the Government would spare the Force from the tightening budgetary strategy intended for all government departments. Moreover, I do not hope that the proposed deletion of 770 permanent posts of the Police Force (from its existing establishment of 33 881), as suggested in this year's Budget, will become true. Otherwise,
gangsters would treat that as good news and commit more crimes, bringing more serious and disastrous damage to Hong Kong.
I think the Government should conduct a detailed review on whether the staff establishment for each police district is adequate; and fill all vacancies in the Force as soon as possible. In fact, police manpower must be adequate and the overall funds allocated to the Force must be increased. There must be enough police officers to carry out operations against triad, smuggling and violent activities, and to step up patrol duties. Besides, hi-tech and effective equipment should be acquired for the police in order to boost their confidence in discharging their duties.
(III) Police power (III) Police power
Human rights have been more and more recognized in Hong Kong recently. This is an encouraging phenomenon for a civilized society ruled by law. However, in maintaining human rights we should not hastily weaken the police power. Actually, the effective and proper use of police power could help to safeguard our fundamental right, that is, the right to live and work in peace and contentment. Of course, by the proper use of police power I mean the police power is not to be abused.
In this context, the police power to stop and search and to deal with loitering is a quite effective means to prevent crimes. It would not be in the public interest to strip the police of such powers. In fact, such powers are not unique to the Force in Hong Kong. Policemen in many major cities round the world also possess such powers for crime prevention. Moreover, during their training, policemen have fully
comprehended the ways to use such powers prudently and properly. On the contrary, if there are enough justifications to suspect that someone has the intention to commit crime but the police are not given the power to stop and search, the case would be like "letting the tiger return to the mountain" and would surely bring bad
consequences.
In fact, cases of abuse of police power are much infrequent than most people imagine. According to statistics from the Complaint Against Police Office, of the 4 580 cases received by the Office in 1991, only 105 were found substantiated and nearly 3 000 were subsequently withdrawn by the complainants. This reflects that police officers have exercised self-discipline and maintained their code of practice in execution of their duties. On the other hand, it is unfair to the police that those who lodge false accusations against them are seldom prosecuted.
Judicial and legislative aspects
In my opinion, punishment meted out by the court on serious crime offenders is often too lenient. While the maximum penalties stipulated in some Ordinances are quite severe, judges, however, prefer to mete out relatively light sentences instead of long imprisonment terms. Such cases then become precedences for reference by other judges, setting off a "vicious cycle" in which serious crime offenders are leniently punished. This has been a serious blow to the morale of the police officers because they have made much effort to arrest the criminals, but the criminals were not duly punished. All long, I think that armed robbers should be severely punished. Armed robbers who have inflicted injuries on others should be sentenced to life
imprisonment and those who killed should be sentenced to death. Only by such doing could the criminals be deterred and public confidence be restored.
Although judicial independence is one of our most treasured assets, the judges, in meting out sentences, should not disregard the needs of our society, our views on crimes and the wish of the public. If ruthless criminals who killed are not sentenced to death, and over-lenient penalties are meted out repeatedly, Hong Kong would soon turn into the crime haven in Asia.
Besides, statistics show that it takes three to six months for a case to be heard in a magistracy, six to nine months in a district court and nine to 12 months in the High Court. Statistics also show that of the two armed robbery cases causing injuries to policemen last year, two suspects were arrested. One of the suspects died before his case was due for hearing and the other is still waiting for a trial in the High Court.
Due to the time lag for hearing, sometimes suspects are released on bail thus giving them an opportunity to jump bail and abscond, intimidate the witnesses or commit crimes again. Moreover, with the passage of time, prosecution work becomes more difficult and witnesses concerned may have left Hong Kong or forgotten the
details of the incidents.
I therefore urge the Government to conduct thorough investigations to find out whether the situation is due to a shortage of judges or other factors, and to take remedial measures as soon as possible.
On legislation, we have to formulate a set of comprehensive Ordinances catering to the needs of Hong Kong and effective in preventing and combatting crime. These Ordinances should not only deal with the criminals and their ringleaders but also serve to protect the witnesses. The Organized Crime Bill introduced in August last year marks a forward step towards the right direction, though there is still room for improvement in its contents. I sincerely hope that the Bill would be passed by this Council as early as possible. The most important thing is, though, while
necessary amendments should be incorporated to avoid contravention of the Bill of Rights Ordinance, the former should be kept effective and counteracting against crimes. Otherwise, the Bill would become a "toothless tiger" serving no real purposes. As regards the protection of witnesses, I think if the law would stipulate that those who attempt to harass or attack the witnesses would be further punished,
then more members of the public would stand up to bear witness against the criminals. China/Hong Kong co-operation
Every one knows that co-operation from the Chinese authorities plays a crucial Every one knows that co-operation from the Chinese authorities plays a crucial part in dealing with the smuggling of firearms and other smuggling activities between China and Hong Kong. In his recent visit to Guangdong, Lord WILSON, the Governor, has had in-depth discussion with the Governor of Guangdong and the Mayor of Shenzhen. This shows that both China and Hong Kong attach much importance to the matter.
As the Governor said, the resolution of the smuggling problem requires long term efforts and co-operation of both China and Hong Kong. However, I also firmly believe that in order to make a breakthrough within a short period of time, the matter must be upgraded to a higher political level. Smuggling and crimes should be included in the discussions by the Sino-British Joint Liaison Group and even at the regular meetings between the foreign ministers of China and United Kingdom. This is not a fuss at all but reflects the seriousness of these problems according to the actual situation. Moreover, the matter involves Sino-British co-operation, which is beyond Hong Kong's jurisdiction, therefore, to let China and the United Kingdom resolve the problem through higher political level will not undermine the authority and
administrative power of Hong Kong Government.
So far, China has attached much importance to the stability and prosperity of So far, China has attached much importance to the stability and prosperity of Hong Kong and has been prepared to make efforts in this respect. Law and order is obviously related to stability and prosperity. China's failure to provide greater assistance reflects that the issue is not only "very complicated", but also has wide implications. I hope China will face up to the situation and jointly resolve the problems of smuggling, stolen cars and firearms.
Civic education -- every one is responsible for combatting crimes
In the end, the collective intention of the local people has a bearing on the In the end, the collective intention of the local people has a bearing on the law and order situation in Hong Kong. In order to reduce the crime rate, the police should of course do their best to arrest the criminals. But on the other hand, the procedure for reporting crimes should also be simplified to provide greater
protection for the witnesses so as to encourage public co-operation with the police. In fact, while assisting the police in cracking criminal cases, members of the public are protecting their lives and property and, after all, it will be wise to do so.
Coming out to be witness would be more risky than being submissive and there might be a bit of trouble. But we have to bear in mind that everyone might become a victim of this battle against crime and if we fail to discharge our civic responsibilities, it will not be easy to win this battle by solely relying on the Government.
Members of the public are concerned about the law and order situation. In fact, this provides a very good chance for the Government to impart civic education. On one hand, the Government should promote public awareness of a citizen's responsibilities and make members of the public realize that while assisting the police to combat crime, they are the ones who are benefited most. On the other hand, through publicity and education, the police should make the triad crime groups show their colours. The legends about the prowess of the triad members and their sense of brotherhood are a pack of lies which deceive and mislead the public. The triad members should be the ones who are really haunted by fears because eventually they will be punished by law. The mass media should exercise their self-discipline and should not play up violence or embellish crimes.
In addition, I am of the view that the bravery of the police should be commen In addition, I am of the view that the bravery of the police should be commended. Community organizations and district boards should not fail to express their appreciation and thanks. Some police officers said to me that they joined the Force not only because they were interested in the job but also because the work enabled them to protect the public and maintain law and order directly. They also said that they required support from their superiors and the Government as well as understanding and encouragement from the public.
Finally, I hope the Hong Kong people will co-operate with the police officers Finally, I hope the Hong Kong people will co-operate with the police officers more often and assist them to maintain law and order and combat crimes. The Government should immediately adopt all appropriate measures to ensure the safety of the people and their property so that Hong Kong's image as a place with low crime rate can be restored and Hong Kong can be made again a place for people to live and work in peace and contentment.
Mr Deputy President, with these remarks, I move the motion.
Question on the motion proposed.
MR STEPHEN CHEONG: Mr Deputy President, for the past few days we have had a tremendous indication of prosperity: the Government has had a windfall of surpluses, Hongkong Bank has made an 80% increase in profit, the stock market has run wild. Amidst all such good signs, what are the issues that are really concerning the public and this particular community? In my mind, in my view, there are two burning issues that merit the Administration's as well as this Council's consideration.
The first one is the frustration felt by our "sandwich class" over their inab The first one is the frustration felt by our "sandwich class" over their inability to cope with the ever runaway cost of owning their own home. This issue I will not touch upon today; I will tackle it in our Budget debate.
The second issue is the unease generated by a deteriorating situation in law and The second issue is the unease generated by a deteriorating situation in law and order, especially the dramatic increase in the violent crime rate involving firearms. It does not need me, Mr Deputy President, to tell our colleagues, as well as the Administration, that these are the two burning issues. Especially in relation to the second one, I am sure over dinner parties, cocktail circuits, even approaches by citizens walking around the streets, you sense that there is that concern.
Now how do we deal with those concerns? A lot of people point their fingers at Now how do we deal with those concerns? A lot of people point their fingers at the inability of the police force to cope with that problem. That is unfair, because I do not think that the police force have not done their job; they have done their job within the constraints that they have. Are they effective, on the other hand? Statistics certainly do not show that they are effective. Why are they not effective? Part of the motion, as proposed by Mrs LAM, touched upon the equipment. Now there is certainly a case to review the need for more modern equipment to be used by our police force very, very carefully.
The second effectiveness, I must say, is that, as I already cautioned during the debate on the Bill of Rights last year, the police force, in order to carry out their work, must have the effective tools. And if some of the laws which in some people's mind are against the rights but which have been proven to be effective in preventing crime, then we should seriously consider whether or not we should discard such laws automatically. Quite honestly, Mr Deputy President, the Bill of Rights was
introduced into this Council with a lot of noise and a lot of voices to the effect that if police powers were not curtailed, that come 1997, those powers will be abused to the detriment of the citizens in Hong Kong. The assumption underlying that fear is that the future SAR will definitely abuse those powers. I question those
assumptions, and not only do I question those assumptions, or the validity of those
assumptions, I would also put it to Members that we also have to consider what effect the curtailing of police powers will have between now and 1997 on the situation of security and law and order in the territory.
It would be foolish if we were to lose our lives between now and 1997 because of the repeal of certain laws, thereby reducing drastically the effectiveness of our police force. One of the laws I am referring to is the loitering law which in the past has been proven to be extremely effective in the prevention of crime; but there are loud voices and noises being made about the need to remove this particular law immediately.
In so far as effectiveness is concerned I would, Mr Deputy President, also draw the Administration's attention to the fact that the salary levels and the conditions of service of the police force need to be constantly reviewed. According to a simple research that I have done, I believe that even at the Assistant Commissioner level, the conditions of service and salary level are nowhere near the Administrative Officer grade. Now, true or not, I cannot vouch for it, but I am sure the Secretary for Security is going to say something about that. But in any case, what I am trying to bring out in the point that I am making is that there is this particularly important matter that need to be addressed by the Administration.
If we ask our police force to do their best -- and I have the firm belief that they have done their best -- I think their conditions of service and salary levels have got to be reviewed objectively and comparatively with the spheres of responsibility and work done by the Administrative Officer grade.
In so far as police morale is concerned, there have been quite a lot of press reports about the morale being bad. There has been quite a lot of criticism levelled against the top management of the police force. All I can say is that perhaps all these frustrations have arisen from the inability of the police force to convey their message to the Administration that they need better equipment, that in order to be effective they should not be stripped of the powers they need to have, and that they also need conditions of service that are comparable to the Administrative Officer grade.
With these words, I support the motion.