TNAG-2217-FCO40-3184-Constitutional-development-in-Hong-Kong-1991 — Page 2

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(h)

to

the amount payable members and for a

allowance,

but

allowance; and

not

the Legislative Council special entertainment the general expenses

the system of allowances for Municipal Council members should continue to be left to the two Councils to decide, but the existing system of honoraria for district board members should not The allowances and honoraria should not be related to the system of payments available to Legislative Council members.

be changed.

Members will be asked to advise whether this recommendation should be approved.

BACKGROUND AND ARGUMENT

Background

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From 1976 to 1985, members of the Legislative Council were provided with a system of allowances to reimburse them for expenses incurred in the discharge of their official functions. This was replaced in 1985 in the light of the introduction of elected members into the Legislative Council by a system comprising a stipend (the objective of which was to provide remuneration to offset living expenses and loss of income So that intending candidates would not be deterred from coming forward) and reimbursement of expenses. The system was reviewed in 1987, and the stipend formally abolished whilst a single system of allowances was introduced for Legislative Council members. This was because it was thought difficult to devise a defensible formula for setting a stipend applicable to all tiers of representative government whilst at the same time maintaining a meaningful relativity. Differential rates might have invited invidious comparisons between the three tiers of government and would also have been costly if the level for the Legislative Council had not been drastically reduced. On the other hand, the provision of a stipend might also have been construed as a further step towards creating "professional politicians", something considered best avoided at that time.

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In practice, however, the allowance is divided into components a payment for holding office; and payment to cover official expenses. The purpose of payment for holding office is to compensate, to some extent, for income forgone as a result of public service. A member is able to claim, without any breakdown of expenses incurred, 50% of his allowance as payment for holding of office (and be taxed accordingly) while