7 The Committee are concerned that since the enactment of the Hotel Accommodation Tax Ordinance in 1966 some 20 years ago, no requirement has been introduced that the Hong Kong Tourist Association should submit a budget to the Government for scrutiny. The Committee are also concerned that the only apparent constraint on the Association's expenditure is that a reserve equating to one and half months' expenditure should be maintained.
6.28 The Committee note that the subvention paid to the Hong Kong Tourist Association over the years 1982-83 to 1985-86 was in excess of the guidelines for the containment of public expenditure. These guidelines require that over a period of years the growth rate in real terms should not exceed the growth rate of the gross domestic product and that, where the budgetary situation so dictates, the growth rate should be less.
6.29 Prior to amendment of the Hong Kong Tourist Association Ordinance, the Committee recommend that administrative arrangements be introduced to ensure that the expenditure of the Hong Kong Tourist Association is held in real terms to the 1982-83 level.
6.30 The Committee wish to have an assurance from the Administration that the Hong Kong Tourist Association is complying with the Government's policy that the salaries and benefits provided by the Association to its staff are not greater than those paid to their equivalent posts in the civil service.
EDUCATION AND MANPOWER BRANCH
6.31 Paragraphs 13-16. The failure of the Government to clearly define its policy for determining the level of school fees and subsidy for senior secondary education. The Director of Education traced back developments in education since the 1960's. The 1978 White Paper had said that fees should be set so as to recover a reasonable share of the cost of providing senior secondary education. But the possibility that 11 years of free education might be recommended had remained until the panel of visitors from overseas and the Education Commission, which was not established until 1984, had completed their work of reviewing education policies across the board. It would have been irresponsible to have revised fees while such major issues remained unresolved. The Secretary for Education and Manpower said that it was his intention to revise fees regularly in future. He would shortly convene a meeting to work out the principles on which future school fees should be based. The Committee were informed that the 1986 fee increase would be phased-in over a period of five years with the aim of restoring the 1978 level of school fees in real terms. The end result would be that the fees would cover between 11% and 15% of the cost of senior secondary education.
6.32 Asked to explain why the recent review of school fees had taken 20 months, the Director said that this had been a massive task covering 24 categories of fees affecting 180,000 students of different age groups. This had taken six months. He had then to consult the Finance Branch, the Education and Manpower Branch, the Board of Education and the Education Commission before putting proposals to the Executive Council in June 1986.
6.33 The Secretary hoped that the review for formulating criteria for determining senior secondary school fee levels and the frequency with which they should be reviewed would be completed in two to three months. He intended to follow the general guidelines established in the 1978 White Paper that a reasonable share of the cost of senior secondary education should be met through fees.
6.34 Conclusions and Recommendations. The Committee are concerned:
that the Government has not had a clearly defined policy for determining the level of school fees and the level of subsidy for senior secondary education;
that the 1978 White Paper's general guidelines for determining the level of senior secondary school fees were not followed. Had this been done, a detailed policy could have been in place by the time the phasing-in of the 1979 fee increases was completed in 1982. This would have made it possible to increase school fees in 1983; and
that in the six-year period from 1980 to 1986 the average annual cost of a place in, for example, Form 6 rose from $7,000 to $13,000 whilst the fee remained at $800 a year.
6.35 The Committee note the Director of Education's contention that a decision was taken not to review the fees whilst major changes in educational policy were still under review. The Committee do not consider that this is a valid reason for inaction. The Committee believe that the 1978 White Paper provided clear guidelines.
6.36 The Committee note that the recent review of secondary school fees took 20 months to complete and that this involved a cumbersome process of consultation with numerous boards and committees. The Committee believe that given the clear guidelines in the 1978 White Paper this process was unnecessarily long-winded.
6.37 The Committee attach importance to the Secretary for Education and Manpower's impending review to formulate criteria for determining senior secondary school fee levels and the frequency with which they should be reviewed. The Committee hope that it will lead to arrangements which will avoid past oversights and ensure that the policy follows the 1978 White Paper's general guidelines on the need for a reasonable share of the cost of senior secondary education to be met from fees. The Committee wish to be informed of the progress in the review.
6.38 The Committee endorse the philosophy of the Financial Secretary that all the major charges and tax rates which are fixed in cash terms should be kept up to date and their yield maintained in real terms. Regular small revisions are the best guarantee of a continuing sound basis for Government's finances. (See paragraph 95 of the 1986-87 budget speech by the Financial Secretary on 26 February 1986.)
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