XN000022-1995-02-22 — Page 24

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For example, in the manufacturing sector, imported workers constitute only about 2% of the workforce. However, without these workers who are technicians, supervisors, craftsmen and experienced operatives, manufacturing production would be seriously affected. In severe cases, production lines would have to be shut down. Not only would the productivity and the competitiveness of the local manufacturing sector be hampered but the employment opportunities of local workers would also be affected. This will be more severe for linkage industries such as dyeing and bleaching and the industries they support i.e. textile and clothing. Without the imported workers, these industries will not be able to operate to their full capacities or to plan for expansion.

The hotel sector, as a matter of example, and to a lesser degree, the tourist industry, have long maintained Hong Kong's hospitality industry is suffering from a significant labour shortage. We anticipate that the hotel industry would face real operational problems at the rank and file levels, if the scheme were halted.

In infrastructural development, we are, as members are fully aware, building a new airport which is of paramount importance to our future economy. It is unthinkable to delay the completion of this important project. For the Special Scheme under the ACP, non-availability of any imported labour supply would obviously have a severe impact on the ACP itself. For example:-

in the peak year 1996, which is next year, the ACP will add some 50% to the demand for on-site construction work labour in Hong Kong which can only be met by importing labour.

Again, next year, it is estimated that only 10% of the ACP demand for labour can be met by the local labour force. If we cannot import workers, unacceptable delays to the airport projects will result.

delays in the ACP projects will cause significant increases in cost as a result of inflation affecting expenditure over a longer period of time.

And finally, the PAA have just awarded $12 billion worth of contracts for the Air Passenger Terminal Building. We need to ensure that an adequate supply of labour is available now to support the works programme for these very important contracts.

Apart from the constrains on growth, we estimate that the removal of the existing supply of 25,000 imported workers under the General Scheme (amounting to only around 0.8% of the total workforce) would push up inflation, as measured by the CPI(A), by around 0.2 of a percentage point. Moreover, construction wages are likely to rise rapidly, by around 3 percentage points in this year, 7 percentage points in 1996 if the ACP quota were not adjusted upwards.