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The Consumer Council considers the increase from 80% to 90% to be acceptable. It regards an increase of the maximum rate to 100% to be a long-term objective.
The TICF Management Board's decision to increase the maximum rate of ex gratia payment from 80% to 90% was discussed by the LegCo Panel on Trade and Industry on 12 November 1996 and by the LegCo Sub-Committee, with the Hon Chan Kam-lam as the Chairman, set up to examine the Amendment Rules on 11 January 1997. An overwhelming majority of Members present at the meetings of the Panel and the Sub-Committee supported increasing the maximum rate from 80% to 90% but not 100%.
Mr President, Members may wish to note that apart from the increase of the maximum rate of ex gratia payment to 90% as a measure to enhance consumer protection in case of defaults of travel agents, the Administration has already implemented a series of other measures, both preventive and remedial, to strengthen the existing regulatory mechanism of licensed travel agents upon advice of the Advisory Committee on Travel Agents. We briefed the LegCo Panel on Trade and Industry on those measures on 12 November 1996. We believe that such measures, including increasing the maximum rate of ex gratia payment to 90%, best safeguard the interests of both the consumers as well as the outbound travel industry.
I urge Members to support the Travel Industry Compensation Fund (Amount of Ex Gratia Payments and Financial Penalty) (Amendment) (No. 2) Rules 1996 made by the TICF Management Board, and vote against the motion.
As a separate issue, Mr President, I note that some Members have suggested that, given the size of the Travel Industry Compensation Fund, which currently stands at about $226 million, consideration should be given to reducing the existing rate of levy, which is 0.5% of the outbound fare paid. The Administration would like to thank Members for this suggestion. I can guarantee that we will review the levy rate and seek advice from the TICF Management Board, the Advisory Committee on Travel Agents and the Travel Industry Council, and will report the result of the consultation and our views to the LegCo Panel on Trade and Industry in April.
Thank you, Mr President.
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