OFFICIAL RECORD OF PROCEEDINGS

To help ensure adequate protective measures are put in place, the Civil Engineering and other concerned government departments regularly assess the seismic risk of Hong Kong, sometimes with the assistance of seismologists from the United Kingdom and China. During the past few years, a number of studies have been carried out on issues such as:

1. data of earthquakes occurring in the nearby regions;
2. the tectonic setting of Hong Kong; and
3. the effects of seismic loading on slopes, retaining walls, reclamations and buildings.

In addition, the Government is upgrading the local seismic monitoring network;

1. The structural design of each type of building/structure has to be considered on a case-by-case basis. The relevant authority will require the inclusion of seismic risk in the structural design of a building/structure as the case may be; and
2. The relevant Building Regulations and Codes of Practice are regularly reviewed, taking into account the latest data of the seismic risk of Hong Kong. For example, in the current review of the Code of Practice for Structural Use of Concrete, seismic effect is one of the subjects being considered by a committee including representatives from the relevant professional and academic bodies.

Structural designs of government and Housing Authority buildings follow closely the requirements of the Building (Construction) Regulations and the relevant Codes.

As regards highways, railways and facilities with special post-disaster functions, such as the new Chek Lap Kok Airport Terminal Building, seismic risk is normally included in the design as an additional factor which may affect their structural stability, that is, they should be able to withstand earthquakes of a scale comparable to the seismic risk of Hong Kong.

Curriculum Development Institute

10. MR ANTHONY CHEUNG asked (in Chinese): In his reply to the question raised in this Council last year on the open recruitment of staff in the Curriculum Development Institute (CDI), the Secretary for Education and Manpower stated that it was the objective of the Government to increase the proportion of posts filled by open recruitment to 60% by 1998-99. In this connection, will the Government inform this Council of:

1. the progress of recruitment so far, and a breakdown of the number of recruits by their professions; and
2. the recruitment target set for the coming year?

SECRETARY FOR EDUCATION AND MANPOWER: Mr President,

1. The number of non-civil service posts in the Curriculum Development Institute (CDI) has been increased to 50. Of these 50 posts, 41 have been filled as follows:

   1 Assistant Director (Curriculum Development Institute);

   25 as subject specialists;

   9 for curricula development;

   2 for research; and

   4 for education television and technology.

   Recruitment for the nine vacancies was conducted in October 1995. Suitable candidates have been selected and appointments are expected to be made shortly.

2. Up to eight more non-civil service staff are expected to be recruited by the CDI in 1996-97.

Mass Transit Railway Power Failure

11. MR WONG WAI-YIN asked (in Chinese): In regard to the recent incident of power failure of the Mass Transit Railway which occurred during the morning rush hours and which resulted in disruption of train services for several hours, will the Government inform this Council whether it is aware of the following:

1. what were the causes of the incident;
2. how the Mass Transit Railway Corporation (MTRC) will prevent similar incidents from occurring in future;
3. what contingency measures does the MTRC have to divert passengers in the event of a serious incident occurring during rush hours;
4. whether the measures mentioned in (c) are effective; if not, whether the MTRC will be asked to review such measures and devise new ones; and
5. whether the MTRC has any plans to purchase buses for emergency and contingency use; if so, when such plan will be put into effect; if not, why not?

SECRETARY FOR TRANSPORT: Mr President, the MTR service disruption between Kowloon Tong and Choi Hung Stations on 22 September 1995 lasted for three hours and 45 minutes. This was caused by the loss of power supply resulting from a fractured insulator supporting the overhead power line. At no time during the incident was passenger safety at risk.

The cause of the fracture is still being investigated. In the meantime, the Mass Transit Railway Corporation (MTRC) has, as a precautionary measure, replaced those insulators in that particular section of the tunnel where the fractured one was located. The Corporation has also inspected all other similar insulators and confirmed that they are in order.

In accordance with contingency procedures for dealing with a major service disruption, the MTRC alerts the Transport Department and other public transport operators immediately of the need to provide alternative transport services. The Corporation also informs members of the public of service suspensions through announcements at MTR stations and through radio and TV stations.

The above procedures were followed on 22 September. For example, in response to this emergency, the Kowloon-Canton Railway Corporation informed passengers that they should avoid changing at the Kowloon Tong Station for journeys to East Kowloon. The Kowloon Motor Bus deployed extra buses on routes linking East Kowloon with Kowloon Tong, Tsim Sha Tsui and Hong Kong Island, and carried over 80 000 additional passengers.

It is impracticable for the MTRC to acquire and maintain a fleet of buses to cater for emergencies as this has substantial costs and operational implications. Overall, co-operation from other transport operators has been readily forthcoming. Nevertheless, the Corporation will draw on the experience of this particular incident to see how such interface can be enhanced and will also consider ways to improve communication with passengers and the public about re-routing alternatives and resumption of service.

Women Employed in Industry

12. MR LEE KAI-MING asked (in Chinese): Will the Government inform this Council of:

1. the total number of women employed in the industrial sector; and
2. the person-times and number of hours of overtime work undertaken by women employed in the industrial sector this year, together with the number of those employees who were required to work beyond 11.00 pm?

SECRETARY FOR EDUCATION AND MANPOWER: Mr President,

1. According to the statistics of the Census and Statistics Department 176 350 women were employed in the manufacturing industry in June 1995, accounting for 44% of the total number of persons employed in the industry.
2. The Women and Young Persons (Industry) Regulations of the Employment Ordinance regulates the employment of women in industrial undertakings in respect of the hours of employment, and overtime employment. According to Regulation 10 of the Regulations, any employer who wishes to employ women in excess of the working hours specified under the Regulations have to notify the Commissioner for Labour in writing before such overtime employment is to begin. During the first nine months of this year, employers from 1 551 industrial undertakings reported overtime employment of women under the above Regulations. A total of 39 345 women workers and 117 620 hours of overtime employment was involved. We have no statistics on the person-times of overtime work undertaken by women in the industrial sector. However, Regulation 10(2) of the above Regulations stipulates that no woman may work overtime in an industrial undertaking for more than 200 hours in any year or two hours in any day.

According to Regulation 8 of the above Regulations, the period of employment of any women in any industrial undertaking shall neither begin earlier than 6 am nor end later than 11 pm, except with the written permission of the Commissioner for Labour. In the first nine months of this year, such permission was given to the employment of 1 658 women in the industrial sector to work beyond 11 pm.

Community Rehabilitation Network Scheme

13. MRS ELIZABETH WONG asked: Will the Government inform this Council whether it supports the Community Rehabilitation Network Scheme, which is currently funded by the Jockey Club; if so, when will the Government fund the entire scheme through subvention from General Revenue; if not, why not?

SECRETARY FOR HEALTH AND WELFARE: Mr President, with government support, in April 1994, the Hong Kong Society for Rehabilitation was successful in its bid for a grant from the Royal Hong Kong Jockey Club for the setting up of a Clearing House and two Community Rehabilitation Network centres for two years.

We shall shortly be seeking funding from the Lotteries Fund to cover the operation of the Clearing House and the two existing centres in 1996-97. The Society is also planning an additional centre at Lei Cheng Uk Estate. We shall be bidding for funds in the resource allocation exercise for the 1997-98 financial year with the aim of subventing directly the existing services and that new centre. Thereafter, we shall discuss with the Society the need and timing for any further expansion of the scheme.

UNHCR Debts

14. MR HENRY TANG asked (in Chinese): In view of the huge amount of outstanding debt which the United Nations High Commissioner for Refugees (UNHCR) has yet to repay the Hong Kong Government for looking after and maintaining the Vietnamese migrants (Vms), will the Government inform this Council of the following:

1. what is the total sum presently owed by the UNHCR, when is this sum expected to be repaid in full, and what is the time-table for repayment;
2. how much is the Government required to contribute towards such cost before the repatriation of all Vms, and what are the purposes for which the Government's contributions will be used; and
3. will the Government seek the commitment of the British Government to repay any outstanding debt not fully repaid before July 1997?

SECRETARY FOR SECURITY: Mr President,

1. Under the terms of a Statement of Understanding, entered into with the Hong Kong Government in 1988, the United Nations High Commissioner of Refugees (UNHCR) is responsible for meeting the costs of the care and maintenance of the Vietnamese migrants (VM) in Hong Kong's camps. Since 1989, the UNHCR has only been able to reimburse a proportion of these costs and, as at 30 September 1995, owed the Hong Kong Government about $1 billion.

   As we have done in the past, we shall continue to remind the UNHCR to discharge their debt to us. The UNHCR has re-affirmed their commitment to repay the amount owed on many occasions, most recently in September this year. But the UNHCR has no independent funds and relies on contributions from the international community.

2. The principal costs associated with the VM problem which are borne by the Hong Kong Government relate to the operation of the detention centres, the provision of medical services and the orderly repatriation programme. These costs will amount to about $750 million in the current financial year. The costs in future years will depend on the pace of repatriation.
3. The debt is owed to the Hong Kong Government by the UNHCR. The UNHCR has re-affirmed their commitment to repay the debt. The United Kingdom was not a party to the 1988 Statement of Understanding.

Petrol Filling Stations near Residential Buildings

15. MR JOHN TSE (in Chinese): Will the Government inform this Council of the following:

1. how many petrol filing stations are at present located less than 50 metres away from residential buildings in the territory; and
2. what measures does the Government have to prevent the danger being caused to the residents in the event of an outbreak of fire at one of these petrol filing stations?

SECRETARY FOR SECURITY: Mr President,

1. There are, at present, 90 petrol filing stations (PFSs) located less than 50 metres away from residential buildings in the territory.
2. The Hong Kong Planning Standards and Guidelines (Chapter 11) provides details on planning considerations for PFSs. They should be situated on open ground, or at acceptable areas within commercial or industrial buildings, and shall not in any case be located inside any residential buildings.

In accordance with the Institute of Petroleum Marketing Safety Code, tank openings and dispensers of PFSs should be located with their centre lines not less than 4.25 metres from any fixed source of ignition or from the boundary of the PFS. Where such safety distance cannot be provided, stringent fire protection measures will be required.

Depending on the location and layout of the PFSs, fire protection systems may include the provision of a drencher system, an automatic foam water spray system, mechanical ventilation system, portable fire fighting equipment and warning signs. Complete fire separation of the PFS from other parts of the building will also be required if the PFS is located inside a building. In addition, the design of storage tanks, pipings, pumping/dispensing systems and electrical installations have to comply with standards stipulated by the Director of Fire Services. Licensing conditions govern traffic management at PFSs, product delivery and dispensing procedures, and the actions to be taken in an emergency.

These precautionary measures and controls have proven generally effective. Nonetheless, in the event that a fire occurs at a PFS, there is a pre-determined Fire Services attendance so that well-trained operational crew will quickly attend the scene of the incident.

Deaths in School

16. MR WONG WAI-YIN asked (in Chinese): Will the Government inform this Council:

1. of the number of school children who died suddenly whilst attending classes in schools over the past three years, together with the causes of their death; and
2. what measures does the Government have to prevent the occurrence of such deaths?

SECRETARY FOR EDUCATION AND MANPOWER: Mr President,

1. Over the past three years, there is only one such case. This concerns the death of an eight-year-old girl during a Physical Education lesson on 10 October 1995. The cause of death is still under investigation.
2. Regulation 55 of the Education Regulations requires that every school should have at least one first aid box and at least two teachers trained in administering first aid. In addition, the Education Department has issued to all schools a handbook on "Safety Precautions in Physical Education for Hong Kong Schools". Annual seminars on safety precautions in Physical Education are also conducted for Physical Education teachers and the chairpersons of the subject panel.

After the exact cause of death in the present case is known, we will consider whether further preventive measures should be taken.

School Design Standards

17. MR CHEUNG MAN-KWONG asked (in Chinese): With regard to the latest design standards for secondary and primary school premises, will the Government inform this Council:

1. of the details of the design standards, together with a list showing the numbers and area of various rooms, utility areas and venues; and whether new school premises must be built to these standards;
2. of the number of secondary and primary schools whose designs have yet to meet these standards at present;
3. of the names of the 20 secondary schools and the 20 primary schools whose designs fall short of these standards by the widest margin in terms of total floor area and open playground area per student;
4. whether the Government has any schedules for the improvement, expansion or extension of all schools of sub-standard designs, so as to bring them up to standard as soon as possible; and
5. whether the Government has put in place any interim arrangements and measures to assist those schools which are significantly below standard in improving their crowded environment before the completion of the up-grading project recommended in the Education Commission Report No. 5 for existing secondary and primary schools?

SECRETARY FOR EDUCATION AND MANPOWER: Mr President, the Education Commission recommended in its Report No. 5 that all new schools should be built to an improved standard to provide additional space for teachers and students, and that all existing schools should be brought up to this new standard under a phased improvement programme. The Government accepted this recommendation. In November 1993, it introduced a new schedule of accommodation for building new schools. Details are at Annex A. In 1994, it commenced a School Improvement Programme to improve in stages all existing schools.

1. The improved standard as set out at Annex A applies to all new schools the planning of which commences after November 1993 except where because of non-availability of standard school sites and the need to meet significant shortfall of school places, schools have to be built on smaller sites.
2. As explained in the introductory paragraph, all existing primary (499) and secondary (369) schools in the public sector need to be brought up to the improved standard.
3. We are not able to provide names of those schools the designs of which fall short of the improved standard by the widest margin as we do not have precise information on the total floor area and open playground area per student of every school in Hong Kong. In general, the majority of the schools the designs of which are significantly below the latest standard have been included in the early phases of the School Improvement Programme.
4. We aim to bring all existing public sector schools to the improved standard by 2003 under the School Improvement Programme; the first two phases involving 240 schools are already in progress and expected to be completed by 1997.
5. The majority of those public sector schools which are significantly below the improved standard have already been included in the early phases of the School Improvement Programme. For those schools found not feasible for improvement works because of physical and technical constraints, consideration would be given to upgrading the environment of these schools on a case by case basis through other appropriate measures such as reduction of school size or relocation.

Annex A

Schedule of Accommodation

for 26-Classroom Secondary School

Schedule of Accommodation

for 30-Classroom Primary School

Note * : Additional accommodation recommended by the Education Commission Report No. 5.

# : The number and size of the staff and pupils' toilets are determined by the number of latrine facilities required.

MOTIONS

INTERPRETATION AND GENERAL CLAUSES ORDINANCE

THE CHIEF SECRETARY to move the following motion:

"That the Legal Aid (Assessment of Resources and Contributions) (Amendment) Regulation 1995, published as Legal Notice No. 353 of 1995 and laid on the table of the Legislative Council on 11 October 1995, be amended as shown in the Schedule.

SCHEDULE

1. Contributions

1. Section 1 is renumbered as section 2.
2. Section 2(1) is amended-
   1. by repealing "to the Legal Aid (Assessment of Resources and Contributions) Regulations (Cap. 91 sub. leg.)";
   2. in paragraph (c), by repealing "if his application is for proceedings in which a breach of the Hong Kong Bill of Rights Ordinance (Cap. 383) is an issue and the Director is satisfied that he has a meritorious case" and substituting "if his certificate is for proceedings in which a breach of the Hong Kong Bill of Rights Ordinance (Cap. 383) or an inconsistency with the International Covenant on Civil and Political Rights as applied to Hong Kong is an issue".
3. Section 2(3) is repealed.

2. Section added

The following is added -

"1. Regulation added

The Legal Aid (Assessment of Resources and Contributions) Regulations (Cap. 91 sub. leg.) are amended by adding-

"15. Contributions for employee's compensation and

common law damages

A person who is issued with 2 legal aid certificates, one for employee's compensation and the other for common law damages arising out of the same circumstances, is liable to pay only one amount of contributions for the 2 certificates.".".

She said: Mr President, I move the first motion standing in my name on the Order Paper.

The Legal Aid (Assessment of Resources and Contributions) (Amendment) Regulation 1995 (the Regulation) adjusted the contributions payable by persons granted legal aid under ordinary circumstances and provided for a variation of the resources limits for persons granted legal aid for meritorious Bill of Rights cases to the Director of Legal Aid. The Regulation was gazetted on 28 July. It commenced operation on the same date as part of the subsidiary legislation of the Legal Aid (Amendment) Ordinance 1995, which was passed by this Council on 14 June. The Regulation was laid on the table in the Council on 11 October.

I am grateful to the Legal Service Division of the Legislative Council Secretariat for raising a number of drafting issues concerning the Regulation. The Administration accepts the points made and is now proposing a number of technical amendments.

First, a necessary consequential amendment to the Legal Aid (Assessment of Resources and Contributions) Regulations (the principal Regulations) resulting from the Legal Aid (Amendment) Ordinance 1995 has been inadvertently omitted. The Regulation at present amends Schedule 3 to the principal Regulations to provide for a variation of the resources limits for meritorious Bill of Rights cases. Cases relating to any inconsistency with the International Covenant on Civil and Political Rights have been left out. The new section 2(c) of the Regulation provides that meritorious International Covenant on Civil and Political Rights cases are also included.

Seconldy, Part IV of Schedule 3 has at present no direct reference to a regulation in the text of the Legal Aid (Assessment of Resouces and Contributions) Regulations. The new section 1 of the Regulation repeals Part IV of Schedule 3 and transposes it as the new regulation 15 of the principal Regulations.

Mr President, I beg to move.

Question on the motion proposed, put and agreed to.

CRIMINAL PROCEDURE ORDINANCE

THE CHIEF SECRETARY to move the following motion:

"That the Legal Aid in Criminal Cases (Amendment) (No. 3) Rules 1995, made by the Chief Justice on 14 October 1995, be approved."

She said: Mr President, I move the motion standing in my name on the Order Paper.

The Legal Aid (Amendment) Bill was passed by this Council on 14 June and received the assent of the Governor on 15 June. Under sections 9 and 9A of the Criminal Procedure Ordinance, the Chief Justice made the Legal Aid in Criminal Cases (Amendment) (No. 2) Rules 1995 after the Bill has been passed into law. The Ordinance and its subsidiary legislation, including the Rules, came into effect on 28 July.

Rule 16 of the Legal Aid in Criminal Cases Rules provides that the Director of Legal Aid may require a person granted legal aid to pay a contribution towards the sums payable on his account by the Director. It has now been found that as a result of the earlier amendment, Rule 16 now covers only legal aid applications for proceedings in which a breach of the Hong Kong Bill of Rights Ordinance is an issue and has possibly omitted legal aid applications under ordinary circumstances. The present amendment to Rule 16, as amended in the Legal Aid in Criminal Cases (Amendment) (No. 2) Rules 1995, is required to ensure that the ordinary applications for legal aid in criminal matters are covered, as well as Bill of Rights cases.

In accordance with sections 9 and 9A of the Criminal Procedure Ordinance, the Chief Justice has made the Legal Aid in Criminal Cases (Amendment) (No. 3) Rules 1995 on 14 October. The Rules now require the approval of this Council by resolution.

Mr President, I beg to move.

Question on the motion proposed, put and agreed to.

BILLS

First Reading of Bills

COSTS IN CRIMINAL CASES BILL

EMPLOYMENT (AMENDMENT) (NO. 4) BILL 1995

LANDS TRIBUNAL (AMENDMENT) BILL 1995

Bills read the First time and ordered to be set down for Second Reading pursuant to Standing Order 41(3).

Second Reading of Bills

COSTS IN CRIMINAL CASES BILL

THE ATTORNEY GENERAL to move the Second Reading of: "A Bill to provide for costs in criminal cases."

He said: Mr President, I move that the Costs in Criminal Cases Bill be read a Second time.

The purpose of this Bill is to reform the existing law and practice governing the award of costs in criminal cases by removing anomalies and inconsistencies and by providing a clear set of principles applicable to all levels of criminal courts.

Defence costs

I will deal, first, with the Bill's proposals concerning defence costs. At present, in the magistrates court, costs may be awarded to a defendant who has been acquitted only if the magistrate is satisfied that the proceedings ought not to have been instituted or pursued. But in the High Court and District Court, a different test applies, in that costs are normally to be awarded to an acquitted defendant unless there are positive reasons for their not being so awarded, namely, that he has brought suspicion on himself and has misled the prosecution into thinking that the case against him is stronger than it is. If the defendant is legally-aided, then any award of costs will be limited to the extent of any contribution he has made towards the costs of his defence.

Thus, Mr President, in the magistrates courts, an acquitted person carries the burden of demonstrating that the prosecution is at fault; in the District Court and High Court, he will normally be awarded costs unless he is at fault or the acquittal turns on a technicality.

It is difficult to justify the different principles applicable in the award of costs in criminal proceedings. The Bill, therefore, provides that the same guiding principles for the award of costs should apply in all the courts, and that the court should be given a complete discretion on the question of costs. That discretion should normally be exercised in favour of the acquitted person unless there should be positive reasons for not so doing. To remove the different principles governing the award of costs to an acquitted defendant in the magistrates court and superior courts, Part II of the Bill provides that courts at all levels have a complete discretion on awarding costs to a successful defendant at trial or otherwise, and on appeal.

Clause 3(2) of the Bill provides that costs in the magistrates court should not exceed $15,000 unless they are to be assessed by an official of the court or have been agreed by the prosecution and the defence. The amount of $15,000 represents a substantial increase from $5,000, which was set as long ago in 1981.

Clause 6 gives courts at all levels a discretion to award costs in favour of a defendant where he is charged with multiple offences but is acquitted of one or more offences.

Clause 9(2)(b) empowers the Court of Appeal to award costs to a defendant where it substitutes on appeal a sentence substantially at variance with that passed by the court below. Although such costs may not have been occasioned through any fault of the prosecution, but rather because the trial judge imposed an inappropriate sentence, the defendant should not be left out of pocket when he has been obliged to appeal against a sentence which is held to be flawed.

Prosecution costs

Mr President, I turn now to that part of the Bill dealing with the prosecution costs. Part III of the Bill provides for costs to be ordered in favour of the prosecution in summary proceedings (clause 11), indictable proceedings (clause 12), and where a judge or the Court of Appeal dismisses an unmeritorious appeal lodged by a defendant, that is, clause 13.

I should make it clear that it will not automatically be the case that the prosecution will ask for or be awarded its costs where there is a conviction. Generally speaking, the prosecution will not seek costs in relation to any defendant or appellant who has a Legal Aid Certificate. However, in other cases where the prosecution is satisfied that the defendant or appellant is financially capable of paying costs, the prosecution may seek an order for costs. Of course, discretion must be used and if it is considered that there is no prospect of enforcing the order, there is not much point in making any application for costs.

Similar to clause 3(2), clause 11(2) increases the costs limit in the magistrates court from $5,000 (set in 1981) to $15,000; again, costs may only exceed that amount if they are to be assessed by an official of the court or have been agreed by the prosecution and the defence.

Clause 16 of the Bill provides that liability for costs of a legally-aided defendant should not exceed his contribution paid or payable to the Director of Legal Aid towards the costs of his defence.

Wasted costs

Mr President, at present, there are no provisions governing wasted costs in criminal cases, so that where loss or expense is caused to any person by the unjustifiable conduct of criminal litigation by either side's lawyers, there is no remedy. Mr President, that cannot possibly be right. Clause 18 of the Bill arms the courts with an effective remedy for the protection of the injured. That clause enables the court to order the legal or other representative to pay the whole or part of wasted costs. Clause 2 of the Bill defines wasted costs to mean any costs incurred by a party to criminal proceedings as a result of an improper, unreasonable or negligent act or omission on the part of his legal or other representative, or where, in the light of any such act or omission occurring after such costs had been incurred, it is unreasonable to expect that party to pay. I should make clear that the court's power to make a wasted costs order would extend to the prosecution as well as to the defence.

In order to allay the concern that the interests of the legal or other representatives may not be adequately protected if the court intends to order wasted costs against them, clause 18(2) provides that no wasted costs order shall be made unless the legal or other representatives concerned have been given a reasonable opportunity to appear before the court to show cause why the order should not be made. It is intended that rules will be made under clause 22 of the Bill to make detailed provision for this safeguard.

Appeals

The Bill also provides for avenues for appeals against costs orders made by the court. Where any of the parties to the proceedings is not satisfied with an order for costs, he or she can appeal against that order under clause 19, or apply under clause 20 for those costs to be assessed by the court, or apply under clause 21 for a review of that assessment.

Mr President, the Bill sets out a fair and coherent set of principles governing the award of costs in criminal proceedings. It arms the courts with the power to prevent persons from suffering losses and expenses as a result of unjustifiable conduct on the part of lawyers. The Bill makes significant improvements to the administration of criminal justice and I commend it to this Council.

Question on the motion on the Second Reading of the Bill proposed.

Debate on the motion abjourned and Bill referred to the House Committee pursuant to Standing Order 42(3A).

EMPLOYMENT (AMENDMENT) (NO. 4) BILL 1995

THE SECRETARY FOR EDUCATION AND MANPOWER to move the Second Reading of: "A Bill to amend the Employment Ordinance."

He said (in Cantonese): I move the Second Reading of the Employment (Amendment) (No. 4) Bill 1995.

The levels of maximum fines under the Employment Ordinance (Cap. 57) and its subsidiary legislation, the Employment Agency Regulations, the Employment of Children Regulations and the Women and Young Persons (Industry) Regulations, were last revised in 1988. This Bill seeks to revise the maximun fines under these pieces of legislation to take into account inflation, to bring about tougher sanctions and to align the amounts of fines to the levels specified under the Criminal Procedure (Amendment) (No. 2) Ordinance 1994.

In the Bill, we propose that the various offences be classified as "minor", "serious" and "very serious" for the purpose of determining the maximum fines. The proposed maximum fine for "minor" offiences is $10,000 or at Level 3 under the Criminal Procedure (Amendment) (No. 2) Ordinance 1994. An example of such offences is the failure to keep employment records as required by the Employment Ordinance.

The proposed maximum fine for "serious" offences is $50,000, or Level 5 under the aforesaid Ordinance. An example of the "serious" offences is the failure to grant statutory benefits such as annual leave, long service pay and so on. Lastly, the proposed maximum fine for "very serious" offences is $100,000, or Level 6 under the aforesaid Ordinance. Examples of this type of offences are unlawful dismissal and infringement of rights in respect of union membership or activities.

We also propose to introduce a monetary penalty for contravention of Section 33(4B) of the Employment Ordinance, whereby an employer terminates the contract of an employee while he or she is on sick leave in respect of which sickness allowance is payable. This penalty will be pitched at "every serious level" with a maximum fine of up to $100,000.

This amendment exercise does not merely update the various fines. It is a reminder to employers of their obligations and that violation of the provisions in the Employment Ordinance will make them liable to heavy penalties.

Thank you, Mr President.

Question on the motion on the Second Reading of the Bill proposed.

Debate on the motion abjourned and Bill referred to the House Committee pursuant to Standing Order 42(3A).

LANDS TRIBUNAL (AMENDMENT) BILL 1995

THE SECRETARY FOR PLANNING, ENVIRONMENT AND LANDS to move the Second Reading of: "A Bill to amend the Lands Tribunal Ordinance."

He said (in Cantonese): Mr President, I move the Second Reading of the Lands Tribunal (Amendment) Bill 1995.

The Bill seeks to provide the Lands Tribunal with express jurisdiction under section 8(7) of the Lands Tribunal Ordinance (Cap. 17) to make orders for vacant possession, on the grounds of termination of tenancies, by notices of termination served pursuant to Part IV or V of the Landlord and Tenant (Consolidation) Ordinance (Cap. 7).

Under the Bill, the Lands Tribunal is to be regarded as always having this jurisdiction. This is to overcome the decision of the Court of Appeal in a civil appeal case in 1993 which held that the Lands Tribunal did not have such jurisdiction. Prior to this decision, the Lands Tribunal was believed to have possessed such jurisdiction.

We also take the opportunity to amend the Lands Tribunal Ordinance (Cap. 17) to reflect the current position on the appointment of members of the Lands Tribunal.

Mr President, with these remarks, I commend the Bill to Honourable Members for favourable consideration.

Thank you, Mr President.

Question on the motion on the Second Reading of the Bill proposed.

Debate on the motion abjourned and Bill referred to the House Committee pursuant to Standing Order 42(3A).

BANK NOTES ISSUE (AMENDMENT) BILL 1995

Resumption of debate on Second Reading which was moved on 18 October 1995

Question on the Second Reading of the Bill proposed, put and agreed to.

Bill read the Second time.

Bill committed to a Committee of the whole Council pursuant to Standing Order 43(1).

TAX RESERVE CERTIFICATES (AMENDMENT) BILL 1995

Resumption of debate on Second Reading which was moved on 18 October 1995

Question on the Second Reading of the Bill proposed, 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.

BANK NOTES ISSUE (AMENDMENT) BILL 1995

Clauses 1 to 10 were agreed to.

TAX RESERVE CERTIFICATES (AMENDMENT) BILL 1995

Clauses 1 to 3 were agreed to.

Council then resumed.

Third Reading of Bills

THE SECRETARY FOR FINANCIAL SERVICES reported that the

BANK NOTES ISSUE (AMENDMENT) BILL 1995

had passed through Committee without amendment. He moved the Third Reading of the Bill.

Question on the Third Reading of the Bill proposed, put and agreed to.

Bill read the Third time and passed.

THE SECRETARY FOR THE TREASURY reported that the

TAX RESERVE CERTIFICATES (AMENDMENT) BILL 1995

had passed through Committee without amendment. He moved the Third Reading of the Bill.

Question on the Third Reading of the Bill proposed, put and agreed to.

Bill read the Third time and passed.

MEMBER'S MOTIONS

INTERPRETATION AND GENERAL CLAUSES ORDINANCE

MR RONALD ARCULLI to move the following motion:

"That the Noise Control (General) (Amendment) Regulation 1995, published as Legal Notice No. 426 of 1995 and laid on the table of the Legislative Council on 11 October 1995, be repealed."

MR RONALD ARCULLI: Mr President, I move the motion standing in my name on the Order Paper. The motion seeks to repeal the Noise Control (General)(Amendment) Regulation 1995 under section 34(2) of the Interpretation and General Clauses Ordinance.

A Subcommittee under my chairmanship was formed to scrutinize this Regulation and 153 other items of subsidiary legislation gazetted from 30 June to 6 October 1995. Only a small number of items of subsidiary legislation dealt with fee increases. The Subcommittee studied these items carefully and decided to support those relating to film censorship and gambling licences and not to support the other 12 items of fee increases. One item of subsidiary legislation, the Port Control (Cargo Working Areas) (Amendment) Regulation 1995, was repealed by this Council at the last sitting. At this sitting, I will move motions to repeal 10 of them and to partly repeal one of them.

The Subcommittee shared the view that a freeze on the increase of fees and charges would be appropriate because of the economic slowdown, unemployment rate, inflation and the lack of consumer confidence. Furthermore the Government could well afford the revenue lost in view of our sound fiscal condition and huge reserves. The Subcommittee's recommendation is that we freeze increase for the year and is not meant to be abandoning the user pays or the cost recovery principles. Indeed if the economy and unemployment improve before 12 months the Government can always bring these increases back to this Council.

The first of the 11 items is the Noise Control (General)(Amendment) Regulation 1995. Published as Legal Notice No. 426 of 1995 and laid on the table of the Legislative Council on 11 October 1995, the Regulation increases the fee payable for a construction noise permit from $150 to $180 with effect from 9 November 1995.

Mr President, in accordance with the Subcommittee's recommendation which, I believe, was supported by the House Committee that the fee should remain at the existing level, I move to repeal the Regulation.

Question on the motion proposed.

SECRETARY FOR PLANNING, ENVIRONMENT AND LANDS (in Cantonese): Mr President, the Noise Control (General) (Amendment) Regulation 1995 seeks to adjust the fees payable on the application for a permit for two kinds of construction work, namely construction work using powered mechanical equipment and percussive piling.

Under the Noise Control Ordinance, the use of powered mechanical equipment for the purpose of carrying out construction work at night or on a holiday or the carrying out of percussive piling is required to apply for a permit from the Environmental Protection Department before the work is allowed to commence. This is to ensure that noisy construction work is conducted in accordance with the standard established by the Environmental Protection Department, thereby reducing noise nuisances in the neighbourhood.

The fees for the application for the permit was based on the price level of 1993, that is two years ago, and it is far below the cost incurred. The increase we are proposing this time only seeks to reflect a total inflation of 17.8% in 1994 and 1995. The fee adjustment this time will only have a very slight impact on the people in the trade, such as contractors for construction work and public utilities. The trade as a whole will only incur an extra expenditure of $80 000 as a result of the fee increase. However, if the adjustment is not approved, the level of the charges, which is already at the low end, will be further lowered. This will go against the "polluter pays" principle upheld by the Government. In this respect, I hope Members will reconsider our proposal of fee increase and oppose this motion.

MR LAU CHIN-SHEK (in Cantonese): Mr President, I will speak just once on this motion and all the subsequent motions moved by the Honourable Ronald ARCULLI today.

Mr President, the guidelines on fees and profits applicable to the more than 4 000 government services were discussed in detail during a motion debate as early as 1993 following this Council's veto of a Government proposal to increase the tunnel tolls. At that time, the Government undertook to review the guidelines on fees and profits. But the only actions that the Government has taken so far were the proposals it made at the end of last year for the computation of returns regarding five public utility services. And, the policy governing the fees and charges applicable to the remaining 4 000 or so items of services has not been given any review at all. As a matter of fact, Members of this Council have time and again requested the Government to prepare a classified list of all the services it provides, stating whether they are subvention-based, cost-recovery-based, profits-based or taxation-based. However, the Government has so far failed to produce such a list that can enable Members to discuss in detail whether the charging guidelines of the services concerned are reasonable or not. I hope that in the near future, the Secretary for the Treasury can provide this Council with such a classified list, so that we can conduct a comprehensive assessment on the charging policy of government services.

Mr President, Hong Kong today is facing a sustained high inflation rate, serious unemployment and economic sluggishness. Therefore, the Legislative Council must respond to the situation by working out solutions that can provide some relief to the people at work and the general public under such adverse economic circumstances. On that premise, I reckon that in order to curb inflation and protect the people's livelihood, it is necessary to freeze the fees payable for various kinds of government services. My hope was that for the purpose of arresting inflation and protecting the people's livelihood, the Legislative Council could reach a consensus on asking the Government to freeze all its fees and charges, public housing rentals, rates, public utility charges, and even the honoraria paid to Members at all levels of the representative government and the salaries received by high-ranking government officials. In the absence of such a consensus, however, if we now freeze some of the fees imposed on those industrial and commercial activities not having a direct bearing on the people's livelihood, but then choose to support future price increases of public utilities which affect the people's livelihood, it will simply be wrong for us to talk about freezing fees and charges to improve the people's livelihood, and our economy will not be improved.

Mr President, the 11 motions on fees and charges submitted to this Council for voting today are mostly related to industrial and commercial activities having no bearing on the people's livelihood. The price increases merely seek to recover the costs and some of the fees and charges concerned are actually related to the aim of environmental protection. Of these 11 motions, only two of them, which involve the fees charged for the supply of a Certificate of Roadworthiness form and for vehicle emission tests, can be regarded as not entirely commercial in nature because they are directed at all vehicles, including private cars not used for commercial purposes. Therefore, in regard to the 11 motions moved by Mr ARCULLI concerning the freezing of charges, I will support only the eighth and eleventh motions that relate to the subsidiary legislation of the Road Traffic Ordinance. I will vote against the remaining nine motions.

Mr President, I so submit. Thank you.

DR LAW CHEUNG-KWOK (in Cantonese): Mr President, Members from the Hong Kong Association for Democracy and People's Livelihood (ADPL) have earlier on voted in support of the Honourable Ronald ARCULLI's motion for freezing or repealing the increase of fees and charges. Last time when I spoke during the debate on the Governor's policy address, I also made clear the stance of the ADPL in respect of that decision. I can repeat that we gave a negative response at that time not because of technical reasons, but because we wanted to relay a clear message to the Government, and that is, the inflation rate of 9% at present is already very high. The Government's usual practice of linking the policies on various fees and charges with the inflation rate constitutes one of the main reasons why the high inflation rate lasts. The ADPL does not support such policy.

In regard to the motion moved by Mr ARCULLI today and the various items of fee increases mentioned below, the stance of the ADPL is very close to that of the Honourable LAU Chin-shek. We find that the fees and charges to be increased this time are mainly licence fees and permit fees, all related to business activities, and they have extremely limited direct impacts on the people's livelihood. Although some Members argued that we ultimately have to pay for whatever we are given, the ADPL definitely disagrees with the idea and thinks that there is no evidence to show this kind of relationship.

Among the 11 items of fee increases, the ADPL supports 10 items proposed by the Government, the only item dismissed is the one concerning the fee payable for vehicle emission tests. In my opinion, this fee concerns all the private car owners. Besides, whenever the police see that smoke is emitted from a vehicle, even if it is finally proved that there is nothing wrong with the vehicle, the private car owner still has to pay. We, therefore, oppose the charging of this fee by the Government.

I have to emphasize again that the ADPL does not request the Government to freeze all fees and charges. However, if the fees charged by the Government are related to the people's livelihood, for example, an increase in public housing rentals and other fees and charges directly related to people's livelihood, we will definitely voice our opposition in this Chamber.

Thank you, Mr President.

MRS ELIZABETH WONG: Mr President, I rise to make three points.

First, I would like to make the point about caring for our people.

We exist on the periphery of economic change. There is unemployment unacceptable at an all time high of 3%. This percentage, if I recall correctly, was recently claimed by the Chief Secretary at a CNN TV interview to be "good". With due respect to the Chief Secretary for whom I have the greatest respect, I must beg to differ. Whilst this percentage may be regarded as good by the standards of any other country, it is certainly not acceptable here. Hong Kong is not like any other country. For one thing, we are undergoing political change the likes of which we have not seen before.

Additionally, our unemployment problem is compounded by our high rate of inflation, still running at an uncomfortable 8%. We should do everything we can to resolve these problems.

Secondly, we should protect our environment.

The Secretary's impact analysis tells us that today's fee proposals are for environmental protection, with very little impact on inflation or on the consumer. I am convinced by his arguments.

On the subject of environmental protection, I share everybody's concern.

We all live on the same planet and there is only one planet to live on. Here in Hong Kong, we remove mountains and fill our seas. We have a highly polluted harbour: our harbour was once described as the Fragrant Harbour, now it is "fragrance" of another kind.

We are now paying a high price for this neglect of our environment.

However, to really care for our environment, I think we should spend more on environmental protection; and through environmental protection, we can create new jobs and be more creative about jobs.

Let us, indeed, work for a greener and better Hong Kong.

Thirdly, I shall refer to the new order.

We now have a fully elected Council. Every single one of us in this Council speaks for the people whom we represent. On a practical and realistic basis, we should work in partnership with our executive-led Government. This partnership, I hope, is what the Governor meant in his October address entitled "Our work together", on which there is pending a vote of thanks later on this afternoon.

On the subject of fees and charges, the Government could start, for example, by working with this Council to withdraw altogether all increases in fees and charges for at least six months until the economy turns better.

Here, I should ask the Government to pluck the wax from their ears and listen to the voice of the people.

Otherwise, the Gubernatorial personages will suffer the inevitable disaster of finding themselves either shipwrecked or drowned in the eddy-whirls of change. Now to follow the Financial Secretary's own penchant for classical allusion, I call on him not to think about the Siren but to think of Scylla and Charybdis instead.

Mr President, I appeal to the Government to do what is right. By withdrawing for future reference proposals for fee increases until the economic climate is right and until the Government can properly rationalize the fees and the categories just now mentioned by Honourable LAU Chin-shek and then to discuss them with us as I suggested at a similar debate.

DR HUANG CHEN-YA (in Cantonese): Mr President, on behalf of the Democratic Party, I would like to speak on the proposals in regard to the 11 items of charges. Last time, I already put forward our point of view. In April last year, the Democratic Party proposed that the Government should, in light of the adverse inflation in Hong Kong, freeze the price increases in respect of the three railways and public utilities, as well as the increases in public housing rentals and government charges. Last time, I also mentioned that we believed this could ease inflation, and would be beneficial to the people's livelihood and Hong Kong's economy.

Last week, an economist presented an important viewpoint ¢w the factor of expectancy is one of the factors that contribute to Hong Kong's inflation. That is to say, everyone asks for an increase in fees or wages as a result of the expectation that inflation will continue. As a result, the pressure of inflation continues. Such mentality of expecting inflation can in fact be curbed if the Government voluntarily stops or freezes price increases, which will be of even greater assistance to ease Hong Kong's inflation. Again, I hope that the Government can voluntarily freeze its increases in fees and charges.

Just now, the Government said that the polluters should pay for the increases. It sounds that this issue is related to environmental protection. But if we think carefully, it is mainly the licence and permit fees that are going to increase this time. From a more pragmatic point of view, does it mean that we can lower the noise level by increasing the charges from $150 to $180? If so, does it mean that we can make wastes disappear from Hong Kong by raising the waste disposal charges? The answer is definitely negative. Such argument can only lead to confusion and illusions. As a matter of fact, the charges in question only apply to licences and permits and the charges are not meant to be a kind of penalty to the polluters. Neither is the Government imposing higher charges on the polluters for raising the level of pollution. According to the charging policy of the Government, one is not required to pay an extra $50 for making an additional noise nuisance of 10 decibels. Such argument is basically confusing. The increases are purely connected with inflation and have no direct bearing on environmental protection at all.

I hope the Government can explain in detail its charging guidelines and how it calculates each item of charges when it explains its charging policy to the Financial Affairs Panel next week. It is because the inflation figures worked out by the Government are different from the inflation figures in general. It seems that the Government has a different method of calculation. Why is that the case? I hope the Government will explain why the fee increases are not conducted on a yearly basis but at a certain interval. Which of the increases are related to people's livelihood and which are related to environmental protection? I hope the officials concerned can provide us with the relevant information next week, that is, on 10 November.

Here I would like to talk about a phenomenon that can be seen from the general control of water pollution. This time, the Government says that freezing this item of charges will reduce its revenue and so the Government may have to consider increasing taxation. Regarding the issue of water pollution, we can see that the charges have in fact remained unchanged over the past few years. Why should additional charges be imposed this time? The reason given by the Government is that the charges have to be adjusted from 1991 onwards. Is it not the same as giving the officials all sorts of power while the public are deprived of their basic rights? For many years, the Government has voluntarily frozen its fees and charges because it did not want to make any increases. What this Council asks for is a freeze on price increases for this year, but the Government has started to complain. This reflects that the Government's opposition is not because of financial consideration but rather the question of executive-led government, that is, it is aimed at this Council's authority to prevent the Government from formulating any administrative policy that Members deem inappropriate. In view of this, the Democratic Party will oppose the Government's proposals of price increases and support the Honourable Ronald ARCULLI motions.

MR JAMES TIEN (in Cantonese): Mr President, the Subcommittee in question was chaired by the Honourable Ronald ARCULLI, and apart from him, I was the only member from the Liberal Party. At that particular meeting of the Subcommittee, colleagues from the democratic camp were also present. At first, I did not think that I would have to speak. I told myself that unless the Liberal Party and the democratic camp really failed to agree with each other, I would not have to do or say anything further. In the past, once an issue was associated with the democratic camp's banner, no one would dare to say anything about it. However, I have just noticed that someone is even mightier than the democratic camp. He is the Financial Secretary. Recently, practically all newspaper editorials have directed their attacks at the entire Legislative Council, questioning why the whole Legislative Council has chosen to act so unreasonably as to freeze the increases in government fees and charges. Some newspapers even commented that the Liberal Party had changed into a "free-lunch" party. Others noted that the industrial and commercial sector was able to twist the Democratic Party round its little finger. I do not think any of the above comments are justified.

Mr President, with regard to the various items of fee increases under discussion today, I just want to ask one question: in any modern society today, who is the wealthiest? If we do not take the communists into consideration, we can say that in countries all over the world, the three wealthiest sectors are the government, the industrial and commercial sector, and the people. Of course, since ruling communist parties operate state enterprises, the government in their case is also the industrial and commercial sector. Therefore, theoretically, in the Hong Kong context, the Government, the industrial and commercial sector and the people should all be wealthy. However, I have to point out that in reality, the people have no money, while the industrial and commercial sector has some. As for the Government, excuse me for saying so, Mr Governor, I must point out that it is the wealthiest of all.

Why have I said so? The Exchange Fund has increased to more than $400 billion. As regards our reserves, although the amount of reserves to be handed over to the Special Administrative Region Government in 1997 was to be increased from $5 billion to $25 billion under an agreement reached with China in 1991, our reserves has already reached $150 billion as at today. Since the Hong Kong Government has done particularly well in financial management, the rate of return for last year was 12%. On the basis of this rate, $150 billion will yield a return of 18 billion per annum.

We are not against the principle of prudent spending as advocated by the Government. We all support careful spending. However, does "prudent spending" in the present context really mean that we should in fact amass as much as possible and spend as little as possible?

If the Government is so wealthy today, can it consider slowing down the rate of amassing government reserves? But, mind you, we are not asking for a complete halt. And, even if our proposal on stopping fee increases will lead to a revenue loss of $2 billion, this is really not much when compared with a total of $180 billion.

We cannot possibly reject the Budget announced in March. Although we are told by the Government that our fiscal reserves will increase to more than $100 billion, we cannot ask the Government to stop amassing reserves immediately. The only thing the Legislative Council can do is to talk with the Government about the $2 billion in question to see whether it has any intention of keeping this sum of money in the people's pockets. Keeping this sum of money in the hands of the industrial and commercial sector and the people will serve two useful purposes. If the people have more money, they will spend it, and this will mean more business for the industrial and commercial sector. When the industrial and commercial sector has more money, wages can be increased and the rates of price increases reduced. I have certainly noted the Honourable LAU Chin-shek's point that we must not refuse to support the objection to public utility charge increases. However, my view is that if the Government can take the lead today by freezing the increases in fees and charges payable for all its 4 000 items of services, the rise in operating costs of public utilities will sooner or later decrease, and this will give the operators fewer grounds to increase their charges.

Mr President, next, I want to talk about who should be held responsible for causing inflation in the first place, something which is similar to the "chicken and egg" puzzle. Who actually caused inflation in the first place? Whatever the answer, if the Government can freeze the fees and charges payable for its 4 000 items of services, then, one way or another, we people in the industrial and commercial sector will be benefited in terms of cost reduction. Will this also be helpful in reducing the inflation six months or a year later? I think so.

Again and again, the Government insists that an increase of 8% in fees and charges is needed for the purpose of catching up with inflation so that civil servants can have salary increases. If we accept such an argument, the cycle of events leading to inflation will continue to exist uninterrupted. Who then should act first to interrupt this cycle? In my view, as the Government has the most money, it should take the initiative. Giving up this $2 billion will not create any problems for the Government at all, and it must be pointed out that our reserves of $150 billion is not invested in Hong Kong, but is used to buy foreign securities or treasury bonds or the like, to boost the economy of foreign countries rather than that of Hong Kong. However, if this $2 billion is kept in the hands of the local industrial and commercial sector or the people, mutual benefits will result because of the subsequent consumer spending and business expansion. Therefore, for reasons of such benefits, I hope that friends from the labour side can consider whether we should stop the Government from increasing its fees and charges. By our joint efforts, we can force the Government to reduce its own rate of increases. In this way, inflation can be checked, and the economic situation improved. The business sector may then be able to provide more job opportunities.

Mr President, with these remarks, I support Mr Ronald ARCULLI's motion.

MR PAUL CHENG: Mr President, like my colleagues in this Council, I am concerned about the state of our economy. However, I fail to see how freezing the fees and charges under today's motions would help the economy.

Today's motions are at best symbolic. The amount of money involved is not significant regardless of which side one stands on this issue. There must be other ways to make the point and there must be better ways for us to work with the Administration to improve our economy. I am a firm supporter of the user pays principle. The Administration is merely proposing the increases on the basis of catch up inflation adjustment. For example, some fees have not even been adjusted for several years. As I do not want to stand up during each motion, I am making these remarks to cover the rest of the 10 motions. I shall be voting "No" against the proposed motion.

MR CHAN KAM-LAM (in Cantonese): Mr President, we already made our position clear in the last meeting and we had indeed carefully considered the price increases proposed by the Government. I think what the Government should do now is to take the lead to curb inflation instead of trying to catch up with it. The price increases now proposed by the Government are obviously for the purpose of catching up with inflation, recovering costs, or covering other expenses with certain fees and charges. In my view, the Government should do more to curb inflation as our overall economy is now slackening. This is very important indeed.

In our opinion, although these fees and charges may not be directly related to the people's livelihood, increased costs on the part of the business sector will also increase expenditure related to the people's livelihood. Some Members reckon that noise producers and polluters should pay for their charges. I very much agree with them. However, I will only give my support if the fee increases can have a deterrent effect on noise producers and polluters. Unfortunately, the fee increases this time have absolutely nothing to do with the noise producers and polluters. As it is my view that the increases will not make our environment quieter, I will support the Honourable Ronald ARCULLI's motion.

Thank you, Mr President.

MRS SELINA CHOW (in Cantonese): Mr President, I did not intend to speak. However, after listening to the Honourable LAU Chin-shek, I feel a need to respond. I think this time the Financial Secretary should congratulate himself. He has put in a lot of efforts in lobbying both Members and the media, and this has enabled him to obtain considerable support. Unfortunately, his lobbying efforts have led to some extremely negative effects. According to the rationale behind his lobbying, increases for economic items and livelihood items should be considered on two different bases. Then, he argued that freezing the fee increases for economic items would benefit the industrial and commercial sector only and that freezing those for livelihood items would do good to all the people. Hence, if one was concerned about the livelihood of the people, one simply should not let the business sector gain any benefits. Now this reasoning is very dangerous to a community like Hong Kong, which is noted for its emphasis and reliance on economic performance as a means of enabling itself to improve the people's livelihood. Such a suggestion is rather dangerous as it will divide our community.

The various sectors of our community have become so interdependent that businessmen and workers must unite and care about each other. We should not ignore the difficulties faced by the business sector just because a certain matter under consideration is a livelihood issue. Nor should we concern ourselves with livelihood issues only and totally ignore the interests of the business community.

As a matter of fact, such an undesirable attitude is already in existence. I can say that the Wholesale and Retail Functional Constituency, which I represent, fully supports our principle of requesting the Government to freeze all fees and charges for a year. Owing to different approaches to calculations, people do differ on the impacts of fee increases, with some maintaining that their business will be substantially affected. Any businessman can confirm that fee increases will definitely affect his business because costs will go up, and so will inflation. Some may well say that this is just the concern of the business community, and has nothing whatsoever to do with the people's livelihood. But, the point is that the economy and the people's livelihood are so interdependent that they simply cannot be regarded as two unrelated issues. When operating costs increase, how can the prices paid by consumers remain unaffected? With just a little bit of careful thinking, one will easily see that the rationale concerned is entirely not justified!

Businesses are having a difficult time. Even non-business people are quite aware of this. It was said that polluters should be made to pay and so sewage charges were increased sharply. As a result, some restaurants have closed down. In the end, it is the workers who suffer because they will lose their jobs. This shows that workers and businessmen are interdependent and in the same boat. They should help each other out. I hope that the Government will refrain from basing its arguments on the rationale mentioned. It should not divide the community by doing anything to foster a separation of businessmen and workers.

Mr President, I support the Honourable Ronald ARCULLI's motion, and I hope other colleagues will do so as well.

MISS CHRISTINE LOH: Mr President, with your indulgence, I would also like to speak just once and highlight all the 11 items of charges today.

The question that we are really considering today is: Should taxpayers further subsidize polluting industries or should the industries themselves foot the bill? The motion is asking us to freeze charges on licence fees to polluting industries and pass the cost on to the general taxpayers. I cannot agree with the motion. The public should not subsidize the cost of ensuring that a waste disposal operator complies with the law, or for that matter, that a company meets the legal requirements to discharge waste into the harbour or dump sludge into the sea, or for that matter, use a more appropriate jack-hammer.

I feel some of my Honourable colleagues have misunderstood that these are environmental penalties; listening to Dr HUANG Chen-ya, he seems to think so. But if we just take the first example of noise control, we are really talking about a permit fee for using a percussive piling equipment, and we are increasing the charge from $150 for that permit to $180. So, if indeed a particular company uses these percussive instruments and exceeds noise control, there is other legislation to control that excess. This simply deals with the licence fee for the permit of using the equipment. So I do not think we should look at these necessarily as environmental charges as such.

Last week, Mr President, I voted against the Government's proposed increased charges for port services because I did not think the Administration adequately informed us about the composition of those charges. This week, however, the Government has provided sufficient information, first of all in the letter they sent us on 26 October. And further I have had extensive discussion with the relevant officers in the Government to ask for further information because I think it is important for us to understand how these charges are made up. I only wish that the Government could have provided all legislators with more information. And in looking at the totality of all the charges, 10 out of the 11 proposals would only bring to the Government no more than $1 million a year. That is really very little. Even if we added on the 11th proposal, which is an increase of what seems to be a very large increase of 58.5%, the total increase to government coffers is only about $2 million extra from the old charges.

So I really find the argument about inflation and unemployment staggering because, again, we are really looking at licence fees increase in some cases from $120 to $145. There is no way that any one can convince me that a construction company would go down the tubes for paying an extra $25 a year for that licence fee, or for that matter, that they would hire fewer employees.

So on this basis, Mr President, I will be voting in favour of the Government's proposal. Thank you.

MR ALBERT CHAN (in Cantonese): Mr President, I am now speaking in my personal capacity, not on behalf of the Democratic Party. I wish to clarify two issues, one of which is concerned with charges. Just now some Members have pointed out that certain charges are related to environmental protection. I have been a member of the Environmental Pollution Advisory Committee for six years, and I am astonished to find that the Honourable Miss Christine LOH, who is also a member of the Committee, has some misunderstanding about the issue. Just now, she cited the example that the application fees for noise permits would be increase from $150 to $180. I have just made some calculations. If we build a 30-storey building, assuming that it costs $600 per square foot, the construction cost of the building with 600-square-foot units will be $86 million. What impact will a $30 increase in permit fee have on the environment?

When scrutinizing the Bill, the Bills Committee has also taken this issue into account and I have also raised the issue of environmental protection. If a fee increase proposed by the Government in the future would really have environmental implications, as what I said at the meeting at that time, we would handle matters relating to environmental protection with special circumspection. But the 11 items of charges, including those related to legislation concerning environmental protection, are purely aimed at cost recovery. From the angle of environmental protection, I can clearly and firmly say that they would have no real impact on environmental protection. I hope Members will read the documents carefully and will not mislead the public by using environmental protection as a pretext.

Also, I would like to talk about the process by which the Bills Committee discuss matters. I am disappointed at the fact that the Honourable LAU Chin-shek openly opposed the fee increases only yesterday. Mr LAU and I have been colleagues for years. During the past few weeks, that is, from the time when the documents were received and the Bills Committee held its meetings up to the time when the House Committee convened its meetings more than a week ago, Mr LAU had not told me that he opposed the Bills Committee's decision and the fee increases.

In my opinion, the Legislative Council operates in a level upon level system. Should problems arise, we will form an ad hoc committee to scrutinize the relevant legislation. There is always an operational process regardless of whether bills are being scrutinized or a subsidiary legislation is being scrutinized by a subcommittee. I clearly remember that when the last Session was drawing to a close, the Honourable Mrs Miriam LAU grumbled about the issue of Members' interests. When the meeting was adjourned, I immediately went to apologize to her outside the Chamber for I had failed to follow up the issue last year and I had to vote against the motion when a final decision was to be made. What I did was very unfair to her.

In my opinion, Members must deal with problems under a system. As Members received the documents concerning the fee increases a month ago, if they found any problems after reading the documents, they should be aware of such problems at that time. Besides, discussions and decisions made by the subcommittee under the chairmanship of the Honourable Ronald ARCULLI have been reported for a number of times on newspapers. However, from beginning to end, only the Dr the Honourable Samuel WONG told me that he did not support our decision. If many other Members, especially Members from the Democratic Party and other democratic groups and those we are in frequent contact with, have such a strong view, I hope they can send representatives to our subcommittee meetings and express their views when they meet us. If they do not fight for what they uphold throughout the whole process, I wonder whether they have discharged their bounden duty as Legislative Council Members.

I have just written a note to the Honourable LEE Cheuk-yan and expressed my great discontent with what the Hong Kong Confederation of Trade Unions has done this time. Throughout the process, Members from the Hong Kong Confederation of Trade Unions had never made their views known to this subcommittee or to the House Committee. Yet they held a press conference in a high profile yesterday. Mr President, I only knew that they were against it when I read the newspaper today. I am very discontented with this. It is understandable that Dr the Honourable LAW Cheung-kwok from the Hong Kong Association for Democracy and People's Livelihood, who is a new Member, might not be very clear about the process. But as to some old Members, I hope they can make the best use of this system, and hold debates and discussions on the pros and cons within this system and make a sensible decision together. Only in this way can the Legislative Council function in a more mature manner.

Now, the new legislative Session has just begun and there are 20 months ahead of us. I do not know whether we can achieve that in the future, but meetings will still be held. We should, at least, respect this system in the next 20 months. If Members want to work this way, then we will not have to hold subcommittee meetings any more as discussions can be held in this Council and votes can be cast right away. Why should discussions in a subcommittee ever be needed? I am grumbling just like what Mrs Miriam LAU did towards the end of last year. I hope Members will respect this system as well as their capacity as Members of the Legislative Council. Thank you, Mr President.

MR IP KWOK-HIM (in Cantonese): Mr President, this time the Government has proposed to raise substantially the charges of 12 items of services on the basis of the "user pays" principle. The Democratic Alliance for the Betterment of Hong Kong (DAB) is, in principle, supportive of the "user pays" principle. However, it is not, and should not be, the only criterion for approving fee increases. Otherwise, the rentals of public housing and school fees would certainly not have been set at the present levels. The DAB raises its objection this time only because the Government's proposed fee increases come at a time when Hong Kong is experiencing economic slowdown and high inflation. No matter how genuine the Government's intention is, the means adopted is undesirable. This is because such move will send a wrong message to the public who would think that the Government is taking the lead to raise prices. If the public utilities take a leaf out of the Government's book and propose increases which are higher than inflation, how can the Government reject their demands in an effective and convincing manner?

Some people think that only users of those government services, mainly the businessmen, will be affected by the fee increases this time and there is no reason for the public to subsidize these businessmen. The DAB agrees with this principle. However, is it necessary for the Government to recover the costs so hastily? Can the costs be recovered progressively over a longer period of time and through more moderate increases? So far, the DAB has not heard of any reasonable proposal and argument for the increases.

With these remarks, I support the proposal to freeze the 11 items of fee increases.

MR LEE CHEUK-YAN (in Cantonese): Thank you, Mr President. Originally, I did not intend to speak. But after listening to the speeches made by Members, I would like to respond.

Earlier on, the Honourable Albert CHAN said there was a note for me. I am now going to read out the note handed to me by the Honourable LAU Chin-shek. He said he did not hold any press conference yesterday and besides, he had informed the mover of the motion, the Honourable Ronald ARCULLI, and the chairman of the Democratic Party of his opinion. I would like to respond most to what the Honourable James TIEN just said about the press or the Government being experts in splitting up Legislative Council Members. I want to make this clear that I have learnt the trick from the Financial Secretary. I have plugged "wax" in my ears so that I would not allow what the Government said to cause confusion. In this aspect, I am taking a leaf from the Financial Secretary's book.

Why does the Hong Kong Confederation of Trade Unions adopt such an attitude this time? It is not because we have been lobbied by the Government. Frankly speaking, the Government has not discussed the matter with me or Mr LAU Chin-shek. It is not a matter of the Government's lobbying at all. A specific and crucial question is whether the Liberal Party has demanded to freeze the charges out of their concern for the people's livelihood or for the interests of the business sector? Just now, the Honourable Mrs Selina CHOW has repeatedly said the economy is not separable from the livelihood of the people. However, history has specifically told us that the Liberal Party regards the two issues as separate items. When talking about the livelihood of the people, the Liberal Party would often say that Hong Kong is a commercial society and therefore we cannot freeze public utility charges to deprive the business organizations of their profits. It would also say the charge increases must be approved. Concerning the question of the livelihood of the people, the Liberal Party always used to speak in the interests of the business sector. How then can we believe that the Liberal Party will act differently on this occasion and speak in the interests of the livelihood of the people? If the Liberal Party told us that it would support the proposal to freeze the rental increase of public housing and other charge increases proposed by the public utilities (it may argue that these issues do not fall into today's discussion, but if it could only make its stance clear by saying that Legislative Council Members should unite to combat inflation and protect the people's livelihood), I would have a totally different view. Otherwise, if the Liberal Party is not siding with us on the question of the people's livelihood, I would ask and examine, with reference to this freezing of charges, whether the Liberal Party is really safeguarding the people's livelihood as it has claimed. Frankly speaking, the conclusion I have reached upon examination is that this time it has little bearing on the people's livelihood. Mrs Selina CHOW would certainly say that I am separating the question of the people's livelihood. However, has the Liberal Party ever stood on our side? Hence, I think that after today's discussion, it may be worthwhile for us to discuss again whether we have a common policy to combat inflation and protect the people's livelihood. If we do have such a common policy and if the Government proposes any charge increase in the future, we can discuss again whether we should freeze all charges, which will certainly include the increases of public utility charges and public housing rentals. If our positions are the same, I would really think that the purpose of our sitting here today to discuss about government charges is to safeguard the livelihood of the people. Otherwise, I will have the feeling that the Liberal Party is selectively waving the flag of the people's livelihood or "playing the card of the people's livelihood" on certain issues only and that it chooses to propose a charge freeze only on this occasion. If what the Liberal Party takes is a "broad-brush" instead of selective approach, I would immediately take a "broad-brush" approach together with the Liberal Party; but if it is selective, I would have my options too.

Today, the decision I have made after considering my options is that we oppose items 8 and 11 of the charge increases proposed by the Government. I would give a brief explanation and I hope the Transport Department would pay attention because it is highly technical and related to government policy. Item 8 concerns the system of examining vehicle for fume emission. I oppose the proposed charge increase because the whole system is unfair. In the first place, the system very often relies on the naked eye to determine whether a vehicle emits excessive fumes. Just now, Dr the Honourable LAW Cheung-kwok said the system was administered by police. Actually, it is not administrated by police officers, but by voluntary workers like Ms Cherry CHUNG, who offered the scheme her helping hand. I do not mean that she has not done a good job, but the crucial point is very often that whether a vehicle should be subjected to examination is determined by the naked eye of an untrained person. Besides, the biggest problem hinges on the increase of the examination fee from $170 to $200. There is nothing we can say if the driver is required to pay for the examination fee after it is proven upon examination that excessive fumes are emitted from his vehicle. But the response of professional drivers is even if it is proved that no fumes are emitted from their vehicles, they would still be required to pay the $170 (or $200 as now proposed). In other words, even if a driver is innocent, he would still have to spend time to have his vehicle examined. Besides wasting his time, he would also have to pay for the examination. That is the only aspect where we hope the Government can make changes to its policy. It really gives no cause for much criticism if drivers of vehicles emitting fumes are required to pay. In fact, they should do so because they are the polluters. If that is not the case and the driver is being wronged, he should be exempted from paying the examination fee. The policy would also be much fairer if innocent professional drivers and private car owners are exempted from the punishment. That is the reason why we oppose the proposed charge increase of item 8. Thank you, Mr President.

MR ALLEN LEE (in Cantonese): Mr President, in fact I already requested the Government to freeze the increase in fees and charges instead of freezing the fees and charges when I spoke last week. However, some people got the impression that I was asking to freeze the charges. I am going to raise three points today. But I do not want to refute the point made by the Honourable LEE Cheuk-yan about how they would react to the moves of the Liberal Party, because this decision is not made on the basis of principles.

First of all, does the economy of Hong Kong has any problems today? The government officials have said that there was no problem and so has the Governor. Do you think that the Hong Kong society today is facing an economic problem and is it necessary for our economy to be boosted? Of course, the Government does not want to reveal this. However, when the economic report for the fourth quarter is released, we will know that there is a downturn in the economy of Hong Kong. The Financial Secretary will then admit that our economy has declined from the level of 5.9% in the first quarter. How is our economic situation now and what will it be next year?

Who is the wealthiest person? The Honourable James TIEN said that the Hong Kong Government was "flooded" with money. Where does the money come from? It comes from the taxes paid and other payments made by the general public, the Government has surpluses and has accumulated wealth. The money belongs to the Hong Kong people. However, the fees and charges have to be increased now. Everyone in Hong Kong, no matter he is doing business or not, has to make payments to the Government. Does the Hong Kong Government need money today? If it has the need, we will give it our support. Of course, the operation of the Government needs money. I have asked the Financial Secretary this question myself quite a number of times today. But my conclusion is that the Hong Kong Government today does not have to increase tax revenue through increasing fees and charges. Reasons such as "cost recovery", "user pays" and so on given by the Government sound highly principled. In fact, these are all taxes and there is no difference. Any income of the Government is tax revenue. Some people use the term "user pays" to deceive us while others use "cost recovery". Should that be the case, the "user pays" principle will also be applicable to children's education and medical treatment. Why is that impossible? The Honourable Paul CHENG is a businessman. Can he not understand? All kinds of income are the same, they belong to the Government. When the Government has got enough money, it should use the money on the public. This is what we should urge the Government to do.

Why did the Liberal Party go to see the Governor before he delivered his policy address? It was out of our desire to boost Hong Kong's economy. Now that there are problems with our economy, the Government should take the lead. Only when the Government has taken the lead can inflation be contained and the fees and charges not be increased. I have mentioned that in 1991, when the Government froze the increase in fees and charges for nine months, inflation began to slow down. Many of the Members then are still in this Chamber now. It is only because the Government does not want to do so today that it sets out another argument.

In my opinion, this is not a political but an economic struggle. Are we going to rescue the economy of Hong Kong? What is the cause of the high unemployment rate today? Is it because of the importation of labour? If there are still problems with our economy after we have stopped importing labour, I will put the blame on the Honourable LAU Chin-shek. I, therefore, reckon that the Government has to take the lead now. As regards public utilities, they have contracts with the Government. I hope that when they are considering their rates of increases and whether there should be an increase in fees and charges, they would take into account the fact that the Government has taken the lead to freeze the increase in fees and charges. The principle is to act in concert with society. Mr LEE Cheuk-yan requests that we should promise to indiscriminately freeze all fees and charges today. This is not possible, and we do not have such power. But we can negotiate with them because we know who they are. Only when the Government has taken the first step will other people be willing to follow, and it is most likely that they will follow. I, therefore, hope that Mr LEE will reconsider the issue.

I am very glad that Members from the Democratic Party support freezing the increase in fees and charges today. Why? It is because at least they understand that in respect of the operation of our economy, the increase in fees and charges will have a great impact on Hong Kong. Are we going to wait until 1996 when we see an economic downturn before beginning to take remedial measures? Thus, the Legislative Council should urge the Government to take action at this moment. If the Government refuses to take our advice and continues to submit the proposal for an increase in fees and charges to this Council, we will vote against such proposal. Only this is an explicit message. Members from the Liberal Party has always taken a firm stance in respect of this issue, not only because we understand the operation of our economy, but also because we hope that the Government will discharge the duty of a leader. Today, the Liberal Party will support the Honourable Ronald ARCULLI's motions.

MR FREDERICK FUNG (in Cantonese): Mr President, according to the information supplied to us by the Government, increasing the 11 items of fees and charges under discussion today will bring an extra revenue of $3,117,500 in total to the Government. Just to what extent can this $3 million stimulate economic growth? I really cannot tell. What about the adverse economic impact of not having this amount of revenue? That I really cannot tell too. The only thing which is clear is that the Government should not take the lead in raising prices. This idea was discussed in our debate on Cargo Working Areas last week, and we really hope that the political parties with Members in this Council and all the other people involved can adopt the stand of asking the Government and public utility companies not to increase their fees and charges in the coming year. We hope to secure such an undertaking.

In the past 10 days or so, the most vigorous lobbying directed at me did not come from the Government, as I received just one telephone call from a Government official. Rather, it came from my colleagues in this Council, who urged our party to adopt a uniform position and join the other parties in requesting the Government and public utility companies not to increase their fees and charges. The purpose of our objection to the Government's proposed fee increases this time and last week is meant to send a strong message regarding the aforesaid position. However, much to my disappointment, from my colleagues in this Council, especially the Honourable LAU Chin-shek and those belonging to the Confederation of Trade Unions, and also from the Honourable James TIEN's speech today, I have learnt that the Liberal Party is not particularly strong in its opposition to the fee increases of public utility companies. Well, at least, Mr James TIEN said a short while ago that if the Government did not increase its fees and charges, public utility companies would naturally follow suit. I for one would not care about whether public utility companies would ask for price increases. But, what I do care about is whether the Liberal Party would at least adopt the same stance and value judgment as we do, and side with us in opposing not only the fee increases of the Government, but also the price rises of public utility companies. It is a message to this effect from the Liberal Party that matters. It is precisely the principle behind this message that we and Mr LAU Chin-shek decide to uphold and adhere to following our discussion. When the Liberal Party says that it would consider its position regarding the price rises of public utilities only when they are proposed, we find the message concerned weakened. When the message weakens, and when the Liberal Party wants to consider public utility price increases case by case, we would also do the same. I cannot claim that I represent the positions of Mr LAU Chin-shek or Mr LEE Cheuk-yan. But I do feel that we have a common understanding.

Regarding the proposed fee increases under discussion today, I would like to raise another point in response to the comments made by the Honourable Mrs Selina CHOW, who is not in the Chamber right now. According to her, the current recession faced by the restaurant business is attributable to the imposition of sewage charges. Her reasoning is that the "polluter pays" principle has plunged the restaurant business into a worsening recession through the imposition of sewage charges. However, I can remember that when the Government proposed to levy sewage charges a couple of years ago, the Liberal Party was the first to give its support. As for the Democratic Party, although it found the charges too high, it still accepted the proposal after stating its strong reluctance. The only party that opposed the proposal at that time was the Hong Kong Association for Democracy and People's Livelihood (HKADPL). Now, when it talks about the same issue again today, the Liberal Party asserts that the sewage charges levied under the "polluter pays" principle are the villain. If that is true, why then did the Liberal Party support the proposal? So, I think what Mr LEE Cheuk-yan said is extremely important. If the Liberal Party can promise me at this sitting today that they would side with us in the year to come in opposing all price increases proposed by the Government and public utility companies, the HKADPL, like everyone else, would immediately rise to oppose the proposed fee increases in question. If the Liberal Party cannot give such a promise, I will then have to consider the proposed fee increases item by item. Where a proposal for fee increase is for an item related to the people's livelihood, we would support the Honourable Ronald ARCULLI; otherwise, we would oppose.

The proposed fee increases in question range from $4.5 to some $2,000 in actual money terms. We have absolutely no illusion about what such fee increases can achieve, and we do not think that they can solve the pollution problem. At best, they can only serve to enable the Government to recover the basic costs of issuing the licences. These costs are different from those mentioned in our last discussion about Cargo Working Areas. During that particular discussion, the Government said that capital costs should be included and that such costs had to be recovered in three years. On this, we did disagree with the Government, and there indeed were heated arguments. Why three years? Why not five years or seven years? Why not follow the example of the Housing Authority, which sets the cost-recovery period at 40 years? However, despite the arguments, we were still prepared to look at how long the cost-recovery period should be. This time, the situation is different, as most of the proposed increases in question involve costs of a recurrent nature. If some more colleagues from the Liberal Party are going to speak later, I do hope to hear from them a confirmation that the Liberal Party will support the freezing of all price increases proposed by the Government and public utility companies. I do hope that all the 60 Members of us in this Council can fight in concerted efforts over the issue of fee increases. Thank you, Mr President.

PRESIDENT: Mr Paul CHENG, do you have a point of order or a point of elucidation or explanation to make?

MR PAUL CHENG (in Cantonese): I would like to respond to Mr Allen LEE's speech.

PRESIDENT: Mr Paul CHENG, under Standing Orders, you are not permitted to speak for a second time.

MR CHIM PUI-CHUNG (in Cantonese): Mr President, in regard to calling on the Government to freeze the increase in fees and charges, we can see that political party members and independent legislators each has an axe to grind and they have not given their honest opinions on the issue. Mr President, I hope the 59 Members here all have the right to express their own opinions. Members should not respond to what other Members have to say. Actually, a Member does not need a response from others after he speaks, because he has the right to express his own views. I hope that in future Members, especially those belong to political parties that command a majority, will not interfere with other Members expressing their views. You should not give a response either. It should be up to the community to respond to their speeches.

Mr President, we must bear in mind that inflation is not a situation peculiar to Hong Kong. Countries around the world have to face the same problem. As I said in the past, inflation is one of the four major ingredients of a progressive society and is unavoidable. First, we have to understand that our principal goal is to urge the Government to freeze the public fees and charges temporarily in the following period of time, say six months, nine months or a year. If you say it is not these items, that is not fair, is it? How could that be justified?

Mr President, the most important thing for a parliament is to maintain a balanced development. If Members from two political parties together take up more than 50% of the seats, they would become a ruling party in disguise. The ruling party would have to be very cautions in assessing any matters. As things develop, the ruling party could use the parliament to subject the executive-led Government of Hong Kong to a serious challenge. If we look at this year's appointment of chairmen and vice-chairmen of various panels under this Council, there was co-ordination and a tacit understanding between the Liberal Party and the Democratic Party. Basically, one could say that the two parties have monopolized all those seats. A medical practitioner can actually become the chairman of a panel that covers all the financial affairs in the territory and see with all matters of the Panel on Financial Affairs......

PRESIDENT: Mr CHIM Pui-chung, may I remind you that you have to stick to the substance of the motion.

MR CHIM PUI-CHUNG (in Cantonese): Mr President, I am just stating a fact: if two political parties can control a parliament, they must be very careful in assessing their power. They should act as a balancing force of the whole society rather than test the strength of the Government on a certain issue, such that if the Government does not negotiate with them, they will use this issue to try and see whether the Government will bow to pressure, so as to assert the representativeness of their parties.

Mr President, I hope that before they do anything, they will assess the future situation. I reckon the public would not like to see in society political changes or imperceptible changes casued by somebody's wish to fulfil his own interests.

Mr President, these are my remarks.

SECRETARY FOR THE TREASURY (in Cantonese): Mr President, earlier on, the Secretary for Planning, Environment and Lands has explained to Members the reasons for adjusting this item of charges. I would like to appeal to Members again to think carefully what long-term impact their decisions will have on Hong Kong before deciding on whether to freeze the fees and charges.

During the debate on the increase of charges of Cargo Working Areas last Wednesday, we already explained that as far as Hong Kong's overall economy is concerned, it is not appropriate to tackle inflation or unemployment by freezing government fees and charges and neither will such measure produce any effect. I am not going to repeat these explanations and arguments here. But since several Members here highlighted the inflation problem, I would like to point out that, as we have mentioned before, the impact of the Government's annual adjustments of its fees and charges on the Consumer Price Index A is less than 0.1%. Nevertheless, Mr President, since the freezing of the various fees and charges was proposed, I have seen in discussions on various occasions as well as today's discussion that many Members as well as members of the public are supportive of the Government's "user pays" and "cost recovery" principles. We are very pleased with this indeed.

The House Committee of this Council has resolved recently that the relevant panels should study the determination of fees and charges of government services in detail. Similar proposals have also been put forward by the Honourable LAU Chin-shek and one or two other Members just now. We will be very pleased to offer detailed information and assistance to Members and the panels concerned and I also hope to take this opportunity to clarify some Members' misconceptions about the Government's criteria for determining fees and charges. This is certainly a pragmatic and forward-looking approach.

Furthermore, the Financial Secretary is now consulting Members on the revenue proposal in relation to the 1996 Budget. I hope Members will make good use of the two channels to express their views. I firmly believe this will be more useful, constructive, and beneficial to the public than taking the one-sided approach this afternoon to move the motions to freeze various fees and charges one by one.

I hope Members will have the courage to look forward and vote against this motion as well as the following 10 motions to freeze the fees and charges.

MR RONALD ARCULLI: Mr President, I do not want to labour on the history any more, but I do want to say one thing. The motion that I am moving today is not on my own behalf nor on behalf of the Liberal Party. It is a motion that was precipitated by the decision of the Subcommittee formed to examine the 154 items of subsidiary legislation, and secondly, endorsed by the House Committee. I think if it did not receive the endorsement of the House Committee, I suspect I would not be speaking here today.

Secondly, in terms of some of the comments which some of my colleagues have made, I would like to say that in terms of the freezing of the increase of charges, I repeat again as I did last week, the Government chose to freeze charges in 1991. Do not tell me that was because of inflation if it had no impact on inflation. The fact remains that it can be done, worthy of the amount of goodwill that exists. And we hear a lot of words today about partnership. I think the first lesson this Council ought to learn is amongst all 59 Members we should try and work as closely as possible and we should try and bridge the differences between our political science, if we are to be able to use at least a majority, if not a collective voice, to persuade our partners in the Government to our point of view. So, I would really ask that we restrain ourselves from too exorbitant or extravagant a sort of language when we debate points like the way we are doing. So, I am grateful that most of the colleagues who sat on the Subcommittee and their respective political parties have stuck to the position that they took at the time.

Mr President, I would not bore my colleagues any more. Thank you very much.

Question on the motion put.

Voice vote taken.

PRESIDENT: Council shall proceed to a division.

PRESIDENT: Will Members please first register their presence by pressing the top button and then proceed to cast their votes by pressing one of the three buttons below?

MR SZETO WAH (in Cantonese): Mr President, my light is not working. I have not pressed any button and yet the "Abstain" light is already on.

PRESIDENT: Press it again.

MR SZETO WAH (in Cantonese): All the lights are not working. Only the "Abstain" light is on.

PRESIDENT: Members, I will now register Mr SZETO Wah's vote. Mr SZETO Wah, what is your vote?

MR SZETO WAH (in Cantonese): I support the motion.

PRESIDENT: You are for the "Ayes". I have a total of 55 Members voting. That tallies with the head count. If I discover that the "print-out" shows that Mr SZETO Wah's vote is an abstention vote, I will have the vote corrected accordingly.

PRESIDENT: Before I declare the result, Members may wish to check their votes again.

PRESIDENT: Are there any queries? Any more queries? The result will now be displayed.

Mr Allen LEE, Mrs Selina CHOW, Mr Martin LEE, Mr NGAI Shiu-kit, Mr LAU Wong-fat, Mr Edward HO, Mr Ronald ARCULLI, Mr Miriam LAU, Mr Albert CHAN, Mr CHEUNG Man-kwong, Mr Michael HO, Dr HUANG Chen-ya, Miss Emily LAU, Mr LEE Wing-tat, Mr Fred LI, Mr Henry TANG, Mr James TO, Mr Howard YOUNG, Mr WONG Wai-yin, Mr James TIEN, Mr CHAN Kam-lam, Mr Andrew CHENG, Mr Anthony CHEUNG, Mr CHEUNG Hon-chung, Mr CHOY Kan-pui, Mr Albert HO, Mr IP Kwok-him, Mr LAW Chi-kwong, Mr LEE Kai-ming, Mr LEUNG Yiu-chung, Mr LO Suk-ching, Mr SIN Chung-kai, Mr TSANG Kin-shing and Dr John TSE voted for the motion.

Mr CHIM Pui-chung, Mr Frederick FUNG, Mr Eric LI, Dr Samuel WONG, Dr Philip WONG, Miss Christine LOH, Mr LEE Cheuk-yan, Mr CHAN Wing-chan, Miss CHAN Yuen-han, Mr Paul CHENG, Mr CHENG Yiu-tong, Mr David CHU, Mr LAU Chin-shek, Dr LAW Cheung-kwok, Mr Bruce LIU, , Mr MOK Ying-fan, Miss Margaret NG, Mrs Elizabeth WONG and Mr YUM Sin-ling voted against the motion.

Mr SZETO Wah and Mr Ambrose LAU abstained.

THE PRESIDENT announced that there were 34 votes in favour of the motion and 19 votes against it. He therefore declared that the motion was carried.

PRESIDENT: I note that there are two abstentions in the display. Normally when I declare the result, I do not declare the abstention, but since Mr SZETO Wah rose to say that he voted for the "Ayes", if the "print-out" shows that he is with the abstentions, I will have the vote corrected.

INTERPRETATION AND GENERAL CLAUSES ORDINANCE

MR RONALD ARCULLI to move the following motion:

"That the Noise Control (Air Compressors)(Amendment) Regulation 1995, published as Legal Notice No. 427 of 1995 and laid on the table of the Legislative Council on 11 October 1995, be repealed."

MR RONALD ARCULLI: Mr President, I move the motion standing in my name on the Order Paper. The motion seeks to repeal the Noise Control (Air Compressors) (Amendment) Regulation 1995 under section 34(2) of the Interpretation and General Clauses Ordinance.

The Noise Control (Air Compressors) (Amendment) Regulation 1995, published as Legal Notice No. 427 of 1995 and laid on the table of the Legislative Council on 11 October 1995, increases the fee payable for an application for a noise emission label from $120 to $145 with effect from 9 November 1995.

Mr President, in accordance with the Subcommittee's recommendation which was supported by the House Committee that the fee should remain at the existing level, I move to repeal the Regulation.

Mr President, I hope that in this particular exercise, the Government's persuasive power in lobbying does not extend to the Honourable SZETO Wah's voting machine. (Laughter)

Question on the motion proposed.

SECRETARY FOR PLANNING, ENVIRONMENT AND LANDS (in Cantonese): Mr President, the Noise Control (Air Compressors) (Amendment) Regulation 1995 seeks to adjust the fee payable for an application for a noise emission label for an air compressor. The Noise Control Ordinance requires that in using air compressors in construction work, one must apply to the Environmental Protection Department (EPD) for noise emission labels to prove that the air compressors comply with the standards laid down by the EDP. And each air compressor requires only one label.

The charging policy adopted by the Government follows the "polluter pays" principle. The present application fee for a label was determined at the price level of 1993. The increase we have proposed this time only serves to reflect the combined inflation of 1994 and 1995, and is not enough to offset the costs. According to the "polluter pays" principle, potential polluters should ensure, at their own expense, that possible impacts of their operations on the environment are minimized. The licensing system is one of the ways to ensure that such operations conform to environmental standards. For this reason, we would like to request that industries polluting the environment should shoulder the administrative costs for processing their licensing applications. Some Members indicated that fee increases would not enhance environmental protection. But I wish to point out that this is a matter of principle, that is, the polluters should pay out of their own pockets. The EDP staff have to process the applications on receiving them. If they are not required to do so, the resources can be deployed to other areas, thereby protecting our environment more directly. Indeed, if the administrative costs go up but the licensing fees are allowed to remain unchanged, we are to a certain extent subsidizing those who are producing the excessive noise.

By the same token, I with to point out to Members that even if the fees increase this time is frozen, we still cannot see how the people's livelihood can be improved. On the contrary, the freezing of the fee adjustment will once again lower the existing level of charges, thereby indirectly increasing the subsidy to polluters by the general public. Furthermore, the present increase can be said to have no impact on the applicants for noise emission labels, such as importers of air compressors and contractors of construction work. This is because the relevant trades will only incur an additional expense of $9,400 or so a year as a result of the proposed increase of $25. Compared with the operating costs of the construction work, this amount is only a drop in the ocean. Moreover, it has absolutely nothing to do with alleviating people's difficulties in their livelihood. Therefore, I hope Members will vote against this motion.

MR PAUL CHENG: Mr President, since I used English earlier in my previous comment, maybe that is why the Honourable Allen LEE did not quite get the gist of what I meant. What I said is, like my colleagues in this Council, I am also concerned about the state of economy. All I am saying is that I fail to understand how freezing these particular fees and charges under today's motion would help the economy. There must be other ways and we should choose other occasions to make the point and not under today's motions and that is what the gist of my comments were, and I hope the Honourable Allen LEE would now understand what I have said.

MR ALLEN LEE (in Cantonese): The question is not about several million dollars but freezing the price increases for a year. This has an actual bearing on inflation. If the Honourable Paul CHENG finds it difficult to understand, I will explain to him slowly after this meeting. There is no point wasting our time here.

PRESIDENT: Mr LEE, please be reminded that you should address your observations to the President.

MR JAMES TIEN (in Cantonese): Mr President, the fee increase for the type of licence the Government just mentioned is $25 for each application, which means a total of some $9,000 would be involved. Considering such a small sum of money, I hope the Government would not bluff Members by saying that if the motion was not passed today, the Government would seem to be relaxing its control and would thus fail to regulate the contractors. If the sum of money involved is really that small, I hope the Government can allocate a small percentage of money out of its huge surplus to conduct the regulatory work.

With so many fee increase proposals today, we will have plenty of opportunities indeed to speak. But I would like to comment briefly on one point. We all support what the Government termed the concept of "cost recovery". Even if it means "full cost recovery", we would fully support it too. But there is one drawback: the Government has not indicated how long it is going to take to recover all the costs. We would have a general idea if, like payments for a housing loan by instalments, the whole costs are to be recovered in 20 years, with a small allowance made for inflation each year. However, many guidelines issued by the Government recently seek to set a limit for some departments to recover full costs as soon as possible. Although we are not going to discuss other matters today, we in the export trade are aware that the export licence fee has increased from $65 in 1992 to $188 at present because obviously full costs are to be recovered in a few years' time.

What I want to point out is: in view of our sluggish economy, can the Government consider slowing down the pace of full cost recovery a little bit if it wants to stimulate our competitiveness? In doing so, the business sector would certainly operate with more ease. They could also employ more people or give their employees a small boost in wages. Thank you, Mr President.

Question on the motion put.

Voice vote taken.

THE PRESIDENT said he thought the "Ayes" had it.

DR PHILIP WONG: I claim a division.

PRESIDENT: Council shall proceed to a division.

PRESIDENT: Will Members please first register their presence by pressing the top button and then proceed to cast their votes by pressing one of the three buttons below?

PRESIDENT: Mr SZETO Wah?

MR SZETO WAH (in Cantonese): The voting system is still not working.

PRESIDENT: Mr SZETO Wah, you may register your division vote by standing up and telling me whether you have voted for the "Ayes" or the "Noes" or for the abstentions?

MR SZETO WAH (in Cantonese): I have voted for the "Ayes".

PRESIDENT: Before I declare the result, Members may wish to check their votes.

PRESIDENT: Any queries? Any further queries? The result will now be displayed.

Mr Allen LEE, Mrs Selina CHOW, Mr Martin LEE, Mr NGAI Shiu-kit, Mr LAU Wong-fat, Mr Edward HO, Mr Ronald ARCULLI, Mrs Miriam LAU, Mr Albert CHAN, Mr CHEUNG Man-kwong, Mr Michael HO, Dr HUANG Chen-ya, Miss Emily LAU, Mr LEE Wing-tat, Mr Fred LI, Mr Henry TANG, Mr James TO, Mr Howard YOUNG, Mr WONG Wai-yin, Mr James TIEN, Mr CHAN Kam-lam, Mr Andrew CHENG, Mr Anthony CHEUNG, Mr CHEUNG Hon-chung, Mr CHOY Kan-pui, Mr Albert HO, Mr IP Kwok-him, Mr LAW Chi-kwong, Mr LEE Kai-ming, Mr LEUNG Yiu-chung, Mr LO Suk-ching, Mr SIN Chung-kai, Mr TSANG Kin-shing and Dr John TSE voted for the motion.

Mr CHIM Pui-chung, Mr Frederick FUNG, Mr Eric LI, Dr Samuel WONG, Dr Philip WONG, Miss Christine LOH, Mr LEE Cheuk-yan, Mr CHAN Wing-chan, Miss CHAN Yuen-han, Mr Paul CHENG, Mr CHENG Yiu-tong, Mr David CHU, Mr LAU Chin-shek, Dr LAW Cheung-kwok, Mr Bruce LIU, Mr MOK Ying-fan, Miss Margaret NG, Mrs Elizabeth WONG and Mr YUM Sin-ling voted against the motion.

Mr SZETO Wah and Mr Ambrose LAU abstained.

THE PRESIDENT announced that there were 34 votes in favour of the motion and 19 votes against it. He therefore declared that the motion was carried.

PRESIDENT: But I have to add here that if the "print-out" shows that Mr SZETO Wah's vote is not as he wished, then the vote will be corrected accordingly.

INTERPRETATION AND GENERAL CLAUSES ORDINANCE

MR RONALD ARCULLI to move the following motion:

"That the Noise Control (Hand Held Percussive Breakers) (Amendment) Regulation 1995, published as Legal Notice No. 428 of 1995 and laid on the table of the Legislative Council on 11 October 1995, be repealed."

MR RONALD ARCULLI: Mr President, I move the motion standing in my name on the Order Paper. The motion seeks to repeal the Noise Control (Hand Held Percussive Breakers) (Amendment) Regulations 1995 under section 34(2) of the Interpretation and General Clauses Ordinance.

The Noise Control (Hand Held Percussive Breakers) (Amendment) Regulation 1995, published as Legal Notice No. 428 of 1995 and laid on the table of the Legislative Council on 11 October 1995, increases the fee payable for an application for a noise emission label from $120 to $145 with effect from 9 November 1995.

In accordance with the Subcommittee's recommendation which is supported by the House Committee that the fee should remain at the existing level, I move to repeal the Regulation.

Question on the motion proposed.

SECRETARY FOR PLANNING, ENVIRONMENT AND LANDS (in Cantonese): Mr President, the Noise Control (Hand Held Percussive Breakers) (Amendment) Regulation 1995 seeks to adjust the fee required for the application for a noise emission label.

Under the Noise Control Ordinance (let me remind Members that this piece of legislation was passed by the Legislative Council), one must apply to the Environmental Protection Department for a noise emission label prior to the use of any hand held percussive breakers to prove that these breakers meet the standard set by the Environmental Protection Department. This is to ensure that the tools used by people in the trade are up to standard. The Environmental Protection Department issues some 1 000 labels yearly. Like the noise emission label for the use of air compressors I mentioned just now, the fee adjustment for the noise emission label for hand held percussive breakers also seeks to reflect the inflation in 1994 and 1995 and the fee is far lower than the cost. The trade involved will only incur an extra expenditure of $23,600 in total each year as a result of the proposed fee increase of $25. We absolutely believe this will not have any effect on those applying for this label, such as tool importers or contractors for construction works, or Hong Kong's inflation.

Mr President, when I briefed Members of this Council on the Governor's policy address two weeks ago, I was questioned by Members as to why the Government failed to recover the cost in respect of some environmental charges and when we were going to increase such charges. While these words are still ringing in my ears, our debate today is to freeze the fee increases proposed by the Government which is only hoping to recover the increased costs brought by inflation. If these fee increases are frozen today, the fees, which are already at a very low level, will be further lowered in a relative sense. This will indirectly make the public subsidize polluters more and will also go against the "polluter pays" principle which has Members' support before (and which, I hope, still has their support). For these reasons, I urge Members to vote against this motion. ¡@

Question on the motion put.

Voice vote taken.

THE PRESIDENT said he thought the "Noes" had it.

FINANCIAL SECRETARY: Under Standing Order 4C(3), I claim a division.

PRESIDENT: Council shall proceed to a division.

PRESIDENT: Will Members please register their presence by pressing the top button and then cast their votes by pressing one of the three buttons below?

PRESIDENT: Before I declare the result, Members may wish to check their votes. I understand that Mr SZETO Wah has a query, which is the same query as for the last two divisions. I will now ask Mr SZETO Wah to rise in his place and vote by stating whether he has voted for the "Ayes" or the "Noes" or he has abstained.

MR SZETO WAH (in Cantonese): "Aye".

PRESIDENT: The result will now be displayed.

Mr Allen LEE, Mrs Selina CHOW, Mr Martin LEE, Mr LAU Wong-fat, Mr Edward HO, Mr Ronald ARCULLI, Mrs Miriam LAU, Mr Albert CHAN, Mr CHEUNG Man-kwong, Mr Michael HO, Dr HUANG Chen-ya, Miss Emily LAU, Mr LEE Wing-tat, Mr Fred LI, Mr Henry TANG, Mr James TO, Mr Howard YOUNG, Mr WONG Wai-yin, Mr James TIEN, Mr CHAN Kam-lam, Mr Andrew CHENG, Mr Anthony CHEUNG, Mr CHEUNG Hon-chung, Mr CHOY Kan-pui, Mr Albert HO, Mr IP Kwok-him, Mr LAW Chi-kwong, Mr LEE Kai-ming, Mr LEUNG Yiu-chung, Mr LO Suk-ching, Mr SIN Chung-kai, Mr TSANG Kin-shing and Dr John TSE voted for the motion.

Mr CHIM Pui-chung, Mr Frederick FUNG, Mr Eric LI, Dr Samuel WONG, Dr Philip WONG, Miss Christine LOH, Mr LEE Cheuk-yan, Mr CHAN Wing-chan, Miss CHAN Yuen-han, Mr Paul CHENG, Mr CHENG Yiu-tong, Mr David CHU, Mr LAU Chin-shek, Dr LAW Cheung-kwok, Mr Bruce LIU, Mr MOK Ying-fan, Miss Margaret NG, Mrs Elizabeth WONG and Mr YUM Sin-ling voted against the motion.

Mr SZETO Wah and Mr Ambrose LAU abstained.

THE PRESIDENT announced that there were 33 votes in favour of the motion and 19 votes against it. He therefore declared that the motion was carried.

PRESIDENT: Mr SZETO Wah's vote will be handled in a manner similar to the last two divisions.

INTERPRETATION AND GENERAL CLAUSES ORDINANCE

MR RONALD ARCULLI to move the following motion:

"That the Waste Disposal (Forms and Fees for Licences) (Amendment) Regulation 1995, published as Legal Notice No. 429 of 1995 and laid on the table of the Legislative Council on 11 October 1995, be repealed."

MR RONALD ARCULLI: Mr President, I move the motion standing in my name on the Order Paper. The motion seeks to repeal the Waste Disposal (Forms and Fees for Licenses) (Amendment) Regulation 1995 under section 34(2) of the Interpretation and General Clauses Ordinance.

The Waste Disposal (Forms and Fees for Licences) (Amendment) Regulation, published as Legal Notice No. 429 of 1995 and laid on the table of the Legislative Council on 11 October 1995, increases the fees for:

1. a waste collection licence for provision of a waste collection service or for collection of waste; and
2. a waste disposal licence for the provision of a waste disposal service or for disposal of waste.

by about 18% with effect from 9 November 1995.

In accordance with the Subcommittee's recommendation which is supported by the House Committee that the fee should remain at the existing level, I move to repeal the Regulation.

Question on the motion proposed.

SECRETARY FOR PLANNING, ENVIRONMENT AND LANDS (in Cantonese): Mr President, the Waste Disposal (Forms and Fees for Licences) (Amendment) Regulation 1995 seeks to adjust the fees payable for licences issued under the Waste Disposal Ordinance for the collection and disposal of wastes.

The licensing system is the main regulatory measure provided under the Waste Disposal Ordinance. It requires that, for the sake of public safety, those who collect and dispose of wastes must apply for a licence and comply with the licensing requirements on the proper disposal of wastes. At present, waste collection licence applicants are mainly those who collect chemical wastes and used mineral oils. And, applicants for waste disposal licences include those who operate workshops that process chemical wastes, extract precious metals from electroplating solutions and recycle used lubricating oils. The valid period for a licence issued for the first time is one year, and that of a renewed licence is two years. Therefore, licence holders are not required to renew their licences every year. Under the relevant policy of the Government, the fees charged are normally set at levels sufficient to recover the full costs of the services provided.

The existing fees were set at the cost levels of 1993, and the proposed rate of increase, being 17.8%, is intended merely to reflect the inflation in 1994 and 1995. The Government estimates that about 70 licences will have to be issued in this fiscal year, and this will bring about a total income of $700,000 approximately. After adjusting the fees, the increases for individual licences will range from $300 to $3,000, and the trade concerned as a whole needs only to pay $125,000 more a year. We think this is really an insignificant increase that will have no impact on these operators, let alone members of the public. Should the fees remain at the existing levels, the Government will have to subsidize the licence holders of these commercial activities through other sources of revenue. This is unfair to other taxpayers. Moreover, according to the "polluter pays" principle, anyone whose activities may cause pollution should pay his own share of the costs spent on guarding the environment against the possible impacts caused by his activities. Therefore, I hope that Members will reconsider our fee increase proposal and oppose the motion.

Question on the motion put.

Voice vote taken.

THE PRESIDENT said he thought the "Ayes" had it.

The Financial Secretary and Dr Philip WONG claimed a division.

PRESIDENT: Council shall proceed to a division.

PRESIDENT: Mr Allen Lee.

MR ALLEN LEE: Mr President, I just want to clarify one point. Can the Financial Secretary who is not a Member of this Council claim a division?

PRESIDENT: Mr LEE, the answer is yes, but I have to look up the right Standing Order. Standing Order 4C(3), "Subject to clause XXIB(2) of the Royal Instructions, the Chief Secretary, the Financial Secretary and the Attorney General may attend any sitting of the Council, committees of the whole Council and other committees and subcommittees, and when attending sittings of the Council or committees of the whole Council, these Standing Orders, except Standing Orders Nos. 1 (Oath or Affirmation), 3 (Presiding in Council and in Committee of the Whole Council), 4AA (Attendance of the Governor), 4B (Attendance of Public Officers), 6(1) (Proceedings at First Sitting of Session), 10 (Quorum), 13 (Presentation of Petitions), and the Standing Orders in Part J (Voting), shall apply to them as they apply to a Member.".

In short, apart from the more technical provisions, the Chief Secretary, the Financial Secretary, the Attorney General and public officers designated by the Government to attend sittings can speak on any motion and on any question but cannot vote on the questions.

PRESIDENT: Will Members first register their presence by pressing the top button and then cast their votes by pressing one of the three buttons below?

PRESIDENT: Before I declare the result, Members may wish to check their votes and I am given to understand that Mr SZETO Wah has a similar problem to the last three divisions. Mr Szeto Wah, how do you vote?

MR SZETO WAH (in Cantonese): I vote for the "Ayes".

PRESIDENT: Mr SZETO Wah's vote will be recorded and checked against the "print-out". If the "print-out" shows the wrong vote, then the "print-out" will be corrected accordingly.

PRESIDENT: The result will now be displayed.

Mr Allen LEE, Mrs Selina CHOW, Mr Martin LEE, Mr LAU Wong-fat, Mr Edward HO, Mr Ronald ARCULLI, Mrs Miriam LAU, Mr Albert CHAN, Mr CHEUNG Man-kwong, Mr Michael HO, Dr HUANG Chen-ya, Miss Emily LAU, Mr LEE Wing-tat, Mr Fred LI, Mr Henry TANG, Mr James TO, Mr Howard YOUNG, Mr WONG Wai-yin, Mr James TIEN, Mr CHAN Kam-lam, Mr Andrew CHENG, Mr Anthony CHEUNG, Mr CHEUNG Hon-chung, Mr CHOY Kan-pui, Mr HO Chun-yan, Mr IP Kwok-him, Mr LAW Chi-kwong, Mr LEE Kai-ming, Mr LEUNG Yiu-chung, Mr LO Suk-ching, Mr SIN Chung-kai, Mr TSANG Kin-shing and Dr John TSE voted for the motion.

Mr CHIM Pui-chung, Mr Frederick FUNG, Mr Eric LI, Dr Samuel WONG, Dr Philip WONG, Miss Christine LOH, Mr LEE Cheuk-yan, Mr CHAN Wing-chan, Miss CHAN Yuen-han, Mr Paul CHENG, Mr CHENG Yiu-tong, Mr David CHU, Mr LAU Chin-shek, Dr LAW Cheung-kwok, Mr Bruce LIU, Mr MOK Ying-fan, Miss Margaret NG, Mrs Elizabeth WONG and Mr YUM Sin-ling voted against the motion.

Mr SZETO Wah and Mr Ambrose LAU abstained.

THE PRESIDENT announced that there were 33 votes in favour of the motion and 19 votes against it. He therefore declared that the motion was carried.

PRESIDENT: Mr Edward HO.

MR EDWARD HO: A point of order. Mr President, when you gave the explanation to Mr Allen LEE on the Standing Orders whether government officials can seek a division, you referred to 4C(3) and I believe that under that provision, the Standing Orders in Part J (Voting) actually are included as exceptions. In other words, apart from those exceptions, they can do things that Members can do. So if you look at Part J, the matter of asking for divisions is in 36(4) and therefore I believe that government officials do not have the right to claim divisions. I now seek your clarification, Mr President.

16.46 pm

PRESIDENT: I will take a break.

17.30 pm

PRESIDENT: Members, Mr Allen LEE and Mr Edward HO were entirely correct in reading Standing Order 4C(2) and Standing Order 4C(3) to mean that all public officers including the Chief Secretary, the Financial Secretary and the Attorney General are not permitted to claim divisions. This is because reference to Part J includes all Standing Orders in Part J, and certainly Standing Order 36(4). This again is a most anomalous situation as it would only be fair to allow all those who had taken part in the deliberations to claim a division so as to have the votes recorded. But Members, my hands are tied. I will have to declare the division invalid.

Members, the division on the fourth motion was claimed by Dr Philip WONG and was voted. Although there were other Members who indicated their wish to claim a division on the third motion, that division was in fact claimed by the Financial Secretary. The division is hereby ruled invalid. Members will recall that before we proceeded to the division on the third motion, I said "I think the "Noes" have it". We will now take it up from there. In other words, Members who wish to claim a division on the third motion, that is, the motion on Noise Control (Hand Held Percussive Breakers) (Amendment) Regulation 1995, will have to so do immediately after I repeat "I think the "Noes" have it".

PRESIDENT: I think the "Noes" have it.

MR RONALD ARCULLI: Mr President, I claim a division.

PRESIDENT: Council shall proceed to a division.

PRESIDENT: May I remind Members that the division is on the third motion, that is, Noise Control (Hand Held Percussive Breakers) (Amendment) Regulation 1995. Will Members please register their presence by pressing the top button and then cast their votes by pressing one of the three buttons below?

PRESIDENT: We are one short of the head count. Before I declare the result, Members may wish to check their votes.

PRESIDENT: Are there any queries? The result will now be displayed.

Mr Allen LEE, Mrs Selina CHOW, Mr Martin LEE, Mr NGAI Shiu-kit, Mr SZETO Wah, Mr LAU Wong-fat, Mr Edward HO, Mr Ronald ARCULLI, Mrs Miriam LAU, Mr Albert CHAN, Mr CHEUNG Man-kwong, Mr Michael HO, Dr HUANG Chen-ya, Miss Emily LAU, Mr LEE Wing-tat, Mr Fred LI, Mr Henry TANG, Mr James TO, Dr YEUNG Sum, Mr Howard YOUNG, Mr WONG Wai-yin, Mr James TIEN, Mr CHAN Kam-lam, Mr Andrew CHENG, Mr Anthony CHEUNG, Mr CHEUNG Hon-chung, Mr CHOY Kan-pui, Mr Albert HO, Mr IP Kwok-him, Mr LAW Chi-kwong, Mr LEE Kai-ming, Mr LEUNG Yiu-chung, Mr SIN Chung-kai, Mr TSANG Kin-shing and Dr John TSE voted for the motion.

Mr CHIM Pui-chung, Mr Frederick FUNG, Dr Samuel WONG, Dr Philip WONG, Miss Christine LOH, Mr LEE Cheuk-yan, Mr CHAN Wing-chan, Miss CHAN Yuen-han, Mr Paul CHENG, Mr CHENG Yiu-tong, Mr David CHU, Mr LAU Chin-shek, Dr LAW Cheung-kwok, Mr Bruce LIU, Mr MOK Ying-fan, Miss Margaret NG, Mrs Elizabeth WONG and Mr YUM Sin-ling voted against the motion.

Mr Ambrose LAU abstained.

THE PRESIDENT announced that there were 35 votes in favour of the motion and 18 votes against it. He therefore declared that the motion was carried.

INTERPRETATION AND GENERAL CLAUSES ORDINANCE

MR RONALD ARCULLI to move the following motion:

"That the Waste Disposal (Chemical Waste)(General)(Amendment) Regulation 1995, published as Legal Notice No. 430 of 1995 and laid on the table of the Legislative Council on 11 October 1995, be repealed."

MR RONALD ARCULLI: Mr President, I move the motion standing in my name on the Order Paper. The motion seeks to repeal the Waste Disposal (Chemical Waste) (General) (Amendment) Regulation 1995 under section 34(2) of the Interpretation and General Clauses Ordinance.

The Waste Disposal (Chemical Waste) (General) (Amendment) Regulation 1995, published under Legal Notice No. 430 of 1995 and laid on the table of the Legislative Council on 11 October 1995, increases the fees for the registration of a chemical waste producer and for a certified copy of an entry of the registration in the register by about 18% with effect from 9 November 1995.

In accordance with the Subcommittee's recommendation which is supported by the House Committee that the fees should remain at the existing level, I move to repeal the Regulation.

Question on the motion proposed.

SECRETARY FOR PLANNING, ENVIRONMENT AND LANDS (in Cantonese): Mr President, apart from the waste disposal licence and waste collection licence I have just mentioned, the Waste Disposal Ordinance also requires all chemical waste producers to register with the Environmental Protection Department so as to facilitate Government regulation and ensure public safety. Some examples of such chemical waste producers are the manufacturers engaged in electroplating and the production of printed circuit boards, as well as operators of garages and so on.

The current level of registration fee for chemical waste producers was set at the cost levels of 1993. The increase we are now proposing is 17.8%, which is intended to reflect the inflation in 1994 and 1995. Adjusting the registration fee will not affect chemical waste producers who have already registered because registration is one-off and requires no renewal.

The Government estimates that about 450 new producers of chemical waste will be required to register in this fiscal year. We believe that a one-off registration fee of $285 will not affect the operating costs of chemical waste producers. As I have just said, should the fee remain at the existing level, the Government would have to subsidize chemical waste producers by drawing funds from other sources of revenue, which is unfair to other taxpayers. Moreover, according to the "polluter pays" principle, all potential producers of pollution should pay their own shares of the costs of guarding against or reducing the possible impact their activities will have on the environment. Therefore, I hope that Members will reconsider our fee increase proposal and vote against the motion.

Question on the motion put.

Voice vote taken.

THE PRESIDENT said he thought the "Ayes" had it.

DR PHILIP WONG: I claim a division.

PRESIDENT: Council shall proceed to a division.

PRESIDENT: Will Members please register their presence by pressing the top button and then cast their votes by pressing one of the three buttons below?

PRESIDENT: We are one short of the head count.

PRESIDENT: We are still one short of the head count. All Members present have voted. Before I declare the result, Members may wish to check their votes.

PRESIDENT: Are there any queries? The result will now be displayed.

Mr Allen LEE, Mrs Selina CHOW, Mr Martin LEE, Mr NGAI Shiu-kit, Mr SZETO Wah, Mr LAU Wong-fat, Mr Edward HO, Mr Ronald ARCULLI, Mrs Miriam LAU, Mr Albert CHAN, Mr CHEUNG Man-kwong, Mr Michael HO, Dr HUANG Chen-ya, Miss Emily LAU, Mr LEE Wing-tat, Mr Fred LI, Mr Henry TANG, Mr James TO, Dr YEUNG Sum, Mr Howard YOUNG, Mr WONG Wai-yin, Mr James TIEN, Mr CHAN Kam-lam, Mr Andrew CHENG, Mr Anthony CHEUNG, Mr CHEUNG Hon-chung, Mr CHOY Kan-pui, Mr HO Chun-yan, Mr IP Kwok-him, Mr LAW Chi-kwong, Mr LEE Kai-ming, Mr LEUNG Yiu-chung, Mr SIN Chung-kai, Mr TSANG Kin-shing and Dr John TSE voted for the motion.

Mr CHIM Pui-chung, Mr Frederick FUNG, Dr Samuel WONG, Dr Philip WONG, Miss Christine LOH, Mr LEE Cheuk-yan, Mr CHAN Wing-chan, Miss CHAN Yuen-han, Mr Paul CHENG, Mr CHENG Yiu-tong, Mr David CHU, Mr LAU Chin-shek, Mr Bruce LIU, Mr MOK Ying-fan, Miss Margaret NG, Mrs Elizabeth WONG and Mr YUM Sin-ling voted against the motion.

Mr Ambrose LAU abstained.

THE PRESIDENT announced that there were 35 votes in favour of the motion and 17 votes against it. He therefore declared that the motion was carried.

INTERPRETATION AND GENERAL CLAUSES ORDINANCE

MR RONALD ARCULLI to move the following motion:

"That the Water Pollution Control (General) (Amendment) Regulation 1995, published as Legal Notice No. 431 of 1995 and laid on the table of the Legislative Council on 11 October 1995, be repealed."

MR RONALD ARCULLI: Mr President, I move the motion standing in my name on the Order Paper. The motion seeks to repeal the Water Pollution Control (General) (Amendment) Regulation 1995 under section 34(2) of the Interpretation and General Clauses Ordinance.

The Water Pollution Control (General) (Amendment) Regulation 1995, published as Legal Notice No. 431 of 1995; and laid on the table of the Legislative Council on 11 October 1995, increases the fees for issue of licences under the Water Pollution Control Ordinance by about 59% with effect from 9 November 1995 to cover increases in costs since the last revision in November 1990.

In accordance with the Subcommittee's recommendation which is supported by the House Committee that the fees should remain at the existing level, I move to repeal the Regulation.

Question on the motion proposed.

SECRETARY FOR PLANNING, ENVIRONMENT AND LANDS (in Cantonese): Mr President, the Water Pollution Control (General) (Amendment) Regulation seeks to adjust the fees payable for licence issuance and renewal under the Water Pollution Control Ordinance.

As we all know, the waters of Hong Kong are divided into several water control zones under the Water Pollution Control Ordinance. All industrial, institutional or commercial polluters in each water control zone must apply to the Environmental Protection Department for appropriate licences for their discharges or deposits. This licensing requirement aims to ensure that the effluents discharged anywhere in Hong Kong can comply with the water quality indexes and standards set down for their respective water control zones. In this way, the quality of Hong Kong waters can be prevented from further deteriorating and public health can be protected. In the course of processing such licence applications, the staff of the Environmental Protection Department often need to conduct site visits and other investigations to check the specific details of individual applicants before issuing the licences applied for. The licensing fees now payable under the Ordinance are just for the purpose of defraying the administrative costs involved.

The various licensing fees now payable were introduced in 1987 on a nominal basis. They were last adjusted in November 1990, that is, about five years ago. Our proposed rate of increase this time aims to take account of the effects of inflation over the past few years. Although the rate proposed is nearly 60%, most applicants will need to pay only $300 more in actual money terms. It is estimated that in 1995-96, 6 600 applicants will have to pay the new fees for new licences or renewals. It should be added that the Government still need to give a subsidy ranging from 30% to 80% to each of the applicants even when the fees are adjusted as proposed. In other words, the new fees still cannot cover all the licensing costs incurred by the Government, which means that other tax-payers will still have to subsidize the licensing fees payable by industrial and commercial polluters.

Many Members of this Council, including the Honourable Ronald ARCULLI, who moves the motion today, have been stressing their support for the "polluter pays" principle on different occasions. However, when the Government proposes that polluters should discharge their social obligation to a more appropriate extent, these Members suddenly want to change their long-avowed position. They now want to lessen the responsibility shouldered by polluters, and shift the burden of the costs to the general public. I think this is extremely inappropriate. We believe that Members should have learnt from public opinions and the media that the community in general do not find their arguments at all acceptable. I hope Members will give the matter a second thought.

Furthermore, each of these licences is valid for a period of two years. Now let us look at the example of domestic sewage treatment plants, such as the one installed at Fair View Park, for which a higher rate of increase is proposed. In this case, the licensing fee will be adjusted upward from $3,000 to $4,750, which means an increase of $1,750. For a plant worth several hundred thousand dollars, a mere increase of some $1,000 spread over a two-year period will not, in any case, affect its operation, let alone the interests of consumers. So, contrary to what Members would think, freezing the fee increases obviously will not lower the cost of living index. I believe most Members are discerning enough to see this point.

Finally, on the issue of environmental protection, I urge Members not to back-pedal by focusing on the trivial but neglecting the significant. If they do so, they will fail the general public in the area of environmental improvement and protection. We should work together wholeheartedly to fully implement the "polluter pays" principle. I hope Members will vote against this motion.

DR HUANG CHEN-YA (in Cantonese): Mr President, the only thing I want to point out is that no adjustment whatsoever has been made to all the fees in question since 1991. In fact, the Government gave up $1.65 million worth of fees as a result of this holding back of fee adjustment from 1991 to last year; in other words, the Government has been freezing its fees and charges for four years. Why has the Government itself frozen its fees and charges without informing the Legislative Council? Why are the public not told the reasons? Why is it that the Government considers it a matter of course to freeze charges when it chooses to? Why, then, does the Government start to come up with so many arguments when we demand that charges should be frozen for the sake of inflation? Therefore, I do not think it is a question of whether or not charges can be frozen, nor is it a question of finances. Instead, the Government simply thinks that an executive-led system is most important, and whenever it feels like freezing charges, it freezes charges. Suppose the Legislative Council said "no" to the freezing of charges, the Government would say something contrary.

MR ALBERT CHAN (in Cantonese): Mr President, I just want to respond briefly to the question of environmental protection measures and message mentioned by the Secretary for Planning, Environment and Lands just now.

I have just pointed out that the whole fee increase proposal has nothing whatsoever to do with environmental protection. However, the Government has kept on orchestrating a campaign of opinions about the relevance of fee increases to environmental protection, as illustrated by the papers presented to Members on the issue. If the Government is really that concerned about environmental protection, and if it really wants to control environmental pollution through licensing, then, for many polluting activities, linking their licence fees or noise permit fees to rising inflation simply will not serve the purpose. Instead, punitive pollution charges should be added to the fees payable. If, for example, as much as $100,000, $200,000 or even $1 million is charged for a permit for percussive piling outside designated hours, we can then say that a genuine environmental protection measure is being adopted. Now, for works projects which often cost hundreds of millions of dollars each, the Government is merely seeking nominal fee increases amounting to a few hundred or sometimes even less than a hundred dollars. I think it is very irresponsible of the Government to mislead members of the public and the Legislative Council again and again with such reasoning. I hope that when dealing with this issue, the Government can present the figures objectively instead of fooling the public with this sort of utterances.

Question on the motion put.

Voice vote taken.

THE PRESIDENT said he thought the "Ayes" had it.

DR PHILIP WONG: I claim a division.

PRESIDENT: Council shall proceed to a division.

PRESIDENT: Will Members please register their presence by pressing the top button and then proceed to vote by pressing one of the three buttons below?

PRESIDENT: Before I declare the result, Members may wish to check their votes.

PRESIDENT: Are there any queries? The result will now be displayed.

Mr Allen LEE, Mrs Selina CHOW, Mr Martin LEE, Mr NGAI Shiu-kit, Mr SZETO Wah, Mr LAU Wong-fat, Mr Edward HO, Mr Ronald ARCULLI, Mrs Miriam LAU, Mr Albert CHAN, Mr CHEUNG Man-kwong, Mr Michael HO, Dr HUANG Chen-ya, Miss Emily LAU, Mr LEE Wing-tat, Mr Fred LI, Mr Henry TANG, Mr James TO, Dr YEUNG Sum, Mr Howard YOUNG, Mr WONG Wai-yin, Mr James TIEN, Mr CHAN Kam-lam, Mr CHAN Wing-chan, Miss CHAN Yuen-han, Mr Andrew CHENG, Mr CHENG Yiu-tong, Mr Anthony CHEUNG, Mr CHEUNG Hon-chung, Mr Albert HO, Mr IP Kwok-him, Mr LAW Chi-kwong, Mr LEE Kai-ming, Mr LEUNG Yiu-chung, Mr SIN Chung-kai, Mr TSANG Kin-shing and Dr John TSE voted for the motion.

Mr CHIM Pui-chung, Mr Frederick FUNG, Dr Samuel WONG, Dr Philip WONG, Miss Christine LOH, Mr LEE Cheuk-yan, Mr Paul CHENG, Mr David CHU, Mr LAU Chin-shek, Mr Bruce LIU, Mr MOK Ying-fan, Miss Margaret NG, Mrs Elizabeth WONG and Mr YUM Sin-ling voted against the motion.

Mr Ambrose LAU abstained.

THE PRESIDENT announced that there were 37 votes in favour of the motion and 14 votes against it. He therefore declared that the motion was carried.

INTERPRETATION AND GENERAL CLAUSES ORDINANCE

MR RONALD ARCULLI to move the following motion:

"That the Air Pollution Control (Specified Processes) (Amendment) Regulation 1995, published as Legal Notice No. 432 of 1995 and laid on the table of the Legislative Council on 11 October 1995, be repealed."

MR RONALD ARCULLI: Mr President, I move the motion standing in my name on the Order Paper. The motion seeks to repeal the Air Pollution Control (Specified Processes) (Amendment) Regulation 1995 under section 34(2) of the Interpretation and General Clauses Ordinance.

The Air Pollution Control (Specified Processes) (Amendment) Regulation 1995, published as Legal Notice No. 432 of 1995 and laid on the table of the Legislative Council on 11 October 1995, increases the fees payable for licences for conducting a specified process by about 18% with effect from 9 November 1995.

In accordance with the Subcommittee's recommendation which is supported by the House Committee that the fees should remain at the existing levels, I move to repeal the Regulation.

Question on the motion proposed.

SECRETARY FOR PLANNING, ENVIRONMENT AND LANDS (in Cantonese): Mr President, the Air Pollution Control (Specified Processes) (Amendment) Regulation 1995 seeks to adjust the licence fees for a number of specified processes. The Air Pollution Control (Specified Processes) Regulation sets out a total of 31 items of works that are prejudicial to air quality, such as incinerator works, chemical works and gas works. Through the licensing system, the Environmental Protection Department (EPD) can regulate the day-to-day operations of these works, with a view to abating the nuisance they cause to their neighbourhoods as well as the adverse impact they produce on air quality.

This year, the EPD will issue about 140 such licences, which are subject to renewal every two years. The licensing system enables the EPD to monitor the conduct of these specified processes and to effectively enforce measures aimed at improving air quality. The current fee of $190, set in 1993 at the price levels of the time, is just a nominal fee which can recover only a small portion of the administrative costs incurred as a result of issuing the licences concerned. The proposed rate of increase aims merely to reflect the inflation rate of 17.8% in 1994 and 1995. The new fee of $225 we now propose is still far below the costs involved.

Although the proposed rate of increase will only produce very insignificant financial implications, rejection of it will inevitably mean more Government subsidy for licence application fees related to specified processes. This is against the "polluters pays" principle, which Members once vowed to support. What is more, given the proposed rate of adjustment, the biggest fee increase in actual money terms will just be $35. Such an amount will not in any case affect the trades concerned, let alone worsen the problem of unemployment. It should also be borne in mind that it is not members of the public, but the producers of air pollution who are going to be affected by this adjustment of fees. There is no reason whatsoever why members of the public should increase their subsidy for such polluting works. I hope that Members will reconsider our fee increase proposal and vote against this motion.

Question on the motion put.

Voice vote taken.

THE PRESIDENT said he thought the "Ayes" had it.

DR PHILIP WONG: I claim a division.

PRESIDENT: Council shall proceed to a division.

PRESIDENT: Will Members please proceed to vote?

PRESIDENT: Before I declare the result, Members may wish to check their votes.

PRESIDENT: Are there any queries? The result will now be displayed.

Mr Allen LEE, Mrs Selina CHOW, Mr Martin LEE, Mr NGAI Shiu-kit, Mr SZETO Wah, Mr LAU Wong-fat, Mr Edward HO, Mr Ronald ARCULLI, Mrs Miriam LAU, Mr Albert CHAN, Mr CHEUNG Man-kwong, Mr Michael HO, Dr HUANG Chen-ya, Miss Emily LAU, Mr LEE Wing-tat, Mr Fred LI, Mr Henry TANG, Mr James TO, Dr YEUNG Sum, Mr Howard YOUNG, Mr WONG Wai-yin, Mr James TIEN, Mr CHAN Kam-lam, Mr Andrew CHENG, Mr Anthony CHEUNG, Mr CHEUNG Hon-chung, Mr Albert HO, Mr IP Kwok-him, Mr LAW Chi-kwong, Mr LEE Kai-ming, Mr LEUNG Yiu-chung, Mr LO Suk-ching, Mr SIN Chung-kai, Mr TSANG Kin-shing and Dr John TSE voted for the motion.

Mr CHIM Pui-chung, Mr Frederick FUNG, Dr Samuel WONG, Dr Philip WONG, Miss Christine LOH, Mr LEE Cheuk-yan, Mr CHAN Wing-chan, Miss CHAN Yuen-han, Mr Paul CHENG, Mr CHENG Yiu-tong, Mr David CHU, Mr LAU Chin-shek, Dr LAW Cheung-kwok, Mr Bruce LIU, Mr MOK Ying-fan, Miss Margaret NG, Mrs Elizabeth WONG and Mr YUM Sin-ling voted against the motion.

Mr Ambrose LAU abstained.

THE PRESIDENT announced that there were 35 votes in favour of the motion and 18 votes against it. He therefore declared that the motion was carried.

INTERPRETATION AND GENERAL CLAUSES ORDINANCE

MR RONALD ARCULLI to move the following motion:

"That the Road Traffic Ordinance (Amendment of Schedule 10) Order 1995, published as Legal Notice No. 433 of 1995 and laid on the table of the Legislative Council on 11 October 1995, be repealed."

MR RONALD ARCULLI: Mr President, I move the motion standing in my name on the Order Paper. The motion seeks to repeal the Road Traffic Ordinance (Amendment of Schedule 10) Order 1995 under section 34(2) of the Interpretation and General Clauses Ordinance.

The Road Traffic Ordinance (Amendment of Schedule 10) Order 1995 published as Legal Notice No. 433 of 1995 and laid on the table of the Legislative Council on 11 October 1995, increases the fees payable for designation or renewal of designation of a place as a vehicle emission testing centre, and for supply of form of certificate of compliance for the testing of motor vehicles by about 18% with effect from 9 November 1995.

In accordance with the Subcommittee's recommendation which is supported by the House Committee that the fees should remain at the existing level, I move to repeal the Order.

Question on the motion proposed.

SECRETARY FOR PLANNING, ENVIRONMENT AND LANDS (in Cantonese): Mr President, the Road Traffic Ordinance (Amendment of Schedule 10) Order 1995 seeks to adjust the fees payable for designation of a place as a Vehicle Emission Testing Centre, for conducting a vehicle emission test and for supply of form of certificate of compliance for the testing of motor vehicles.

Vehicles lacking proper maintenance emits irritating dark smoke which pollutes the air. According to existing legislation, accredited persons of the Environmental Protection Department (EPD) are authorized to spot and report vehicles emitting dark smoke on the roads. The owners of the vehicles concerned have to present their vehicles at designated Vehicle Emission Testing Centres for examination as instructed by the EPD. If a vehicle can pass the examination, it will be issued an Emission Compliance Certificate. A vehicle failing to obtain the certificate will be liable to licence suspension.

In order to ensure that the conduct of vehicle examinations can meet the required statutory standards, only designated Vehicle Emission Testing Centres are authorized to issue Emission Compliance Certificates. The designation or renewal of designation of a place as a testing centre is subject to the EPD's approval upon receipt of the relevant application and the fees required. A designated testing centre has to apply for renewal of designation every three years. At present, there are 18 designated Vehicle Emission Testing Centres in total. The application fees payable by these testing centres can be wholly recovered through the charging of vehicle testing fees.

Vehicles spotted and reported to be emitting dark smoke are required to receive proper repair before being presented at designated testing centres for examination. Statutory vehicle testing fees are payable for the purpose and the Government will also recover the costs of supplying forms of Emission Compliance Certificates from designated vehicle testing centres. One point I must clarify here is that people who are authorized to spot and report vehicles for dark emission have all been trained and accredited by the EPD as Spotters. Vehicles spotted and reported to be emitting dark smoke are mainly those lacking maintenance. Properly maintained vehicles will not be affected, and need not undergo any vehicle examination.

The proposed fee increases for vehicle examinations aim to prevent vehicles lacking proper maintenance from continuing to pollute our air. Since such fee increases will affect only those vehicles with excessive dark emission, and the fees payable for vehicle examination can actually be avoided by proper maintenance, they will not affect the people's livelihood.

Once after being reported by a Spotter, the owner of a vehicle emitting dark smoke is required, first, to make his own arrangement for proper vehicle maintenance and, second, to present his vehicle at a designated vehicle testing centre for examination. After maintenance and repair, most vehicles can usually pass the examination. In the case of an alleged wrongful accusation of dark smoke emission, the vehicle owner concerned can take his vehicle to a testing centre of the EPD for examination free of charge. I would like to add that according to past records, it was not unusual that many of the spotted vehicles had in fact been spotted more than once by different Spotters at different times.

The charging policy of the Government is generally based on the "user pays" principle, under which fees are set at levels sufficient for the purpose of recovering the costs of providing the services concerned. In the case of fees and charges serving the primary aim of improving the environment, the "polluter pays" principle is applied in addition. The existing fees payable for designation of a place as a Vehicle Emission Testing Centre and for vehicle examination, being $1,205 and $170 respectively, were set at the cost levels of 1993. The proposed fee increases simply seek to reflect the inflation rate of 17.8% in 1994 and 1995. Besides, our proposed vehicle examination fee is just $200, far lower than the $330 proposed by testing centres to the Government. We now handle six applications for designation or renewal of designation of a place as a Vehicle Emission Testing Centre and issue 44 000 Emission Compliance Certificates each year. Using this as a basis of calculations, we can project that the proposed fee levels will only bring about an additional expenditure of around $142,000 to the entire trade.

A couple of days ago, quite a number of Members endorsed the freezing of government fees and charges for reasons of the current state of the economy and the need to protect the existing living standard of the public. However, I must emphasize that the proposed fee increases this time are different in nature from other kinds of charges. Those who are going to be affected are not the general public, but the air polluters, that is, the owners of poorly-maintained vehicles that emit annoying dark smoke. If the Government does not seek to recover a reasonable amount of administration cost from these polluters, it will in fact be indirectly passing the financial burden in question to the general public who themselves are already victims of air pollution. This will be tantamount to encouraging the polluters, in financial terms, to keep on causing damage to the environment. This is hardly in line with social justice and, I believe, will not receive the concurrence of the general public.

Furthermore, the fee adjustments this time are extremely mild. They will not produce any negative impact on our economy, let alone aggravate the unemployment problem. Therefore, the endorsement of the Legislative Council will not run counter to the well-intentioned purpose of Members to protect the people's living standard.

In case the fee adjustments are not endorsed by this Council, continuation of the existing fee levels may render designated testing centres unable to continue their operation, or may at least make it difficult for them to sustain themselves economically. In other words, the existing testing work on vehicles emitting dark smoke, conducted with the aim of improving air quality, may also be affected, thus victimizing the public.

Mr President, I hope that Members will reconsider our fee increase proposals and vote against this motion.

Question on the motion put.

Voice vote taken.

THE PRESIDENT said he thought the "Ayes" had it.

Dr Samuel WONG claimed a division.

PRESIDENT: Council shall proceed to a division.

PRESIDENT: Will Members please proceed to vote?

PRESIDENT: Before I declare the result, Members may wish to check their votes.

PRESIDENT: Are there any queries? The result will now be displayed.

Mr Allen LEE, Mrs Selina CHOW, Mr Martin LEE, Mr NGAI Shiu-kit, Mr SZETO Wah, Mr LAU Wong-fat, Mr Edward HO, Mr Ronald ARCULLI, Mrs Miriam LAU, Mr Albert CHAN, Mr CHEUNG Man-kwong, Mr Frederick FUNG, Mr Michael HO, Dr HUANG Chen-ya, Miss Emily LAU, Mr LEE Wing-tat, Mr Fred LI, Mr Henry TANG, Mr James TO, Dr YEUNG Sum, Mr Howard YOUNG, Mr WONG Wai-yin, Mr James TIEN, Mr LEE Cheuk-yan, Mr CHAN Kam-lam, Mr CHAN Wing-chan, Miss CHAN Yuen-han, Mr Andrew CHENG, Mr CHENG Yiu-tong, Mr Anthony CHEUNG, Mr CHEUNG Hon-chung, Mr Albert HO, Mr IP Kwok-him, Mr LAU Chin-shek, Dr LAW Cheung-kwok, Mr LAW Chi-kwong, Mr LEE Kai-ming, Mr LEUNG Yiu-chung, Mr Bruce LIU, Mr MOK Ying-fan, Mr SIN Chung-kai, Mr TSANG Kin-shing, Mr John TSE and Mr YUM Sin-ling voted for the motion.

Mr CHIM Pui-chung, Dr Samuel WONG, Dr Philip WONG, Miss Christine LOH, Mr Paul CHENG, Mr David CHU, Mr LO Suk-ching, Miss Margaret NG and Mrs Elizabeth WONG voted against the motion.

Mr Ambrose LAU abstained.

THE PRESIDENT announced that there were 44 votes in favour of the motion and nine votes against it. He therefore declared that the motion was carried.

INTERPRETATION AND GENERAL CLAUSES ORDINANCE

MR RONALD ARCULLI to move the following motion:

"That the Dumping at Sea (Fees) Regulation, published as Legal Notice No. 434 of 1995 and laid on the table of the Legislative Council on 11 October 1995, be repealed."

MR RONALD ARCULLI: Mr President, I move the motion standing in my name on the Order Paper. The motion seeks to repeal the Dumping at Sea (fees) Regulation under section 34(2) of the Interpretation and General Clauses Ordinance.

The Dumping at Sea (Fees) Regulation, published as Legal Notice No. 434 of 1995 and laid on the table of the Legislative Council on 11 October 1995, increases the fees payable for a permit to load for dumping and to dump spoil or sewage sludge and substances or articles other than spoil or sewage sludge by about 18% and to set a new fee for a copy of an entry in the register compiled by the Authority with effect from 9 November 1995.

In accordance with the Subcommittee's recommendation which is supported by the House Committee that the fees should remain at the existing levels, I move to repeal the Regulation.

Question on the motion proposed.

SECRETARY FOR PLANNING, ENVIRONMENT AND LANDS (in Cantonese): Mr President, the Dumping at Sea Ordinance regulates, by means of issuing permits, the dumping of waste at sea and prohibits anyone from carrying out any dumping activities at sea before obtaining a permit. In deciding whether a permit should be issued, the Environmental Protection Department (EPD) has to consider the impact these activities may have on the marine environment and biological resources, and ensure that such impact will be acceptable and minimized. Those who apply for the permits are mainly contractors for the sludge dredging and dumping works. Validity of the permits ranges from the month to six months.

The Dumping at Sea Ordinance also requires the Director of the EPD to compile a register for entering the details of the permits issues. The Director should provide this register for public inspection free of charge, and to furnish a copy of an entry in the register to any person who has paid the prescribed fee.

The current fees level for issuing the permits was determined in accordance with the costs of 1993. The proposed increase this time is 17.8%, which is to reflect the inflation of 1994 and 1995. The fee for a copy is set at $150, which is the same as similar charges. It is estimated that there will be about 120 applications for the permits for this fiscal year, bringing in a total revenue of $1.5 million. After the adjustment, people in the trade will have to pay an additional $1,300 for each permit, with $2,700 being the maximum extra payment. The extra expenditure incurred by the trade as a whole will be $270,000. For the people in the trade, the permit fees constitute only a minimal proportion of their operating costs. Therefore, we believe the fee adjustment will not have a great impact on the trade concerned, and will not affect the general public.

Should the fees remain at the existing level, the Government will have to subsidize the people engaged in this type of commercial activities out of other revenue sources, which is unfair to other taxpayers. Moreover, according to the "polluter pays" principle, anyone who may pollute the environment has to pay to ensure that any possible impact of his operations on the environment can be minimized. Therefore, I hope that Members will reconsider our fee increase proposal and vote against this motion.

Question on the motion put.

Voice vote taken.

THE PRESIDENT said he thought the "Ayes" had it.

DR PHILIP WONG: I claim a division.

PRESIDENT: Council shall proceed to a division.

PRESIDENT: Will Members please proceed to vote?

PRESIDENT: Before I declare the result, Members may wish to check their votes.

PRESIDENT: Are there any queries? The result will now be displayed.

Mr Allen LEE, Mrs Selina CHOW, Mr Martin LEE, Mr SZETO Wah, Mr LAU Wong-fat, Mr Edward HO, Mr Ronald ARCULLI, Mrs Miriam LAU, Mr Albert CHAN, Mr CHEUNG Man-kwong, Mr Michael HO, Dr HUANG Chen-ya, Miss Emily LAU, Mr LEE Wing-tat, Mr Fred LI, Mr Henry TANG, Mr James TO, Dr YEUNG Sum, Mr Howard YOUNG, Mr WONG Wai-yin, Mr James TIEN, Mr CHAN Kam-lam, Mr Andrew CHENG, Mr Anthony CHEUNG, Mr CHEUNG Hon-chung, Mr Albert HO, Mr IP Kwok-him, Mr LAW Chi-kwong, Mr LEE Kai-ming, Mr LEUNG Yiu-chung, Mr LO Suk-ching, Mr SIN Chung-kai, Mr TSANG Kin-shing and Dr John TSE voted for the motion.

Mr CHIM Pui-chung, Mr Frederick FUNG, Dr Samuel WONG, Dr Philip WONG, Miss Christine LOH, Mr LEE Cheuk-yan, Mr CHAN Wing-chan, Miss CHAN Yuen-han, Mr Paul CHENG, Mr CHENG Yiu-tong, Mr David CHU, Mr LAU Chin-shek, Dr LAW Cheung-kwok, Mr Bruce LIU, Mr MOK Ying-fan, Miss Margaret NG, Mrs Elizabeth WONG and Mr YUM Sin-ling voted against the motion.

Mr Ambrose LAU abstained.

THE PRESIDENT announced that there were 34 votes in favour of the motion and 18 votes against it. He therefore declared that the motion was carried.

INTERPRETATION AND GENERAL CLAUSES ORDINANCE

MR RONALD ARCULLI to move the following motion:

"That the Ozone Layer Protection (Fees) (Amendment) Regulation 1995, published as Legal Notice No. 435 of 1995 and laid on the table of the Legislative Council on 11 October 1995, be repealed."

MR RONALD ARCULLI: Mr President, I move the motion standing in my name on the Order Paper. The motion seeks to repeal the Ozone Layer Protection (Fees) (Amendment) Regulation 1995 under section 34(2) of the Interpretation and General Clauses Ordinance.

The Ozone Layer Protection (Fees) (Amendment) Regulation 1995, published as Legal Notice 435 of 1995 and laid on the table of the Legislative Council on 11 October 1995, increases the fees for applications for registration and for a licence to import or to export a specified consignment of a scheduled substance by about 18% with effect from 9 November 1995.

In accordance with the Subcommittee's recommendation which is supported by the House Committee that the fees should remain at the existing levels, I move to repeal the Regulation.

Question on the motion proposed.

SECRETARY FOR PLANNING, ENVIRONMENT AND LANDS (in Cantonese): Mr President, the Ozone Layer Protection (Fees) (Amendment) Regulation 1995 seeks to increase the fees for application for registration and for a licence to import or to export a scheduled substance. Under the 1985 Vienna Convention and the 1987 Montreal Protocol, Hong Kong has to fulfil its international obligations of protecting the ozone layer. These obligations include controlling the manufacture of substances that deplete the ozone layer, and also the import and export of products containing such substances. By means of registration and issue of licences, the Environmental Protection Department is able to effectively control the quantity, use, storage and disposal of chemical substances and products that deplete the ozone layer. Such substances are used only in fire prevention equipment, and air-conditioning and refrigerating facilities, in addition to industrial cleansing solvents. At present, only 214 registrants can import or export products containing such substances. Registration has to be renewed every two years, and each import or export licence can only be used once.

Under the charging policy of the Government, registration fees and licence fees are determined according to the "user pays" principle at levels that can enable the Government to recover the full costs of the services provided, and, regarding fees charged primarily for the aim of environmental protection, the "polluter pays" principle is also applied as a deciding factor. The existing fees in question were set at the cost levels of 1993. The proposed increase of 17.8% is intended to reflect the inflation in 1994 and 1995. At present, we process about 100 applications for registration or renewal of registration each year, in addition to 1 000 or so applications for import or export licences. If the fees are adjusted as proposed, each applicant will only have to pay $270 more for his licence, and the whole trade will thus have to pay $175,000 more each year. Let me emphasize once more that this adjustment is indeed very mild. The registration and licence fees in question constitute only a small part of the day-to-day operating costs of the commercial activities concerned, and the increase in actual money terms is also negligible. Moreover, instead of affecting the general public, the adjustment is directed at those operations that may cause damage to the environment. There is absolutely no reason for us to increase the indirect subsidy which these operations receive from the public.

Mr President, this is the last of my 10 speeches today. I am a little disappointed by this Council's decisions concerning the nine preceding motions. It can be said that freezing the fees in question can in no way help improve the economy of Hong Kong as a whole. When implemented as proposed, all the 10 fee increase proposals will only bring about a combined additional outlay of $3.1 million to all the trades affected every year. Even if all the people of Hong Kong were to shoulder it equally, each person would only have to pay 50 cents a year. Therefore, I think the argument that some Members have put forward about boosting the economy by freezing the fees and charges cannot stand at all. If, on the other hand, we really freeze all the fees concerned, the six million people in Hong Kong will each have to pay a subsidy of 50 cents to the operators of polluting trades. I think such a move will give the people of Hong Kong a wrong impression that taxpayers should be made to subsidize polluting commercial activities, thus dealing a severe blow to the "polluter pays" and "user pays" principles.

We believe that public opinions may not necessarily support the decision to freeze the fees and charges. Quite a number of press reports and editorials have pointed out that freezing the fees will not help boost the economy or curb inflation. It has also been pointed out that such a course of action will neither benefit the unemployed, nor reduce the burden of taxpayers. What is more, it runs counter to our long-held principle of "user pays", under which the costs of non-welfare services are recovered through the charging of fees. The only beneficiaries will be those people or enterprises that are required to pay the fees, while taxpayers will, ironically, become the biggest losers. Finally, therefore, I hope that Members will consider our fee proposal carefully again and oppose this motion.

Question on the motion put.

Voice vote taken.

THE PRESIDENT said he thought the "Ayes" had it.

DR PHILIP WONG: I claim a division.

PRESIDENT: Council shall proceed to a division.

PRESIDENT: Will Members please proceed to vote?

PRESIDENT: Before I declare the result, Members may wish to check their votes.

PRESIDENT: Are there any queries? The result will now be displayed.

Mr Allen LEE, Mrs Selina CHOW, Mr Martin LEE, Mr SZETO Wah, Mr LAU Wong-fat, Mr Edward HO, Mr Ronald ARCULLI, Mrs Miriam LAU, Mr Albert CHAN, Mr CHEUNG Man-kwong, Mr Michael HO, Dr HUANG Chen-ya, Miss Emily LAU, Mr LEE Wing-tat, Mr Fred LI, Mr Henry TANG, Dr YEUNG Sum, Mr WONG Wai-yin, Mr James TIEN, Mr CHAN Kam-lam, Mr Andrew CHENG, Mr Anthony CHEUNG, Mr CHEUNG Hon-chung, Mr HO Chun-yan, Mr IP Kwok-him, Mr LAW Chi-kwong, Mr LEE Kai-ming, Mr LEUNG Yiu-chung, Mr LO Suk-ching, Mr SIN Chung-kai, Mr TSANG Kin-shing and Dr John TSE voted for the motion.

Mr CHIM Pui-chung, Mr Frederick FUNG, Dr Samuel WONG, Dr Philip WONG, Miss Christine LOH, Mr CHAN Wing-chan, Miss CHAN Yuen-han, Mr Paul CHENG, Mr CHENG Yiu-tong, Mr David CHU, Mr LAU Chin-shek, Dr LAW Cheung-kwok, Mr Bruce LIU, Mr MOK Ying-fan, Miss Margaret NG, Mrs Elizabeth WONG and Mr YUM Sin-ling voted against the motion.

Mr Ambrose LAU abstained.

THE PRESIDENT announced that there were 32 votes in favour of the motion and 17 votes against it. He therefore declared that the motion was carried.

INTERPRETATION AND GENERAL CLAUSES ORDINANCE

MR RONALD ARCULLI to move the following motion:

"That the Road Traffic Ordinance (Amendment of Schedule 8) Order 1995, published as Legal Notice No. 453 of 1995 and laid on the table of the Legislative Council on 11 October 1995, be amended in section 2 by repealing -

"(c) Fee payable for supply of each form of a certificate of roadworthiness -

1. Private car $53
2. Light goods vehicle $63"."

MR RONALD ARCULLI: Mr President, I move the motion standing in my name on the Order Paper. The motion seeks to repeal part of the Road Traffic Ordinance (Amendment of Schedule 8) Order 1995 under section 34(2) of the Interpretation and General Clauses Ordinance.

The Road Traffic Ordinance (Amendment of Schedule 8) Order 1995, published as Legal Notice No. 453 of 1995 and laid on the table of the Legislative Council on 11 October 1995, increases by about 9% the fees charged by Car Testing Centre (CTCs) for initial examination of private cars and light goods vehicles, re-examination of such vehicles within 14 days of initial examination and issue of a duplicate copy of a Certificate of Roadworthiness in respect of such vehicles. The order also increases the fee charged by the Government for the supply of each Certificate of Roadworthiness form to the CTCs by 9% to reflect the increase in costs since its last revision in November 1994. These increases are to take effect from 9 November 1995.

The CTCs are private garages designated by the Commissioner for Transport for the inspection of private cars and light goods vehicles. The fees involved were last revised in November 1994. As the examination fees charged by Government Vehicle Examination Centres (GVEC) had been revised in June 1995 with a similar 9% increase, the CTC fees, with a 9% increase, would remain on a par with the fees charged by the Government Vehicle Examination Centres. In view of this consideration, the Subcommittee decided to support the increases for the CTCs but not the increase in fees charged by the Government for the supply of each Certificate of Roadworthiness form.

In accordance with the Subcommittee's recommendation which is supported by the House Committee, I move the motion to amend section 2 of the Order by repealing subsection (c) which sets out the revised fees for supply of each form of Certificate of Roadworthiness in respect of private cars and light goods vehicles.

Question on the motion proposed.

SECRETARY FOR TRANSPORT: Mr President, the fees for the inspection of private cars and light goods vehicles at Government Vehicle Examination Centres were increased in June this year. The Road Traffic Ordinance (Amendment of Schedule 8) Order 1995 seeks to bring to the same level the fees for similar inspections at CTCs which, although privately owned, are designated by the Government under the Road Traffic Ordinance to provide vehicle testing facilities. The Order also seeks to adjust the fees payable for Certificates of Roadworthiness.

It is only fair and to be expected that a vehicle owner should pay the same fee to have his vehicle inspected either at a GVEC or a CTC. In this respect, I am glad that the Honourable Ronald ARCULLI has accepted this and has not sought to amend section 2 subsection (b) of the Order which seeks to standardize these fees.

Section 2(c) of the Order seeks to revise the fees for Certificates of Roadworthiness. This is the mechanism through which the Administration recoups costs in respect of providing staff to administer the CTC scheme. Our team qualifies CTC vehicle testers and is responsible for checking the facilities at and monitoring the quality of service provided by CTCs. Such monitoring is necessary to ensure that the standards of vehicle examinations are uniform.

The fact is that vehicle owners do not pay anything extra for roadworthiness certificates. It is the CTC operators who pay the Administration out of the fees that they will collect. Indeed the schedule of charges already include administrative costs. I therefore see no logic nor justification whatsoever in seeking to repeal section 2(c) of the Order.

Mr President, if the motion is adopted, this will result in a distinct element of inconsistency on the Council’s part. May I respectfully remind Honourable Members that in adopting in 1994 the Public Accounts Committee recommendations on the Audit Report on "Fees for Vehicle Examinations", Members specifically expressed the firm view that fees for vehicle examination services should be set on a full recovery basis and that the level of fees should be revised annually to avoid substantial adjustment at irregular intervals.

Mr President, to support the motion now under consideration would in effect mean that Honourable Members are vetoing what they themselves so strongly advocated should be the practice that the Administration should follow in reviewing and adjusting vehicle inspection fees. I therefore urge Members to vote against this motion.

MR JAMES TIEN (in Cantonese): Mr President, of the many motions moved today, this is the last one. The response of the Government to these motions is that the fees have to be charged for the sake of environmental protection.

I must point out that the industrial and commercial sector is in full support of environmental protection. However, the industrial and commercial sector or the users of the services concerned simply do not think that the existing charges can achieve the aim of making the polluters pay. Regarding the charges merely as taxes, they are prepared to make payments without bothering about the amount involved, be it something over $100 or $200. This cannot in any way improve the environment. However, if the Government can increase the penalties imposed on offenders and then use the fines collected for appropriate purposes, I will render my support and hope that my colleagues from the Liberal Party will give their support too. If the Government makes such a proposal, we will reconsider our position. At present, the Government licence fees in question have to be paid by each and every applicant. As such, there is no deterrent effect whatsoever because applicants will simply treat the fees as taxes. This can in no way help promote the cause of environmental protection.

Thank you, Mr President.

SECRETARY FOR THE TREASURY (in Cantonese): Mr President, the Secretary for Transport has explained the proposed fee increases in respect of the Road Traffic Ordinance. Earlier I have also expressed our views on the freezing of charges. Therefore, I do not intend to repeat my arguments here.

The transport fee proposal we are now discussing seeks to increase the fees charged to designated Car Testing Centres (CTCs) for the supply of a Certificate of Roadworthiness form by $4.5, that is to say, from $48.5 to $53. The $4.5 will be payable by the CTCs and essentially will have no negative impact on the people's livelihood. Therefore, I hope Members will consider carefully and vote against this motion of freezing the charges.

Question on the motion put.

Voice vote taken.

THE PRESIDENT said he thought the "Ayes" had it.

DR PHILIP WONG: I claim a division.

PRESIDENT: Council shall proceed to a division.

PRESIDENT: Will Members please proceed to vote?

PRESIDENT: Before I declare the result, Members may wish to check their votes.

PRESIDENT: Are there any queries? The result will now be displayed.

Mr Allen LEE, Mrs Selina CHOW, Mr Martin LEE, Mr NGAI Shiu-kit, Mr SZETO Wah, Mr LAU Wong-fat, Mr Edward HO, Mr Ronald ARCULLI, Mrs Miriam LAU, Mr Albert CHAN, Mr CHEUNG Man-kwong, Mr Michael HO, Dr HUANG Chen-ya, Miss Emily LAU, Mr LEE Wing-tat, Mr Fred LI, Mr Henry TANG, Mr James TO, Dr YEUNG Sum, Mr WONG Wai-yin, Mr James TIEN, Mr LEE Cheuk-yan, Mr CHAN Kam-lam, Mr CHAN Wing-chan, Miss CHAN Yuen-han, Mr Andrew CHENG, Mr CHENG Yiu-tong, Mr Anthony CHEUNG, Mr CHEUNG Hon-chung, Mr Albert HO, Mr IP Kwok-him, Mr LAU Chin-shek, Mr LAW Chi-kwong, Mr LEE Kai-ming, Mr LEUNG Yiu-chung, Mr LO Suk-ching, Mr SIN Chung-kai, Mr TSANG Kin-shing, Dr John TSE and Mr YUM Sin-ling voted for the motion.

Mr CHIM Pui-chung, Mr Frederick FUNG, Dr Samuel WONG, Dr Philip WONG, Miss Christine LOH, Mr Paul CHENG, Mr David CHU, Dr LAW Cheung-kwok, Mr Bruce LIU, Mr MOK Ying-fan and Miss Margaret NG voted against the motion.

Mr Ambrose LAU and Mrs Elizabeth WONG abstained.

THE PRESIDENT announced that there were 40 votes in favour of the motion and 11 votes against it. He therefore declared that the motion was carried.

MOTION OF THANKS

Resumption of debate on motion which was moved on 25 October 1995

PRESIDENT: Council will now resume the debate on the Motion of Thanks.

FINANCIAL SECRETARY: Mr President, in his policy address, the Governor said that the Civil Service, no matter how effective its performance, never expects headlines in the press to read "Government does a great job". He also predicted that the response of this Council to his address, to the Progress Report and to the Policy Commitments, would be a blend of fair-minded appreciation of what has been achieved and demands for higher standards, new policies and greater accountability. He was right in the case of a selected number of speeches that I heard on Wednesday and Thursday last week, but the focus of many others seemed to have fallen elsewhere.

Before I respond to the many specific proposals advanced by Members in their contributions to this debate, I would like to take up two important general issues. The first concerns the assertion, made specifically by several Members and implied by many others, that the Government does not listen hard enough to the views of this Council or to the community.

Let me emphasize just how seriously the Hong Kong Government takes your comments and criticisms.

Many of the 471 outstanding Policy Commitments from the Governor's first three policy addresses had their origins in suggestions from Members of the Legislative Council.

Many of the 343 new initiatives announced by the Governor this year also have their origins in ideas and suggestions from Members of the Legislative Council.

The consultations on the Budget, which began before the summer recess, is a six-month process of listening to the views of Members of this Council to ensure that the Budget addresses the real concerns of the community. As Members know, I have recently started the second stage of this vital exercise.

Of course the Government listens. And the Government also responds. This is the second general point I wish to make. Over the past three years, there has been a revolution in the culture of our public service. The principles of performance and service are now the very essence of the relationship between the Civil Service and the community. I hope Members will not lose sight of this essential fact of Hong Kong's political and administrative life as they make their contributions to the many important debates which lie ahead of us in this Session.

The Chief Secretary will have more to say on the subject. Suffice it for me to say briefly that the totally transparent way my colleagues have spelt out our policy commitments and evaluate the results every year has given a whole new meaning to public administration.

In his policy address last month, the Governor stressed that the Government and the Legislative Council must work together, otherwise any plans to improve our services will amount to nothing more than good intentions. The Administration takes this policy to heart. My colleagues and I attach great importance to the views of this Council in shaping our proposals to Members. Of course, there will be differences of opinion. Of course, the Government will sometimes express its views very forcefully. Of course, there will be vigorous debate. But our guiding principle, our shared guiding principle, must be the best interests of the community we serve. Equally, the community has the right to know in full the arguments for and against the policy proposals under debate in this Council.

It falls on me to start the Government's response to the many important points made by Honourable Members last week. For me as Financial Secretary, the single most important issue was a very real concern which Members expressed over their perceptions on the current state of Hong Kong's economy.

I have been presented with a very substantial agenda. Members have asked me to produce packages to stimulate the economy, and to reduce inflation, unemployment, the income gap and taxes. In themselves, these are all laudable objectives, which the Administration is fully prepared to discuss further with Members. I will address these issues individually today and, in more detail, during the separate debates in this Council scheduled for next week.

The economy

Let me start with the general state of Hong Kong's economy. I have heard Members use the term "recession" to describe its present or projected condition. I do not believe that "recession" is an appropriate way to describe our economy, which is growing this year at a rate of 5% in real terms. A commonly accepted definition of a recession is when the actual level of an economy's GDP has fallen ¢w I repeat ¢w fallen over a continuous period of, at least two consecutive quarters. We are scarcely in such a situation. In the first quarter of 1995, the economy grew by 5.9% , due to a particularly strong rise in export levels. As some Members have pointed out, it is simple arithmetic that in forecasting a 5% growth for the year, the growth rate is likely to moderate to below 5% during the latter part of the year. But, for the year as a whole, I would still expect the economy of Hong Kong to achieve real growth of around 5%. This is very much in line with the forecast trend growth rate on which the Government bases its revenue and spending plans.

I acknowledge that this growth rate represents a slower pace of economic expansion than we had forecast at the start of the year. But I do not accept that a reduction in our forecast growth rate for the year from 5.5% to 5% justifies the more lurid media reports of doom and gloom that have accompanied the release of recent economic data. By no stretch of the imagination can Hong Kong be described as in recession or even threatened by recession. What we are seeing now is a moderation of the very rapid speed at which our economy grew in the latter part of the eighties.

The present rate of 5% growth would be the envy of many industrialized countries, which understand the full meaning of the term "recession" because they have suffered sustained declines in GDP. Through hard work and some good fortune, Hong Kong, like many of this region's economies, has remained largely untouched by the latest global recession.

While we should never be complacent about our own performance, we must accept that even for resilient and entrepreneurial Hong Kong, an open economy means that, we cannot escape completely from the consequences of major shifts in the market-place of cyclical downturns of the global economy. This means, from time to time, the pace of growth will slow down. Let me emphasize that it is the pace of growth that may decline. But I do not expect that, even in a global recession, Hong Kong's GDP will fall in actual terms. I base this confidence on Hong Kong's record of unbroken annual growth in GDP for the past 35 years.

At the moment we are in the phase of the business cycle which brings lower growth. We are currently experiencing a slow-down in domestic consumption after several years of remarkable buoyancy. A period of consolidation of the stock and property markets began somewhat earlier and has also affected local sentiment and consumption and, of course, reduced the "feel good" factor.

However, let us place all this in context. We continue to perform well on the external trade front. In the first nine months of the year, domestic exports, re-exports and exports of services all grew in real terms, with the last two in particular registering double-digit increases over the same period in 1994.

The growth in investment activity has also been impressive over this period. Investor confidence has remained solid. Retained imports of capital goods were up by 28% in the major sectors for the first nine months of this year.

With significant injections of public and private funds taking place in such infrastructure projects as the Airport Core Programme over the next few years, and potential projects, such as the Railway Development Strategy, on the drawing board, a high level of investment looks set to continue well into the next century.

Short-term economic stimulus

These facts scarcely point to a recession. But I must repeat: we are not complacent about our economic performance, and I am grateful for Members' suggestions about ways to overcome our current problems and improve our future performance. But there are limits to which what can be done. Before we embark on new policies, we must be certain that proposals for changes:

- are necessary, and not just short-term gestures which could do lasting harm;

- must be effective, and not just a matter of throwing taxpayers' money at problems; and then

- must be within the Government's proper responsibility and not just an excuse for clumsy intervention in the economy.

I have more to say on this and on our longer-term economic strategy during the motion debate on the economy next week. But, in general, I would ask Members to bear in mind the experience of advanced economies elsewhere that short-term measures designed to "kick-start" the economy can be costly, are often of doubtful usefulness and can have harmful consequences over the long term.

Members have suggested that the Government should set up an Economic Development Board, Council, Committee, or smaller agency, with public participation. This new body would be tasked with steering Hong Kong's economic development in the "right direction", winning more foreign inward investment, tackling our economic problems and making us more competitive. These are all worthwhile endeavours.

But it is not immediately clear to me whether Members are proposing policy-making and executive powers for this body or whether it would function simply in an advisor capacity. If the latter, I doubt whether the formation of such a body would add much more than an extra layer of redundant bureaucracy to the existing and well-tried network of advisory committees, boards and committees. These already provide the Government with valuable views and suggestions on economic and related issues. The Governor's Business Council and my own Economic Advisory committee are two such examples.

If, on the other hand, the intention is that we should give this body powers to make and implement policies for economic development, I would have serious reservations. So I think would a majority of Members of this Council. First, this would derogate from the Government's existing duty to formulate policies on economic issues. Second, such a body would lead us to stray from our fundamental economic strategy which leaves the private sector to generate our economic growth free from government direction and interference. This reliance on the private sector has served us well during more than three decades of sustained economic growth. It is generally accepted by the community. I am by no means convinced that a radical departure from our well-tried economic principles would be in Hong Kong's best interests.

Revenue measures

I am grateful for Members' suggestions regarding possible taxation measures that we might adopt in order to advance our economic interests. As I mentioned earlier, I am now in the process of consulting Members on the revenue measures for the next Budget exercise. This consultation exercise is an important part of the next Budget. I can assure Members that we will be considering their views and advice in detail and with great care before I formulate my proposals for the next Budget.

I am sure that Members will wish me to consider their ideas for tax cuts with one eye on our established fiscal policies and the other on our actual budgetary position. We will need first to ask ourselves two question: First, can we afford the concessions? Second, will the lower taxes provide relief where it is needed most? And, while tax concessions are superficially attractive, they can have very serious and wide-ranging implications for our economic performance as a whole.

On a matter of budgetary strategy, I would also like to remind Members that the Governor in his policy address proposed a convincing way to reassure Hong Kong and our trade and investment partners of our commitments to financial stability and to an open economy. This would be for Members to endorse the simple rule that government expenditure should increase over time only in line with the trend growth rate of economic growth. I hope Members will give further careful consideration to this suggestion.

Members have also expressed their and the community's legitimate concerns about inflation, unemployment and the gap between the rich and poor. They deserve, and receive, our continued attention.

Inflation

Our current level of inflation remains relatively high. However, allowing for some short-term volatility in consumer prices, the underlying trend during the course of the year has been downward. The year-on-year rate of increase in Consumer Price Index (A) was 9.5% in the first quarter, 9.2% in the second and 8.6% in the third. As the US dollar gathers strength, inflationary pressures from imports are falling. Locally-generated inflationary pressures are also easing up. We have stabilized the property market through the package of measures we announced last year. We have also stepped up our efforts to provide more land for development.

Inflationary pressures generated by the labour market have eased. So we move from a manufacturing to a service-based economy, we have experienced a structural change in the labour market, resulting in a temporary skills mismatch. In addition, the labour supply is growing this year more rapidly than demand for workers as more former residents return to Hong Kong and new immigration quota brings in young people of working age from China.

Land and labour are the key resources of our overall productive capacity. By ensuring a larger and more stable supply of both for the future, we will help to stabilize costs, contain inflation and maintain our competitive edge.

Unemployment

There is of course a less welcome side to any slackening of the labour market. I am well aware of the impact of increased unemployment on those who lose their jobs and on their families. We regard the rise in the unemployment rate as a matter for serious concern. The Governor held a summit in June to discuss unemployment with union and business representatives. That led to immediate measures to tackle the problem which had aggravated the situation: illegal employment and skills training and matching. The Governor has organized a second summit for next Thursday. I am sure its deliberations will make a further valuable contribution to tackling this issue.

The Secretary for Education and Manpower will have more to say on the steps being taken. I would simply like to point out that from the perspective of the Government, the private sector and the employee, that it is clearly in the best economic interests of Hong Kong to have a workforce that is stable, well-trained and fully employed, and one that enjoys a good working relationship with its employer. Industrial harmony has been a notable feature and important contributor to Hong Kong's economic success over the past years. It is essential for the maintenance of our future growth.

Income gap

Members have also drawn attention to the problem of the growing gap between the rich and poor. This is a long-term social issue rather than one related to short-term fluctuations in the economy. Over the past 10 years or so, those at the higher end of the income spectrum have enjoyed faster rises in income than those at the lower end. The lower income groups, nevertheless, have recorded considerable income increases over the period. This means that their well-being has also been improving in real terms, although at a slower rate.

In a free market economy such as ours, we do not set ourselves the objective of a completely even distribution of income. Instead, we set ourselves the objective of trying to ensure that everyone benefits from economic success. That is why we have gradually refined our tax system to assist the less well - off. That is why our public housing programme provides highly-subsidized accommodation for nearly half of all our households. That is why we have adopted substantial welfare measures and have increased welfare spending within our overall spending guidelines. And that is why in the past three years, we have increased the average monthly Comprehensive Social Security Assistance payments by 60%. Provided we can afford them, we will continue to make improvements to the scope and level of social welfare assistance in our community.

Conclusion

Overall, Hong Kong is an economy in good shape. We are not staring at a recession. Our sound economic policies have served us well for many years and look set to do so for many years to come. Market forces have effectively corrected the earlier over-heated property sector and are already working on the apparent over-supply of labour. Inflation is coming down. At the same time, we are channelling resources, in accordance with the principle of "living within our means", to help those who are most in need of them.

I said at the beginning of my speech that the Government listens and the Government responds. In closing, I should like to assure Members we are indeed here to listen and respond to their views. We look forward to forging a close effective partnership with them in the service of the people of Hong Kong in the challenging times that lie ahead.

SECRETARY FOR HOME AFFAIRS (in Cantonese): Mr President,

Equal Opportunities

A number of Members have raised the subject of equal opportunities in this year's policy debate. The first point I would like to make is that the Government remains wholly committed to the principle of equal opportunities for all. Implementation should be done on a step by step basis. Following the enactment of the Sex Discrimination Ordinance and the Disability Discrimination Ordinance some three months ago, it has become unlawful to discriminate against a person on the grounds of sex, marital status, pregnancy and disability. The two Ordinances guarantee that the people of Hong Kong will enjoy a similar level of legal protection, in respect of equal opportunities between the sexes and between people with and without disability, as is provided for in other advanced societies.

Discrimination is a social issue and public education is needed to enable the community at large to have a full understanding of the meaning of "equal opportunities for all". We have, since the enactment of these two Ordinances, actively promoted awareness of their provisions. We have also allocated additional resources to step up public education on equal opportunities. The Committee on the Promotion of Civic Education has launched activities to promote equal opportunities.

Equal Opportunities Commission

To facilitate the early commencement of the Sex Discrimination Ordinance and the Disability Discrimination Ordinance, preparation for the establishment of an independent Equal Opportunities Commission is now well underway. The preparatory work is progressing well, and we hope to bring the Equal Opportunities Commission into operation by the end of this year. The Commission will have an annual recurrent budget estimated at $65 million. Proposals for funding the Commission will be submitted to the Finance Committee shortly.

Studies on Family Status and Sexuality

The Government committed in July this year to undertake studies on discrimination on the grounds of age, family status, and sexuality, and to report to the Legislative Council the conclusions of these studies within the current legislative session. The study on age discrimination is being undertaken by Education and Manpower Branch, and my colleague, the Secretary for Education and Manpower, will explain separately what his Branch is doing in this regard.

The Home Affairs Branch has already embarked on studies with respect to discrimination on the grounds of family status and sexuality. Our research involves an examination of experience overseas and a series of discussions with interested groups to identify the problems and possible measures to tackle them.

In respect of the study on sexuality, an opinion survey has just been completed to ascertain public attitudes in this area. Some have questioned the necessity, and even Government's motives, in conducting such a survey. I would like to explain briefly the Government's position in this regard. Unlike family status and age which have been discussed widely in the public domain, there has not been a focused discussion in respect of discrimination on the ground of sexual orientation. An informed public debate on the matter, we believe, is possible only if we have a full understanding of the different concerns of the community as a whole. An opinion survey can facilitate our understanding of the issue, and before conductig the survey, we already sought the views of the people concerned, including homosexuals.

After we have completed our research and assessments of the problems involved, we will come up with proposals on various measures to tackle the problems identified, including legislative options. Our target is to publish the relevant consultative documents before the end of the year for public consultation over a two-month period. If, after this exercise is completed, it is concluded that the legislative option should be pursued, we would aim to introduce the legislation into this Council before the end of the current session.

Some Honourable Members have indicated interest in reviving proposals contained in the private member's equal opportunities legislation proposed by the Honourable Ms Anna WU in the last legislative session. I hope Honourable Members will recognize the unity of our common purpose in seeking to promote equal opportunities. The studies now being undertaken by the Government are essential for ensuring a full appreciation of the different issues involved and we have set a tight timetable for their completion. I urge Honourable Members to allow the Government time to complete this necessary work before considering whether or not to undertake legislative initiatives of their own in this area.

Women's Rights and CEDAW

Some Members suggested that a central body should be established to oversee matters concerning women rights. The Government operates on a functional basis and policies pertaining to women are being vigorously implemented by different government departments and subvented agencies. Different aspects of women development, including worker retraining, family, health, other supportive and remedial services, are addressed by various government departments such as Labour Department, Department of Health, and Social Welfare Department. A separate body to oversee women issues would only result in overlap and duplication of work. The Home Affairs Branch has for some time been playing a co-ordinating role in women issues, and we believe such role has been strengthened through our participation at the Fourth World Conference on Women of the United Nations in September this year. Since the Conference, we have forged much closer ties and co-operation with non-government organizations. This will facilitate the implementation of the Platform for Action adopted at the Beijing Conference.

Implementation of the Platform is an on-going process demanding the commitment and continual efforts of both the Government and non-government organizations. Different parts of the Government will be involved, and the Home Affairs Branch, as co-ordinator within Government on women issues, has already initiated discussions with women's groups to seek their views on the implementation of the Platform for Action.

In respect of women's rights, we are also keen to see the early extension of CEDAW to Hong Kong. After we announced in June 1994 the intention to seek the extension, we had initiated discussions with the United Kingdom Government. The discussion had to be held in abeyance because the United Kingdom was reviewing its reservations under the Convention. The United Kingdom recently announced at the World Conference in Beijing held in September its intention to withdraw many of its current reservations in respect of CEDAW. We have since then examined the impact of the withdrawal of such reservations on Hong Kong. The draft list of reservations that should be extended to Hong Kong is now being finalized. We will seek to agree with the United Kingdom Government the list of reservations as soon as possible, preferably before the end of this year. Once an agreement has been reached, we shall commence consultation with the Chinese Government through the Joint Liaison Group.

Bill of Rights Ordinance

Several Members have referred to the proposals by the Legal Sub-group of the Preliminary Working Committee (PWC) to repeal sections of the Bill of Rights Ordinance and readopt the former versions of certain laws that have been amended following the Ordinance's enactment. The proposals have raised widespread expressions of opposition in the community. The Government's position is clear. We attach great importance to the protection of human rights through the rule of law, an independent judiciary and the Bill of Rights Ordinance. Article 39 of the Basic Law makes it clear that the International Covenant on Civil and Political Rights shall be implemented through the laws of Hong Kong. The amendments to the six pieces of legislation referred to by the PWC were intended to bring the relevant laws into line with the ICCPR. There is no inconsistency between the Bill of Right Ordinance and the Joint Declaration and Basic Law and we see no reason for it to be amended in the way that has been suggested. The community has made it clear that we regard the Preliminary Working Committee's proposals as a retrograde step, one that will create a great deal of uncertainty and seriously undermine confidence. We have taken the matter up at the meeting of the Joint Liaison Group this week and will continue to press the Chinese side through formal channels.

Rural Planning and Improvement Strategy (RIPS)

Some concerns have been expressed over the slow progress of work in the implementation of the Rural Planning and Improvement Strategy (RIPS).

Let me reassure Members that Government is fully committed to completing the RIPS programme within the original time frame of 1999-2000. Of the $5 billion allocated to this programme, $3.4 billion has been earmarked for Major Works which fall under the responsibility of the Director of Territory Development costing over $15 million each, and $1.6 billion for Minor Works which fall under the responsibility of the Director of Home Affairs costing less than $15 million each.

I took over responsibility for the RPIS Minor Works in August 1994. We have already made swift and effective progress in speeding up the implementation of the Minor Works, in no small part due to our long and close links with the rural community. Since taking over, we have introduced a two-tier committee system to encourage local participation and to involve the rural community more closely in the Minor Works programme. The central Steering Committee, chaired by the Director of Home Affairs and comprising New Territories (NT) District Board Chairmen, Heung Yee Kuk representatives and senior Government departmental officials, is tasked with overseeing the general implementation of the RPIS Minor Works programme and offering advice and assistance to help speed up the programme's implementation. To complement this, each New Territories District Officer chairs a District Working Group, comprising local leaders and Government representatives, which is responsible for overseeing the programme within its district, setting district priorities for projects and assisting to overcome any objections or disputes arising from implementation of the projects.

New Arrivals

Lastly, I would like to turn to the subject of services provided to new arrivals from China and explain how we plan to monitor and assess the services provided to them, so that their needs are met as far as possible.

The most frequent problems facing new arrivals are educational needs, language training, social services, as well as their lack of familiarity with Hong Kong generally. The Government has remained committed to assisting new arrivals to integrate into the wider community. To this end, we are already subventing the International Social Service ¢w Hong Kong Branch (ISS) to run a Traveller's Aid Desk at the Kowloon Railway Station where new arrivals are helped to make contact with their relatives and given general information on the social services available. The ISS also operates an office at the Immigration Department so that when the new immigrants apply for their Hong Kong Identity Cards, they have another opportunity to seek assistance and can be referred to relevant social services.

Regarding education, support services are available to help children of new immigrants to adapt to Hong Kong. These include induction and remedial English programmes organized by agencies, remedial teaching and special counselling services provided by schools.

Apart from the above, the Director of Home Affairs who has been tasked to monitor and assess the services provided for new immigrants, has established a steering committee bringing together service providers, such as the various government departments providing direct services, as well as non-government organizations, to ensure that we are providing the right services and that these services are reaching their target. To complement the work of the committee, each District Office will collect and collate information on new immigrants in the respective district, to monitor and assess the services which are provided to them, and to reflect the findings through the steering group to the departments and agencies concerned. This will ensure that the needs of new arrivals are met in a comprehensive and co-ordinated manner.

We hope that with these initiatives, we can ease the process of integration of new arrivals into the community at large as quickly and effectively as possible.

Thank you, Mr President.

SECRETARY FOR HEALTH AND WELFARE: Mr President, I wish to thank Members for their useful comments and views on health and welfare matters and welcome this opportunity to reply to some of them.

Let me start with health issues.

On the promotion of primary health care, our objectives are clearly defined. The main health problems in our community are addressed through a comprehensive programme of promotional, preventive, curative and rehabilitation services. In collaboration with the private sector, we provide a wide range of primary health care services.

Demographic characteristics and medical needs of the target community are the key factors which we take into account in providing clinics and centres. My Policy Commitment already sets out our plan to increase primary health care centres, as well as elderly health centres and women health centres. Other than these, in disease prevention, our immunization and health education programmes for children are on-going and we have introduced a new Student Health Service. The establishment of a Health Care and Promotion Fund further illustrates our commitment to increasing health promotion, preventive care and associated research.

Dr the Honourable LEONG Che-hung suggested the development of a proper dental care policy. In oral health care, our emphasis is on prevention. Our policy on dental care therefore aims to improve the oral health of the population by promoting oral hygiene and oral health awareness in the community, targeting in particular our young people. Basic dental care is provided to some 380 000 primary school children through the School Dental Care Service.

Curative service is provided to specific groups on a need basis. We provide emergency dental service to the community at 11 dental clinics throughout the territory. Curative service is also provided to hospital patients as well as the mentally and physically handicapped persons. Comprehensive Social Security Assistance (CSSA) recipients can obtain an allowance under the CSSA for private dental services.

Some Members spoke about the Government's monitoring mechanism of the Hospital Authority. The Government monitors the Hospital Authority’s operation through a combination of statutory provisions and administrative arrangements. The Hospital Authority is required by law to furnish me with all relevant information relating to its operation and the facilities for verification of such information. The law further provides for a copy of its accounting statement and annual report to be tabled in this Council. Quarterly meetings are also held between the Government and the Authority to review its performance against agreed targets. The Hospital Authority Board, comprising mainly unofficials and including two Members of this Council, on which I am also represented, plays a very important role in the planning and management of hospital services. I shall of course continue to keep in view the effectiveness of the monitoring mechanism which is currently in place.

With regard to the roles of the public and private health care sectors, we see a clear need for both. Our policy is to encourage collaboration to ensure quality and continuity of patient care. In this respect, the Hospital Authority is in dialogue with private doctors and hospitals on how closer collaboration can be effected through a better referral system. The aim should be to make the best use of both public and private sector resources to meet community needs.

The Honourable Michael HO has asked for an assurance that adequate staff will be recruited to avoid possible delays in the commissioning of new hospitals. Adequate manpower is fundamental to the provision of health care services. We are mindful of the need to recruit adequate health care staff, particularly nurses, to ensure the timely commissioning of our new health care facilities. A planning process is in place to work out in advance the projected manpower requirements and to draw up corresponding training and recruitment plans.

Some Members have expressed concern over the improper use of drugs by medical practitioners. To address this matter, the Hong Kong Medical Council, together with the Department of Health and the Hong Kong Medical Association has set up a working group to see how the medical profession’s code of practice on the improper use of drugs can be tightened. The outcome of the working group's deliberations is expected by early 1996.

Mr President, the Government's health policy is clear. It is that no one should be denied adequate medical treatment through lack of means. With increasing demand and escalating costs, there is understandably a growing concern over the community's ability to finance our health care system. We are not alone in this. Many developing countries are facing this very same situation. We will be consulting Members in due course on proposals for a long-term health care financing strategy, including the issue of itemized charging about which several Members have spoken. One key issue that first needs to be resolved is how to improve public sector services while containing costs and recognizing the role of the private sector.

Welfare issues

I should now like to turn to welfare issues raised by Members and will start with social security payments. The Governor announced significant increases in the CSSA standard rates for adults and elderly persons living in a family unit with effect from April next year. This is a proposal which will cost about $300 million to implement and will benefit about 52 000 people. We estimate that it will increase the average payment to a family of four to $9,180 per month.

Members have raised a series of specific concerns relating to this announcement which I should like to address today.

Many expressed the view that CSSA standard rates should be increased still further ¢w especially those for the elderly ¢w and some suggested that reference should be made to the recommendations in Professor MacPHERSON’s Report of June 1994.

We gave a considered response to that Report at a meeting of this Council’s Welfare Services Panel on 7 September 1994. The approach adopted in that Report was to provide a level of financial support to the vulnerable to enable them to enjoy a certain lifestyle. This approach inevitably involved certain subjective judgements as to what type of lifestyle should be assumed to be appropriate, especially in terms of recreational and social activity.

Our approach to social security is different. We consider it to be a safety net. It is this fundamental difference in approach which has led us to arrive at different payment levels. The level of payments in our system are set to cover basic needs for food, clothing, housing, fuel, light, water and transport as well as for household goods. In addition, payments are made to meet the education expenses of children. Medical treatment for recipients at public clinics and hospitals is free.

Whereas our basic philosophy is different from that adopted in that Report, our methodologies are not that far apart. But we have one key advantage in that we have been able to use the statistics produced by the first six months of the latest Household Expenditure Survey (HES). This has enabled us to compare our CSSA standard rates with what CSSA recipients say they spend and with what people in lower income groups also say they spend monthly. These statistics showed us quite clearly that the CSSA standard rates for certain groups of recipients were too low. As a cross-check on the results of this HES-based methodology, we also built up a basic needs budget for each category of CSSA clients. Although more work needs to be done to refine further this approach, the preliminary results broadly supported the conclusions we reached using the HES method.

I shall pause here to address a technical point raised by some Members about our methodology. For comparison purposes, we looked at the expenditure patterns of those in the lowest 5% income group, that is, the income group immediately above those on CSSA. We did so because we consider it natural to compare CSSA recipients, the most vulnerable in our community, with the group nearest to them in terms of financial resources. For those uncomfortable with this approach, I can offer some further elaboration.

The result of this exercise, I can confirm, would have been the same even if we had used the lowest 15% income group. In other words, the monthly expenditure of all persons in the lowest 15% income group was lower than the CSSA standard rate payment for all categories other than adults and elderly persons living in a family. I fully understand Members' surprise regarding some of these data, especially those relating to the elderly. But we cannot simply ignore what the Survey tells us.

When our comprehensive review of the system is completed next year, we shall present all our recommendations to this Council and there will then, no doubt, be an important and fully informed debate on them.

Our review covers much more than just assessing the level of standard rates. Even that assessment is not complete yet because we still need to examine carefully the full 12-month data from the HES and to refine further our cross-check methodology of building up a basic needs approach. Other issues being considered in the review could also have a major impact on the level of support provided to CSSA recipients.

Before leaving this subject, I should like to comment on a specific proposal made by some Members who suggested that CSSA rates should be pegged to 30% of the median wage. This would be totally contrary to our philosophy of assessing payments against individual needs. In our system, very few recipients receive exactly the same payment because standard rates vary according to the age of recipients and the payment of special grants vary according to the precise nature of their special needs. If our safety net is to address needs, such an approach is necessary. To set rates by reference to a percentage of the median wage would be too rigid to address needs; it should also be borne in mind that the median wage can drop in times of recession. At such times it would not necessarily be wise to decrease welfare payments as well. We do already have a mechanism for regularly increasing all CSSA rates in line with a special inflation index to ensure their real value is maintained. It may be of some academic interest to note that the average CSSA payment for a single elderly person already represents about 29%, and for a family of four represents 95%, of the median wage.

Some Members have called for an increase in the level of assets a person should be able to hold while being eligible for CSSA payments. I believe this recommendation is connected to wider concerns Members have expressed about the plight of the unemployed and how the CSSA scheme can be revised to address their problems. Of course an unemployed person is eligible for CSSA support if his financial situation meets the eligibility criteria. But I would strongly caution against any attempt to "hijack" the CSSA scheme to address problems it was never intended to address, whether this be unemployment or, indeed, retirement protection. The CSSA is a non-contributory scheme created to provide a safety net to meet basic needs. In other places, schemes have been devised to provide unemployment benefits or old age pensions but these schemes are normally contributory. Indeed, the mandatory provident fund scheme to be set up here is a contributory scheme designed to provide financial support in retirement. These schemes are often designed to support a lifestyle well above the basic needs level we seek to maintain in our safety net.

On a point also related to social security, I note the Honourable LAW Chi-kwong's request that social security and welfare services should be funded from separate accounts. I assume that the objective behind this suggestion is to make it easier for us to increase spending on both simultaneously. But we must be realistic. The size of welfare spending as a part of the overall government spending can only be so large and can only increase so fast. Within the limits of welfare spending, it is important to strike the right balance between spending on social security and on direct welfare services. Spending on social welfare has been growing rapidly; this year it will have increased by 24% in real terms over last year. Since 1991-92, as a proportion of total recurrent public expenditure, our expenditure on social welfare has grown from 7.8% to 9.2%. This is good news, but we must be careful not to allow the lion's share of this increased expenditure to go on social security funding instead of on the necessary sustained upgrading and expansion of welfare services. Even a minor upward adjustment in social security payments can lead to a very significant increase in recurrent expenditure. Getting the balance right is a key issue. When we come to examine the full recommendations of the CSSA Review, we must bear in mind that the total funding available for welfare is limited. There is inevitably, therefore, a trade-off; greatly increased expenditure on social security could, indeed, mean relatively less for expanding welfare services.

In the case of the elderly in particular, this balance between financial support and the provision of welfare services merits careful consideration. The Governor’s address highlighted the major initiatives in hand to meet the service needs of the elderly. Yes, we have suffered some minor delays in the provision of some services and we are doing all we can to meet our targets. We must remember, however, just how ambitious some of those targets are. For example, by the end of this financial year, we will have provided an additional 4 400 residential places, 35 social centres and six multi-service centres for the elderly. I understand Members' desire to see these programmes completed even more quickly, but I would hope that this desire would not blind them to the significance of what has already been achieved.

The Honourable Christine LOH highlighted the need for more outreach and home help services for the elderly. I could not agree more. I should like to see such services expanding more quickly and will be considering how to develop our existing programmes more effectively in this respect, and in particular, by building on the Older Volunteers Programme which is still at only its early stages of development. We shall also be assisted in developing new ideas in this regard by a constancy study on the needs of the elderly which we aim to commission early next year.

Much of our recent rapid expansion in services for the elderly has been funded through the Lotteries Fund and I note the concern of the Honourable LAW Chi-kwong that this Fund may be depleted by 1997-98 when the $2.3 billion injected into it in 1992 has been used up. On 29 March this year, I assured this Council that the General Revenue Account will be able to absorb after 1996-97 all the recurrent welfare expenditure currently provided from the Fund. This has already been taken into account in our current financial forecasts.

I should like to conclude by referring to another important point raised by Members, which is the need for us to continue to nurture with care the co-operation and partnership between the Government and the non-government sector which is critical to the successful provision of services to meet the welfare needs of our community.

To nurture is not, however, to freeze that relationship. It must be allowed to grow and respond to changing times. A constructive dialogue is currently in hand regarding how we might modernize our subvention systems to allow our partnership with the NGO sector to grow stronger and flourish well into the next century. The Subvention Consultancy Study will, I hope, make some fundamental recommendations for change. Those changes are likely to give the NGO's much greater freedom to deploy resources provided by the Government in a more effective way to meet the standards of performance required in all service areas. If, working together, we achieve this goal, we shall have made a significant change for the better in the provision of welfare services in Hong Kong.

On that point of hope for the future, Mr President, I should like once again to thank Members for their support and for their comments. I look forward to working with them in this Session to improve the provision of health and welfare services for the community.

Thank you.

SECRETARY FOR EDUCATION AND MANPOWER (in Cantonese): I am grateful to Members who have spoken on education and manpower issues in the Motion of Thanks on the Governor's policy address.

Education

There appears to be some misunderstanding that because not all important educational issues have been mentioned in the policy address, education is being relegated to a role of lesser importance in the overall Government policy. Nothing is further from the truth. Education has been and will continue to be at the fore front of the Government's priorities. This is fully borne out by the fact that our education budget has remained the single largest recurrent expenditure item in the Government over the past five years ¢w at around 20% - 22%. In money terms, it has grown from $16.6 billion in 1991-92 to $30.3 billion in 1995-96, representing an increase of 82% or 26% in real terms. While tertiary education has claimed a larger share of this growth to achieve the programme of expansion started in 1989, basic school education has also seen a substantial increase from $ 11.3 billion to 18.6 billion representing an increase of 64% or 13.3% in real terms over the same period. Against a net reduction in school population by 50 000 or 5.2% over the same period, such increase has assumed greater significance than it appears. Indeed, it has enabled our on-going improvement programme to continue, including:

- the provision of additional teachers to both primary and secondary schools to reduce class sizes;

- the introduction of special measures to assist the lower achievers and the less motivated;

- the launching of a programme to upgrade teaching posts in both our primary and secondary schools;

- the commencement of a massive construction programme to improve the teaching and learning environment of our schools;

- the establishment of the Hong Kong Institute of Education to upgrade our teacher education;

- the introduction or re-inforcement of a series of policy initiatives aimed at enhancing the overall quality of our students such as the policy on medium of instruction, diversification of the school curriculum, the introduction of the School Management Initiative and Target Oriented Curriculum.

Notwithstanding these improvements, we are in no way complacent as some Members seem to suggest in their speeches. On the contrary, we have been working hard to lay the solid foundation for the development of high quality education in the 21 century. Our work in this respect include:

- the University Grants Committee will be submitting to Government its Report on the Review of the Development of Higher Education in early 1996, setting out the vision, goals and objectives for higher education into the next century;

- the Education Commission is expected to submit its anxiously-awaited report on Language Proficiency by the end of this year. This report should provide us with a comprehensive strategy in enhancing the language proficiency of our school students in Chinese, English and Putonghua;

- the next immediate tasks of the Education Commission are to complete its final report on school quality and publish its consultative document on school funding, both in 1996;

- the Board of Education is conducting separate reviews on the nine-year compulsory education and special education and expects to complete them in the first half of 1996;

- to complete the review on the school sector, the Education Commission will commence its review on the post compulsory school education in early 1996.

The recommendations from all these reviews plus those from the Working Party on Kindergarten Education expected by the end of 1995 will provide the Administration with not only an overall perspective of our education system but

more importantly, the opportunity to develop our education policies and strategies for the next century in a coherent and forward looking manner.

I hope I have said enough to reassure Members of the Government's determination to continue to develop and improve our education services. In particular, I hope the Education Commission's report on Language Proficiency should address the concerns of some Members on the need to improve the language standards of our students. In this respect, I note the suggestion that we should speed up the learning of Putonghua in our schools. I agree entirely. In my policy commitments, I have already pledged that all our school children can start their formal Putonghua lessons from 1998. This timetable takes account of the minimum two-year lead time needed for the preparation of the curriculum and publication of the new Putonghua textbooks required. But we lose no time in preparing our children; we will seek approval of a capital sum of $30 million from the Finance Committee this month, so that summer Putonghua classes will be organized in 1996, 1997 and 1998.

I should now like to respond to other specific comments made by Members.

Curriculum

A number of Members have called for broadening the school curriculum to meet changing needs. Reviewing of the curriculum is an ongoing process. For example, an evaluation of computer subjects will take place this year to ensure that they reflect the latest technological changes and trends of computer applications. Another example is the current revision of the guidelines on civic education which will be completed in 1996. Nevertheless, I share Members' concern on the continuing need to develop our curriculum and shall pass it to the Curriculum Development Council as a timely reminder of their role in this respect.

Primary Graduate Posts

Concern has been raised about insufficient number of primary graduate posts to meet the Education Commission Report No. 5 target of such posts representing 35% of all primary teacher posts by the year 2007. The provision of graduate posts is one of the many measures the Government has taken to raise the quality of primary school education. We recognize its importance. We provided 360 posts in the past two years and will provide another 300 in 1996-97. The Government is aware of the possible mismatch between demand and supply of primary graduate teachers before 2007 and has set up a Working Group under the Education and Manpower Branch to consider the issue and recommend solutions. The Working Group expects to complete its review by the end of this year.

Special Education

Some Members have expressed concern on special education. This subject was discussed at length in a motion debate in this Council in June this year. I shall not repeat the details here. I just wish to emphasize two points. First, integration has been and will continue to be at the heart of our policy on special education. To support this policy, we have developed over the years a comprehensive network of services to ensure that as many children with special education needs as possible are educated alongside their peers in ordinary schools. Secondly, we look forward to receiving the recommendations arising from the Board of Education's review of special education and will examine them positively.

I leave Education by restating its two very important goals. One is to develop the character and potential of our youngsters to enable them to lead a full, meaningful and dignified life. The other is to train up a large enough pool of people with the necessary knowledge and skills to meet the ever growing demands of the economy and our society at large. This brings me to manpower.

Manpower

It has been suggested by some Members that we do not have a manpower policy. This is simply not true. The Government's policy is to ensure that there is a stable and well-motivated workforce to support our economic growth. Also, we aim to maintain in Hong Kong a level of labour standards which compares favourably with those of our neighbouring countries with similar economic developments and social-cultural background.

Our policy objectives are geared towards meeting the requirements of our economy both in the short and in the long term. In pursuance of this, the Education and Manpower Branch conducts manpower studies regularly to assess the kind of education which the working population should possess. These studies provide statistical projections of manpower supply and requirements by educational levels for the purpose of assessing whether under existing and planned education provisions, the mix of manpower supply in terms of educational levels will be broadly in line with the future needs of the economy. The latest report published in 1994 projected our manpower requirements up to the year 2001. I am considering whether it will be useful to attempt an update in advance of the 1996 Census exercise.

Vocational Training

As part of the process in determining the overall manpower requirements of Hong Kong, the Vocational Training Council (VTC), through its training bodies, conducts surveys biennially of the manpower requirements of the different sector of the industries. These studies provide a solid basis upon which the VTC develops its courses for the students. Last year, some 100 000 places were offered in the VTC programme. Next year, we will spend $1.4 billion on the VTC programme offering about 110 000 places.

The VTC has been making a valuable contribution to our manpower supply. But we should not be complacent. We must ensure that the young people attending VTC courses will continue to be provided with a comprehensive system of technical education and industrial training suited to Hong Kong's ever changing needs. I therefore intend to commission a consultancy to undertake a review of the VTC including its programme of activities. We shall of course work closely with the VTC in this important exercise.

Employees Retraining Board

Hong Kong's success has been built on the dedication of entrepreneurs and the hard work of our labour force. The economy of Hong Kong took off in the 50s when our factories began to produce goods that were sold all over the world. The workers in the factories were skilled, industrious, productive and flexible. Those qualities were instrumental in making Hong Kong what we are today. Many of the workers who have helped to build this dynamic economy are still in their prime. We need to upgrade the skills of those who are already in our workforce and to equip those who have been displaced as a result of the economic restructuring. The Employees Retraining Board (ERB) was set up in 1992 precisely for these purposes. In the short time since its establishment, the ERB has provided over 80 000 training places. This is a reflection of its popularity and the eagerness of our workers to improve themselves.

I am convinced that ERB will continue to remain an integral part of our manpower supply. I am also convinced that it has the potential to provide an even better service to our workers. So it is only right that we take stock of what we have done and ask ourselves some searching questions. I have started discussions with the ERB on the commissioning of a consultancy study to review the direction and strategy of our retraining programme. Both this and the VTC study will be completed early next year. They will provide the Government and the two bodies with a very good basis for setting our sights in the next five or 10 years.

Importation of Labour

I share the concern of Members over the current difficulties faced by the unemployed in finding jobs. It is precisely for these reasons that we introduced a job matching programme in April this year. The results have been very encouraging. We have found jobs for over half of the registrants under the job matching programme. It has been suggested in some quarters that the solution lies in a complete ban on the importation of labour. This is not the answer. As an open and flexible economy, Hong Kong must have the option to supplement our workforce with imported workers to fill vacancies that cannot be filled locally. This ability to respond quickly to labour requirements is a major component in the maintenance and furtherance of our competitiveness. There may also be jobs which, because of their nature, may no longer be attractive to our now more sophisticated labour force.

When the General Labour Importation Scheme was introduced in 1989, the labour market was very different from what it is now. We have conducted a thorough review of this scheme and put forward proposals for its termination and replacement by a very limited Supplementary Labour Scheme (SLS). Critics of the proposed SLS claim that in essence it is the same as the General Scheme but with a new name. This is not a fair nor reasonable comment. Our proposed scheme is different from the existing scheme in three main areas. First, it has no industry sub-quota; application for imported labour will be considered on a case-by-case basis. Secondly, the application has to pass three tests that is open recruitment, Labour Department's job matching programme and the alternative of ERB retraining, before it is processed further. Thirdly, the operation of the scheme will be monitored by the Labour Advisory Board and by the Manpower Panel of the Legislative Council. In short, our proposal ensures that local workers have first priority and every opportunity to fill the available vacancies. I doubt whether anyone can propose a more open, fair and strict scheme. This perhaps explains why public feedback as expressed in an independent opinion poll and media comments have been generally very supportive of the Government's proposal. The Labour Advisory Board (LAB) has met earlier this afternoon to discuss the proposed SLS. I am glad to inform Members that the LAB has agreed in principle to take on the role of monitoring the operation of the Scheme. Procedures for vetting the applications and monitoring the Scheme have been discussed and will be finalized having regard to the advice of LAB members. They will be both stringent and transparent.

I am aware that imported labour is a very sensitive issue. The Government is equally concerned over the plight of the unemployed. But I repeat: the sole purpose of the proposed SLS is to allow the entry of a limited number of foreign workers to take up jobs which cannot be filled locally. Up to now I have not heard any rational argument as to why in these circumstances and following the termination of the General Scheme, we should not even retain a policy option of employing a limited number of foreign labour. As a Government, we cannot afford to lose sight of the wider community interest. Indeed, in my discussions with many Members in the last few weeks, I did not feel that there were fundamental differences between us on this issue. We share a mutual concern to ensure that local workers are not deprived of job opportunities. I urge Members to consider the Government's proposal in a positive light. Let me emphasize once again that the Government has a positive and open attitude and I hope Members will adopt a similar stance so that we can resolve this issue as expeditiously as possible.

Before I leave the subject of importation of labour, I want to make it clear once again that our review did not cover the Special Scheme for Importation of Labour for the New Airport and Related Projects. That scheme is of paramount importance to the completion of the new airport on time. Adequate measures are in place to safeguard the employment opportunities of local workers. We have no intention to make any changes to the scheme.

Industrial Safety

Earlier on, I referred to the importance of training and retraining. In addition to upgrading the skills of our workforce, we must also ensure that there is an increasing awareness of safety practices. We need to do more to reduce the unacceptable number of deaths and injuries in industrial undertakings particularly among workers in the construction industry. The consultation paper on industrial safety which was published in July proposed a series of measures to improve safety practices. We have completed the public consultation exercise and I am pleased to report that there is general support for the new policy initiative of introducing a safety management system in our work places. We will also propose to increase Government's monitoring and enforcement responsibilities. We are finalizing our policy proposals and I shall be putting forward legislative proposals to Members for consideration in 1996.

Age Discrimination

I would like to say a few words about the issue of age discrimination in employment. This is not an area where we are standing still. I have set up a working group to look into age discrimination in employment. The Working Group will:

1. ascertain the extent to which age discrimination is a problem in Hong Kong; and
2. consider what Government measures, if any, should be adopted to tackle the problem.

The working group is now examining information on administrative and legislative provisions relating to age discrimination in a variety of overseas jurisdictions. We are interested in those places where this issue has been resolved without recourse to legislation as well as those where the legislative route has been followed.

Later this month we shall select a consultant to carry out a fact finding survey on this subject. The results of this survey, as well as our assessment of what has been done overseas, will be incorporated in a paper for public comments in early 1996. In the meantime, I shall continue to ask employers not to use "age" as a factor when recruiting staff. I shall keep the Manpower Panel of the Legislative Council closely informed of and, where appropriate, involved in this worthwhile exercise.

Labour Relations

Mr President, I would like to conclude my statement by reiterating what the Financial Secretary had said earlier, that is, Hong Kong's success is based on its excellent labour relations. This has contributed immeasurably to business confidence and the harmony and stability of Hong Kong. Our system, which involves both employers representatives and employees representatives with the Government playing a mediating roles has served Hong Kong well. We should continue with this well tried formula. The Government is committed to improving labour rights and benefits in keeping with our economic growth and in tune with the community's aspirations. We will continue to search for and strike the right balance between the interest of employers and the welfare of our workers. I see no fundamental conflict between the two in the long or even in the short term.

The Legislative Council has a vital and positive role to play in the decision-making process. I will endeavour to work with Members of the Council on labour issues. I look for co-operation and solution, and I see no need for confrontation and division. I am confident, with goodwill and an open mind, working together, we will continue to improve the rights and benefits of our well-deserved labour force.

Thank you, Mr President.

SECRETARY FOR FINANCIAL SERVICES (in Cantonese): Mr President, on the second day of the debate on the Motion of Thanks, a Member said that it was a welcome move for the Government to stress in the programme highlights of the policy address the encouragement of the development of the debt market. However, this Member seemed to have doubts about the commitment of the Government. He noted that he could not see how the Government was going to implement the proposals since the policy address had neither mentioned the injection of resources nor set out a timetable. I would like to thank this Member for his concern over the prospect of Hong Kong's capital market. If we can stimulate the development of the debt market, it would surely be conducive to maintaining Hong Kong's status as an international financial centre. We are aware that the financial market of Hong Kong, be it the stock market, futures market or foreign currency market, has reached a mature state. Though our debt market has made a start later, its development in recent years has been satisfactory. In 1994, the number of debt items issued in Hong Kong amounted to 185, and the total value was to the tune of $55 billion, an increase of almost three times that in 1993. What is more, the Hong Kong Monetary Authority (HKMA) has been issuing the Exchange Fund Bills and Notes since 1990. As at the end of September 1995, the outstanding Bills and Notes amounted to a total of $57 billion. The Central Moneymarkets Unit (CMU) Service started by the HKMA has since 1994 extended its clearing and custodian facility to private sector debt instruments. As at the end of September this year, there were altogether 233 debt instruments, with an estimated total value of well over $62.8 billion. As regards the use of the CMU Service, the average daily turnover was brought to $283 million. That is almost 26 times the daily average turnover in February 1992. It may thus be inferred that Hong Kong's debt market has great potentials for development. In addition, these are not empty words as suggested by that Member. In fact, the Government has specific proposals for further development in this area. I hope that Members will give their support to the specific proposals to be put forward by the Government.

Members may recall that the Legislative Council passed the Mandatory Provident Fund Schemes Bill in July this year. Under this Ordinance, Hong Kong can establish a sound retirement protection system to assist the working people to save up systematically for the purpose of securing a living after retirement. This system will not only help solve the retirement protection problem for the increasingly aging population of Hong Kong, but will also play a significant and positive role in the capital market of Hong Kong. The reason lies in the fact that this system will raise the level of Hong Kong's retirement reserves, and the assets thus accumulated will provide abundant fund for the growing debt market of Hong Kong. The establishment of the Mandatory Provident Fund System will surely strengthen and reinforce the debt market of Hong Kong, and the status of Hong Kong as a financial centre can be further established. If the Mandatory Provident Fund System can be carried out smoothly, we estimate that the total accumulated assets under this system will, on the basis of the value as in 1995, be boosted from $146 billion in 2000 to $2,900 billion in 2030. The annual contribution to the system will be roughly equivalent to 4% of the Gross Domestic Product. Since the accumulated savings will be on a par with the Hong Kong dollar assets in the banking system, this large sum of assets will surely reinforce the debt market of Hong Kong. For the sake of developing a prudent and sound monitoring system for the provident fund scheme, we will lodge a funding application to the Finance Committee of the Legislative Council in due course in order to proceed with the work of drafting subsidiary legislation and undertaking other preparations. We hope that Members can consider and support out funding request on the premise of Hong Kong's interests.

Our attention is also drawn to the fact that some Members mentioned the possibility of relaxing the 70% mortgage ceiling for residential units in the light of the subdued property market and the fact that the anti-speculation measures introduced in 1994 have been obviously working. My colleague, the Secretary for Housing, will respond fully to the views of Members on the property market later. I will now offer my thoughts on the 70% mortgage ceiling merely from a financial viewpoint. The 70% mortgage ceiling is a voluntary guideline adopted by the banking sector in 1991 in the light of risk management. The purpose of the guideline is to restrict the size of each mortgage loan offered to borrowers to not more than 70% of the estimated market value of the property concerned. This guideline has become the mortgage loan standard for residential units within the industry and it has the full backing of the Government.

The guideline on the 70% mortgage ceiling is one of the important measures adopted by banks to control risks. One of the important principles of risk management is that bank loans should not be concentrated excessively on a certain trade or a certain market. In the case of Hong Kong, bank loans in relation to the property market is about 40% of the size of domestic loans offered by banks. The level is by international standard relatively high. Moreover, property loans are generally long-term loans while short-time capital, such as deposits, provides the necessary capital to facilitate the offering of long-term loans. Therefore, banks may easily run into a maturity mismatch between short-term deposits and long-term loans.

On the above grounds, although the proportion of bad debt in the market of residential property mortgage loans in Hong Kong is very low indeed, banks find it necessary to set a ceiling for property mortgage loans, with a view to cushioning the risks that may be incurred in case there is a drastic drop in property prices. In view of this, the Government supports that the 70% mortgage ceiling should continue to be adopted as a long-term policy. This policy is very important to maintaining the stability of our banking system. The relevant ceiling has been set out in the guideline issued by the HKMA to banks in respect of property loans. We believe that this guideline on the ceiling has been very useful to the management of risks by banks during peaks and troughs of the property market since 1991. Therefore, we should not lift or revise this ceiling casually in response to what may only be short-term market changes in a certain period.

However, the guideline has a certain degree of flexibility. The HKMA does not oppose to the launching of co-financing schemes by banks and developers, so borrowers may obtain financing in excess of 70% of the value of the property through the provision of "topping-up" loans by the developers.

However, similar innovative schemes should not exceed the bounds. It is a very important principle that the integrity of the mortgage ceiling offered by banks should be maintained. Recently, a joint loan scheme has been introduced where the "topping-up" element of a loan is provided by another bank in the form of personal loan with the property as security. We think that this arrangement has crossed the acceptable line. Although we do not intend to draw up detailed rules to restrict the operation of banks, banks have to adhere to the following three basic principles when participating in co-financing schemes:

First, the portion of the property mortgage loan provided by banks shall not be more than 70% of the market value of the property;

Secondly, the "topping-up" element shall not be provided by another bank and;

Thirdly, the banks providing the property mortgage loan shall exercise due care when assessing the debt-servicing ability of the borrower in respect of the entire loan, including the servicing ability in respect of the "topping-up" element.

I believe that the three principles above can protect the interests of the banks and the borrowers. If a bank is not sure whether or not a particular scheme should be introduced or whether or not a scheme is in line with the basic principle of co-financing, it should consult the HKMA before it considers participating in or introducing the relevant scheme.

Thank you, Mr President.

SECRETARY FOR TRADE AND INDUSTRY (in Cantonese): Mr President,

the effects of the economic restructuring understandably continue to be a concern of the Government, this Council and the community. I am therefore pleased to see the support expressed by Honourable Members for the Government's initiative to seek to promote the development of the service industries. Building on Hong Kong's success as an international services centre, the Financial Secretary's task force is looking into the strengths and weaknesses of individual service sectors, and measures to create a domestic environment conducive to the further development of services. The task force will carry out extensive consultation with the business sector and professional experts in the coming months.

But, let me make it very clear that this initiative does not mean that we are going to develop the service industries at the expense of the manufacturing sector. Nothing is further from the truth. In this regard, the Government shares the view expressed by some Honourable Members that the future of our manufacturing industry lies in the use of high-tech processes and the production of high valued-added products.

However, I am baffled by what many Honourable Members perceive as the role of the Government in our industrial upgrading. Almost without exception, Honourable Members who spoke on this subject advocated, explicitly or implicitly, an interventionist approach by the Government. An extreme example is the attribution of the success of our neighbouring countries to their governments having followed "the Japanese example in which the powerful Ministry of International Trade and Industry has coached some companies for excellence, even dominance, in certain specialties to the country's benefit". Nothing can be more wrong-headed and more mind-boggling than these demands that we should turn Hong Kong's free and open economic regime ¢w a regime that has over the past few decades made Hong Kong the economic wonder of the world ¢w into one in which entrepreneurs are made to dance to a tune composed by bureaucrats!

We are not apologetic at all about our policy of minimum intervention and maximum support. It is our firm conviction that the Government's role should be confined basically to maintaining macro-economic stability, creating an environment that is the most business-friendly in the world, providing education and training for our workforce and building up the physical infrastructure required to support economic activities. We believe, wholeheartedly, that the Government should not attempt to direct or manage the economy at the macro level or to second guess markets and entrepreneurs at the micro level. This is because our entrepreneurs make better business decisions than civil servants. Indeed the very success of our economic way of life is to trust the markets and to let competition take command. In short, Adam Smith's "invisible hand" of the market is much to be preferred to the dead hand of government interference.

In addition to maintaining a favourable climate for business and economic development, the Government has invested in projects which are specifically targeted at supporting industrial upgrading.

- We have three industrial estates catering to companies which are able to bring new or better technologies or products to Hong Kong and which cannot operate in multi-storey buildings. We are looking into the need for a fourth industrial estate.

- The Hong Kong Productivity Council with its network of subsidiary companies provides a wide range of services to help manufacturers upgrade their productivity and technology.

- The Industrial Technology Centre was opened this year providing accommodation, support and services to new technology-based businesses. We are looking into the possibility of setting up a second industrial technology centre.

- A fund of $200 million has been allocated for applied research and development.

- On top of that, we have also set up an industrial support fund for the purpose of providing financial assistance for projects seeking to upgrade the technological skills of and to facilitate technology transfer to the manufacturing industry. In its first two years, $180 million was injected into the Fund in 1994-95 and $210 million in 1995-96; and subject to the approval of the Finance Committee, $250 million will be made available in 1996-97.

- The Industry Department's inward investment programme is designed to attract overseas investors who can bring useful and relevant technologies to Hong Kong.

I note the support for the construction of a science park. As Honourable Members know, we have completed a consultancy study and are consulting interested parties. We look forward to discussing this project with the Trade and Industry Panel of this Council later this month.

Some Honourable Members also asked for greater co-operation with China to help develop Hong Kong's industrial technology. This is already happening. We have established an Applied Research Council to support joint applied research and development projects between Hong Kong entrepreneurs and major research institutes in China. During my visit to Beijing last month, I discussed with State Councillor SONG Jian, who is the Chairman of China's State Commission on Science and Technology, the possibility of encouraging and facilitating further co-operation between Hong Kong entrepreneurs and Mainland scientists; and, with his enthusiastic support, I am optimistic about the prospects for such co-operation.

Turning to competition policy, I should like to stress once again that the Government is fully committed to the promotion of competition, which is the best guarantee of economic efficiency and reasonable prices for consumers. Where necessary, we will use appropriate and pragmatic measures to rectify any unfair business practices, safeguard competition and protect consumer interests.

As Honourable Members are aware, we have provided funds to the Consumer Council to conduct a series of sector-specific studies on competition. So far, studies on banks, supermarkets and gas supply have been completed. The Government has responded, positively and constructively, to these reports and already provided responses to the studies on banking and the supermarket industry. Our response to the report on the domestic water heating and cooking fuel markets will be ready early next year. The Consumer Council will complete studies on telecommunications, broadcasting and the residential property market by the end of this year. The Consumer Council's study on the overall state of competition in Hong Kong is expected to be completed in early 1996.

We will consider whether additional administrative or legislative measures to promote healthy competition are necessary in the light of the findings of these studies. I wish to emphasize that we are adopting a step-by-step and pragmatic approach in the formulation of the frameworks that are most suitable for promoting healthy competition in the different sectors of our economy. At this stage, we are open-minded as to whether comprehensive legislation on competition or fair trading should be introduced in Hong Kong.

SECRETARY FOR PLANNING, ENVIRONMENT AND LANDS (in Cantonese): Mr President, in this debate on the Governor's policy address, many Members have spoken on policy matters which fall within my scope of responsibilities. Most of them challenged the Government for not taking positive actions over these matters. Some alleged that the Governor was not concerned about these matters because the main text of his policy address made no reference to them. While I thank Members for their valuable opinions, I must clarify again that in the Policy Commitments, we have already explained how we are going to tackle the issues mentioned by Members, and the Policy Commitments, in fact, forms part of the policy address. Besides, I also responded to most of the questions raised by Members during the briefing session on the policy address. That said, I still want to take this opportunity to respond in more detail to the various points raised by Members in their speeches.

Flooding in the New Territories

First of all, let me speak on the flooding problem in the New Territories. As a matter of fact, the Government is very concerned about this problem, and

we are tackling it in three ways:

1. As regards long-term measures, we are carrying out primary works projects such as river improvement works and village flood prevention schemes;
2. As regards short-term measures, we are improving drainage facilities in the affected districts and carrying out maintenance works to prevent blockage; and
3. Regarding legislative backing and management system, our measures include making drainage impact assessments a formal requirement and enforcing the provisions of the Land Drainage Ordinance.

Let me now give a more detailed account of what we have done in these three aspects.

Insofar as primary works are concerned, the Government has launched a large-scale project on flood prevention and improvement of drainage facilities. In the north and northwest of the New Territories alone, the costs of improving drainage facilities are over $5 billion at today's prices. This project comprises:

1. The Shenzhen River Regulation Project: Phase I of the project which commenced in May this year is running smoothly and is expected to complete in 1997. Meanwhile, we have started the preparation work of Phase ll. We have met with the Shenzhen authorities concerned a number of times and both sides are now working very hard to bring about an early commencement of Phase II. It is planned that initial works of Phase II will commence in mid-1996, to be followed by the commencement of the main works in the first half of 1997.
2. The widening, dredging straightening of the main rivers in the north and northwest of the New Territories: As early as 1993, such works were already carried out at Shan Pui River and Kam Tin River. Works at the middle reach of Kam Tin River will commence next month.

Subsequent to the completion of these projects, significant improvement will be made to the flood prone areas in the north and northwest of the New Territories.

Moreover, we are currently making preparations for the projects at Ngau Tam Mei River, Ng Tung River and the upper reach of Kam Tin River. These projects will be launched as soon as the preparation work is completed.

Flood prevention schemes are being carried out in many villages. Under these schemes, breakwaters are built and pumping stations installed around low-lying areas and villages which are vulnerable to flooding. We have completed the flood prevention schemes for 15 villages and preparation work is under way for 12 other villages. Works at Tsung Pak Long will commence at the end of this year and those at Sha Po Village will start in the middle of next year. Some delay has occurred because of land resumption problems and the need to complete prior environmental impact assessments. We are now looking into how best we can tackle the problems we face during land resumption and expedite the whole process for the purpose of starting the projects as soon as possible. We will also examine whether it is possible to launch some contingency works projects at the rivers and streams near those villages which have recently been affected by flooding.

As for short-term measures, the Government spent $65 million in 1994-95

on the harnessing of river and stormwater drains to keep them free from blockage. Another $75 million will be spent on similar works in 1995-96. In addition, we will carry out harnessing and other minor works under the Rural Planning and Improvement Strategy at a cost of over $220 million.

In respect of legislative backing and management system, since uncontrolled developments in the past have affected the drainage system and aggravated the flooding problem, private developers and government departments planning to start projects in the New Territories are now required to conduct prior drainage impact assessments. Moreover, we can now expect to have a solution to tackle the long-standing accessibility problem faced by government officers having a need to gain access to private lands for the purpose of harnessing the drainage channels there. The gazetting of the Drainage Authority Area Plans drawn up according to the Land Drainage Ordinance will empower the Government to gain access to these places via private lands to remove obstructions at the main river channels. One of the plans has been approved by the Executive Council and gazetted recently. The other plans will be drawn up in phases in 1996.

Harbour reclamation project

Some Members of this Council spoke of reclamation, a matter which has

aroused widespread controversy recently. Many people have doubts and worries about the reclamation project and the Government is seeking to allay their anxieties. But, one important point we have to bear in mind is that Hong Kong is a place with non-stop developments. The growth in our population, transport, economy and industries constitute a huge demand for land resources, which are limited in the territory. The Government has not proposed to carry out reclamation for the sake of reclamation. Rather, it has done so because reclamation can provide us with land at the right time and the right place. For example, we cannot possibly build the Central Terminus of the Airport Railway in the New Territories. So, we have to create land through reclamation and redevelopment to cope with the increasing demand for housing, offices, hotels, community facilities and so on in the metropolitan areas. Reclamation can also provide the "solution spaces" necessary for facilitating the restructuring of the metropolitan areas, which can in turn improve the environment and the efficiency of Hong Kong as a whole.

The seven harbour reclamation projects now in progress and the other seven now under plan are just a part of the long-term development plan for Hong Kong. In fact, we can envisage that most of these projects will not commence by the end of this century or at the turn of the century. Neither the Hong Kong Government nor the Special Administrative Region (SAR) Government has made any commitment in respect of these projects. Yet, what we must do is to look into the plans of these projects in detail so that there will be sufficient information and data for decisions to be made when the time comes. We must conduct careful studies to analyze factors relating to the environment, transportation, works projects and various other aspects. We must also listen to the public's views expressed on our proposals. As to whether these projects can eventually commence, all will, of course, depend on the legislature's approval or otherwise of the various project items and their funding.

Small house policy

Some Members have aired their views on the small house policy in the New Territories. Members may wish to know that some 180 Land Executives and Land Inspectors, who account for 17% of the strength of these two grades, have been deployed on a full-time basis to process applications for the construction of small houses. The Legal Advisory and Land Convincing Office as well as the Survey and Mapping Office have also deployed additional staff to handle such applications. However, I think the Lands Department simply cannot indefinitely deploy additional staff to handle the recently increasing applications without sacrificing its efficiency in other areas of work. That said, the Government has somehow managed to cope by drawing up measures to improve the system concerned. With the recent adoption of streamlined procedures, our application processing capacity has increased significantly, from 792 cases in 1993-94 to 1 733 cases last year. The Lands Department will expedite the processing of these applications as far as possible.

Urban renewal

I have noted Members' views on urban renewal. However, I find it a bit disappointing that some Members have started to criticize the Government for failing to formulate new policies even before the completion of the public consultation exercise, not least because the consultation period has been extended at the request of Members. I understand that the Legislative Council will have a motion debate on this matter on 15 November, and I look forward to hearing Members' views on this important issue before the Government formulates any new policies.

The environment

With regard to the environment, I want to give an overall account of our environmental protection projects before responding to some of the views put forward by individual Members. Although I have given similar accounts at other times, the views expressed by some Members reflect the obvious need that I must do the same again in order to let everyone know the actual progress of our environmental protection projects.

Like many other major cities, Hong Kong has to face serious environmental problems. In the Hong Kong context, the emergence of these problems is directly related to our drastic economic and demographic expansion over the past decades and the resources we devoted to our environmental strategy in the past. However, we have made tremendous progress in abating pollution and rectifying past irregularities since we published the first white paper on the environment in 1989.

One example is that we have been making good progress in the provision of waste disposal facilities which are both environmentally acceptable and cost effective. This has succeeded in enabling us to close down many outdated and polluting facilities. Besides, we have started to invest huge resources for the proper disposal of sewage and chemical waste as well as for abating the pollution caused by livestock waste in the New Territories. On the other hand, we have achieved remarkable progress in abating noise pollution. For preventive measures, we have spent huge resources on improving our planning work in order to avoid the repetition of past mistakes and to raise the environmental awareness of the community. With the support of the Legislative Council, we have also phased in the implementation of the "polluter pays" principle.

Now I would like to respond in particular to Members' views on abating vehicle emission pollution and sewage charges. With regard to the proposed "diesel-to-petrol" scheme and its associated details, we are conducting an extensive consultation exercise, and exchanging views with representatives from the transport sector, environmental groups and other sectors in the community. The consultation period will be completed at the end of this year. We will carefully consider the views from all sectors before making any decisions. It is also my hope that we can obtain in-depth views from Members in the motion debate to be held in late November. I believe that by means of concerted efforts, we will certainly be able to formulate a more effective air improvement policy which can command more popular support.

A number of Members have argued that the consequences of sewage charges have been more far-reaching than the Government first expected, and that such charges have exerted tremendous pressure on the catering industry, leading to a host of problems, one of which is unemployment in the catering industry. Now let me explain the situation to Members again.

First of all, I would like to quote some remarks as follows:

"The public in general should share the responsibilities to clean the environment." "We are supportive of the 'polluter pays' principle and hope that members of the public support environmental protection."

"I feel that Hong Kong people will take pride in participating actively in environmental protection if they are asked to do their share for cleaning up the polluted waters surrounding us, as long as the price of what we seek for is affordable by them. It is particularly so when considering that each and every one of us will have to live on a small island surrounded by polluted water if everyone takes an attitude of 'let the others pay'.

"I fully support the 'polluter pays' principle. We all contribute to water pollution and we must all play a part, and pay a price, to clean our water. The amount we pay should obviously relate to the amount we pollute. Those who pollute more should pay more."

"It is a mistake to think that only industry pollutes. Householders also pollute. It is a misconception that the water which we use to wash and clean in our bathrooms and kitchens are non-polluting. They are. Domestic sewage makes up 60% of our waste water. "

Mr President, these comments were not made by the Government, but by Legislative Council Members when they spoke during the debate on the "polluter pays" principle, the Sewage Service Bill and its charging regulation. The Government remains very grateful to the Legislative Council for its support at that time. But we also hope that all of us can still hold firmly onto this correct direction of making polluters take up their responsibilities.

As for the financial impacts of sewage charges, according to a projection on the general sewage charge presented by the Government in this Council, by some 50% of households are required to pay a sewage charge of less than $8 a month and 85% of households will pay less than $18. Sewage charges have now been formally levied, and we can see that the Government's projection is not inaccurate at all. In September this year, a local newspaper reported the case of a household as an illustration of what it described as high sewage charges. But, our analysis showed that this seven-member household consumed 81 cu m of water during the last quarter and had to pay a quarterly sewage charge of $82.8 only, or $20.7 a month. This is in fact largely in line with the Government's estimation. Therefore, I hope we can get to know the truth. It is frequently said that the sewage charges actually levied are higher than those projected by the Government. However, in most of the cases, such comments are either due to misunderstanding or simply unfounded.

With regard to the catering industry, the Government has explained that the rates of sewage charges levied on different restaurants would vary according to a number of factors such as their sizes and locations. The sewage charge and the trade effluent surcharge levied on a restaurant account for a mere 0.46% to 1.19% of its operating costs, and this is considered reasonable by most in the catering industry. The only problem is that some people have chosen to work out a higher percentage by comparing the sewage charge levied with gross profits or net profits. Such an approach is but a means adopted to spread around an inaccurate message. During the recess of this Council, Members might have read some press reports about some restaurant operators being forced by sewage charges to lay off a large number of employees or to wind up their business. According to the Government's analysis, sewage charges are not the major cause. Many of these cases of laying-off and winding-up took place long before the imposition of sewage charges. One reason was restaurant operators' investment elsewhere. Another was the relative benefit of redevelopment since the worn-out facilities were beyond renovation. Yet other reasons included exorbitant rentals and slackened business, which prompted the laying-off of employees and the closing down of business. In each of these cases, sewage charges have proven not to be the major cause. While we are very concerned about the sluggishness of the catering industry resulting from the recent state of our economy, we hope that this Council can seek to understand the true picture instead of coming up with a random reason merely for the sake of convenience, in order to avoid a retrogression in our work of environmental protection.

On the other hand, the Government and the catering industry have reached a consensus to conduct six-week study starting from 2 October this year on the sewage chemical oxygen demand to see if the concentration of sewage discharged by the catering industry has shown any reduction following the levying of sewage charges. Pending the findings of the study, the Government will consider whether there is any need to lower the sewage chemical oxygen demand, and thereby the trade effluent surcharge. Anyhow, following the designation of the Victoria Harbour to the north of Hong Kong Island as a water control zone in 1996, fees will be standardized at the relatively lower rate in water control zones. In this connection, the trade effluent surcharge payable by the catering industry will be lowered from $9.12 per cu m in non-water control zones to $3.78 per cu m as in water control zones. It is believed that this will help alleviate the problems faced by the catering industry.

Mr President, I hope the above has provided a further explanation on some major questions and comments that Members have put forward on the policy address. Should Members have any other questions, my colleagues and I will be more than happy to conduct more detailed discussions with Members at the meetings of the various panels of the Legislative Council.

Thank you, Mr President.

SECRETARY FOR WORKS (in Cantonese): Mr President, I wish to respond to the remarks by Members in respect of improving slope safety.

Speed up the existing Landslip Preventive Measures Programme

I would like to assure all Members once again that we are determined to give the slope stability works a higher priority. As Members are aware, the Government has allocated $1.3 billion to carry out inspection works and the necessary improvement projects on the potentially hazardous man-made slopes listed in the existing 1977-78 catalogue of slopes. We have also been allowed to add about 160 posts since last fiscal year in order to advance the completion date of the Landslip Preventive Measures Programme, and 25 more posts are approved in this fiscal year. After the increase of manpower, we will be able to complete the inspection works and the necessary improvement projects for all the slopes listed in the existing catalogue by the year 2000. We understand that Members are very concerned about the urgency of these projects, and we will do our best to finish all the necessary works as soon as possible.

We are adopting a more pragmatic approach in carrying out the Landslip Preventive Measures Programme. While speeding up the implementation of this Programme, the Administration will also give a higher priority to slopes close to busy roads and footpaths.

In fact, for the $1.3 billion allocation mentioned above, $100 million are earmarked for improving slopes which are not included in the existing catalogue but are considered to be posing some degree of danger.

Amending the slope catalogue

There are about 10 800 slopes listed in the 1977-78 slope catalogue. We estimate that about 25 000 additional slopes built before the establishment of the Geotechnical Engineering Office will probably be identified and added to the catalogue. The number of slopes have increased substantially because the 1977-78 catalogue mainly concentrated on recording the man-made slopes on the Hong Kong Island and Kowloon, while only those larger slopes in the New Territories were included in the catalogue. Had the same registration criteria of the urban man-made slopes been adopted for the New Territories, the number of additional slopes included in the catalogue should have increased drastically. We plan to allocate more resources in the next fiscal year to carry out inspection works and improvement projects on slopes where necessary.

Also, man-made slopes built before the establishment of the Geotechnical Engineering Office will also be included in the catalogue.

Natural slopes

Natural slopes occupy about 60% of the total land area in Hong Kong. It should be impractical to put in the catalogue every single land feature of the natural slopes in Hong Kong. However, we have commenced a consultancy study to compile a catalogue of old landslip sites on the natural hillsides of Hong Kong by taking aerial photographs. This study is scheduled for completion in March 1996.

We can assess the risk of landslips on natural slopes by preparing this catalogue. It is estimated that we need one year to complete this task and we will carry out the necessary follow-up action afterwards.

Other Measures

Apart from indicating a need to speed up the slope improvement projects, Members have also requested the Government to explain in detail the other measures as mentioned in the policy address, and they have also proposed to amend the risk assessment criteria. I would like to report the following works progress briefly.

Systematic identification of maintenance responsibility

Concerning the responsibility on the safety of the man-made slopes, the Geotechnical Engineering Office is assisting the Lands Department to prepare an index on the ownership of the slopes. This is a project known as systematic identification of maintenance responsibility of all registrable slopes in the territory, and it is expected to start in the beginning of 1996, and is scheduled for completion in 1998. After confirming the maintenance responsibility of the slopes, the Government will be in a better position to ensure that all the parties concerned will carry out the necessary maintenance or improvement works.

Control through legislation

The Government will also amend the current legislation, stipulating the inspection works on underground pipes which may affect the stability of slopes, and ensuring that water pipes are not laid near slopes in order to maintain their safety. Also, the Government will consider enacting other new legislation stipulating periodic inspection and maintenance works on slopes and underground drainage facilities. Other measures include requesting private property owners to certify the safety of slopes registered under their maintenance responsibility.

Risk assessment criteria

As regards assessment, the Geotechnical Engineering Office has carried out an evaluation on the System for Categorising the Consequences of Slopes Failure (formerly known as the "risk categorising system"). Also, we have carried out an evaluation on the associated priority classification system for the landslip preventive measures for the selection of slopes for inspection and improvement works. The Geotechnical Engineering Office has already started to consult the geotechnical engineering sector for their views, and they intend to consult the Legislative Council Panel on Planning, Lands and Works in due course.

Conclusion

We believe the above points should serve to address Members' concern regarding slope safety. We fully understand that the general public is also very concerned about slope safety. We will continue to step up our effort to complete the above plan and implement other measures to improve the safety of slopes in an efficient, systematic and cost-effective manner.

SECRETARY FOR TRANSPORT: Mr President, I am very grateful to those Honourable Members who have spoken on transport issues in this debate. No doubt their comments reflect public views and aspirations and provide the Administration with a clear indication of what they believe the priorities, in transport terms, should be. The fundamental message seems to be to urge the Administration to plan ahead and speed up projects. A study of the Progress Report clearly illustrates that action is in fact already in hand in respect of many of the suggestions put forward by Honourable Members. We have a full and ambitious programme and are very much on target in meeting our commitments.

All major cities have transport problems and face congestion during rush hours. Hong Kong is no exception but we should not be shy in recognizing that we have one of the best transport systems in the world. That said, I am amongst the first to acknowledge that there is no room for complacency and that there is scope to do better. Indeed, we are looking ahead and will spend some $30 billion in the coming five years to expand our infrastructural network and enhance traffic management schemes.

Let me now try to put into perspective some of the major points that Honourable Members have made:

Northwest New Territories and Tuen Mun Road

With a population of over 700 000 in the Northwest New Territories, I agree 100% that the present transport network is over stretched. There are many reasons for this but I believe there is little to be gained in attempting to identify what went wrong. Rather, and more important, we should focus our energies on practical measures to cope with present and future demands. This is precisely what the Administration is doing.

The past two to three years have seen the completion of major projects. The New Territories Circular Road has been widened and improved thus providing for better access from the east. The Tuen Mun/Yuen Long Eastern Corridor was opened in 1993, and the Yuen Long Southern Bypass in November 1994. Other measures such as bus-only lanes, the improvement of the Au Tau Roundabout and the provision of more ferry services are also in hand. In addition, certain sections of Castle Peak Road are being widened and, in this respect, I can assure Honourable Members that thorough traffic impact assessments will be conducted in respect of proposals for development projects. Looking further ahead, Route 3 is now under construction and we are pursuing the implementation of the Western Corridor Railway. There are also plans to provide additional lanes along Tolo Highway ¢w we expect work to commence towards the end of 1998.

The closure of Tuen Mun Road resulted in a horrendous nightmare. Let me again, on behalf of the Administration, apologize for the considerable inconvenience and frustration that this caused to the tens of thousands of residents in Tuen Mun and Yuen Long. The Government firmly believes that, given the advice of experts that there was a real danger of landslips, we had no choice but to close the highway and that it was the correct decision. There was no question of subjecting commuters to any risk of injury or fatality. We did our level best to alleviate transport problems through special traffic arrangements by providing additional buses and ferries. There are of course lessons to be learnt and we shall certainly draw on the experience to improve contingency arrangements. We are now considering how best to complete the climbing lanes along Tuen Mun Road with minimal disruption to traffic. The district boards concerned and the Legislative Council Transport Panel will be fully briefed and consulted before work proceeds.

Railways

I now turn to railways. Many Members have urged us to accelerate the completion of the three top priority projects identified in the Railway Development Strategy. As Honourable Members know, the Kowloon-Canton Railway Corporation (KCRC) and the Mass Transit Railway Corporation (MTRC) have been invited to submit detailed proposals for the construction of the Western Corridor Railway (WCR) and the extension to Tseung Kwan O respectively. As for the third priority, we have just engaged consultants to advise on an intermediate capacity system from Ma On Shan to Tai Wai, coupled with the loop from Hung Hom to Tsim Sha Tui.

At this point let me deal with the repeated request from this Council as well as district board members to extend the WCR line from Tuen Mun North to Tuen Mun Town Centre. As promised, we have asked the KCRC, to examine this option when extending the invitation and providing them with the brief to undertake this project. Although the Administration awaits a formal submission from KCRC, I am pleased to be able to advise Honourable Members that the Corporation considers that, based on its preliminary investigations, such an extension is technically feasible and can be provided by 2001. I can assure Honourable Members that the Administration will adopt a positive approach in studying the proposal to bring the railway to Tuen Mun Town Centre. Indeed, the recent experience arising from the closure of Tuen Mun Road underlines the urgency to provide an alternative transport mode.

Insofar as the WCR is concerned, I should also highlight the fact that we see the need for a new passenger terminal at Lok Ma Chau. This is being discussed with the Chinese side under the Infrastructure Co-ordinating Committee. But Lo Wu will continue to be the crossing point for through trains, eventually linking up with the WCR to provide a direct freight service to the container port as well as an alternative route for international passengers with a terminus at West Kowloon .

Some Members have urged the early implementation of a number of other railway projects, such as MTR extensions on Hong Kong Island and other railway proposals in Southeast Kowloon. Such possible alignments have been identified in the Railway Development Strategy. We shall constantly review these projects but it would be totally unrealistic to accord them higher priority than the three rail projects which I have outlined. Apart from substantial costs, I doubt very much that either we or the railway corporations have the manpower or other resources to take on yet additional railway schemes all at the same time.

We should not forget the Airport Railway. Construction is in full swing with the opening scheduled for 30 June 1998 at the latest. With the MTRC’s excellent track record on project management, we are confident that the Airport Railway will come into operation on target.

The Lantau Line of the Airport Railway will, of course, also serve Tung Chung New Town and provide an alternative rail link from Tsuen Wan to Central, thus relieving pressure along the Nathan Road Corridor.

Traffic congestion and public transport services

I now turn to congestion on our roads and the importance of public transport services.

I have often said, and make no apologies for repeating yet again, that we simply cannot build our way out of congestion. Our fundamental policy is clear-cut: to manage road use and improve the availability and quality of public transport. The public consultation exercise and debate in this Council earlier this year on measures to address traffic congestion demonstrated strong support for the adoption of the user-pays principle through the implementation of an Electronic Road Pricing Scheme. The Transport Department is now drawing up and finalizing a study brief. We expect to invite tenders for a consultancy by the middle of next year. This shall be followed by a pilot scheme before full implementation. We shall brief and consult this Council and district boards as the exercise progresses.

Although fiscal measures to alleviate congestion did not find favour with many Honourable Members, past experience has proven that such measures do have an immediate impact. The substantial growth in the number of private cars up to the early part of this year was particularly worrying. Although the market has self-adjusted for now, the stark reality is that our road systems, even with the substantial investment in infrastructural projects which are planned, cannot cope with an annual growth of more than 2% to 3%. That is why, unpopular though it may be, the Administration has to be ready to take action should circumstances so warrant. We are now drafting legislation to provide the Administration with the requisite powers to increase Annual Licence Fees and impose passenger taxes at the tunnels and expect to submit Bills to this Council for consideration early in the New Year. If and when the Administration believes that such fiscal constraints actually need to be imposed, Honourable Members will of course be consulted and have the opportunity to examine and vet the proposals in detail.

It is no fluke that in Hong Kong we have one of the best public transport systems in the world. We have a wide range of transport modes at affordable prices. We have a successful formula: key factors are that public transport is provided by operators who run their business on commercial principles, there is no government subsidy and we have an effective regulatory framework.

We encourage private sector participation by allowing transport operators to obtain a fair and reasonable return on their investment. This is a pre-requisite, if operators are to re-invest in service improvements to meet public demand for higher standards of comfort and reliability. They in turn depend on fare increases to meet increasing costs. Indeed, the inevitable cycle of submissions for fare adjustments from transport operators has commenced. Such submissions will be scrutinized by the Administration before Members are consulted.

A number of Honourable Members have expressed concern about ferry services and the importance of ferries as an alternative transport mode. In the past two years, there have been significant improvements in services to the Northwest New Territories. For example, three new high speed catamarans have been deployed on the Tuen Mun route to cater for the morning rush. Two new routes have also been introduced ¢w one from Tuen Mun to Wan Chai and one from Gold Coast to Central. Special feeder buses and green minibuses have been provided to connect ferry piers with residential areas and these services will be strengthened. In the next 12 months, peak hour capacity between Tuen Mun and Central will be increased by 10% through the provision of one more catamaran. Some Members have suggested a shuttle service, at least during rush hours, between Tuen Mun and Tsuen Wan. This will be explored. But it must be recognized that ferry services can only be viable if there is adequate patronage.

Mr President, the Administration will continue to review its policy on ferry services and take steps to encourage investment. For example, we are finalizing the detailed terms of a pier development package with the Hong Kong and Yaumati Ferry which would enable the ferry company to implement service improvements to the Northwest New Territories and the outlying islands with fares kept at reasonable and affordable levels.

On taxis, the Transport Advisory Committee completed a comprehensive review in early 1994. Many measures to combat malpractices have been implemented. These include stiffer penalties and the display of ID cards by taxi drivers. I believe the Council is also aware that we have introduced cross-harbour taxi stands on a trial basis for the greater convenience of both passengers and taxi operators. Separately, the Transport Advisory Committee has just embarked on a full review of public light bus policies to see how these services can be improved. My colleague, the Secretary for Planning, Environment and Lands has referred to proposals to require taxis and public light buses to switch from diesel to petrol. The views of the trade will be fully taken into account as part of the public consultation exercise now in hand.

Parking

Several Members have referred to "park and ride" in the context of congestion. This proposal was advocated during our consultation exercise. We are actively looking for suitable "park and ride" sites. Indeed, the Town Planning Board has recently approved an MTRC proposal to develop a transport interchange at Choi Hung MTR Station that will incorporate such facilities. We have earmarked $60 million as the Government’s contribution for this project and will be seeking funding support from the Finance Committee in 1996.

We also have two related studies, progress on which, unfortunately, has slipped somewhat because of the very heavy workload in Transport Department. The Parking Demand Study is nearing completion and should be ready by the end of this year.

We recognize the existing shortfall in the provision of goods vehicle parking spaces. This is being addressed in the Freight Transport Study. Sites are difficult to obtain. One possible long-term solution is the provision of permanent multi-storey lorry parks near the container port and in industrial areas. In the shorter term, we will do our best to provide lorry parks on short-term tenancy sites.

Mr President, my colleagues and I look forward to working closely with the Transport Panel of this Council in the year ahead. I am particularly pleased that the Honourable Mrs Miriam LAU and the Honourable WONG Wai-yin have been re-elected as Chairperson and Vice-Chairman of the Panel and that another 17 Members have joined the Panel. This demonstrates the tremendous interest and concern in the transport portfolio. We all share the same goal of improving transport services both in qualitative and quantitative terms. To achieve this, we need to work in partnership.

Thank you, Mr President.

SECRETARY FOR HOUSING: Mr President, the Housing Branch was set up less than a year ago to co-ordinate and direct our housing policy, and to ensure that the Government's ambitious targets for increasing the production of flats in the public and private sectors could be met. As I said in my introduction to this year's Policy Commitments, we have been able not only to demonstrate significant progress towards meeting our production targets, but also to focus on the quality of our housing stock, and particularly on the quality of our public rental housing.

This year we have made another 36 policy commitments relating to public rental housing, subsidized home ownership and private housing. We need the co-operation and support of this Council, the Housing Authority, the Housing Society and the private sector in achieving all our targets. I welcome the comments and suggestions made by Honourable Members last week, and would like to respond to some of the main issues raised.

Public rental housing

First, I shall deal with public rental housing. Despite the increasing aspirations of the community to home ownership, there is no doubt that public rental housing remains one of the main pillars of our social policy. The total supply of public rental housing flats up to 2001 will be in the order of 240 000. This figure comprises the 141 000 new flats to which we are committed, and about 100 000 flats to be vacated by tenants and then refurbished for re-allocation. This increase in supply should be sufficient to reduce the average waiting time for public rental housing for eligible applicants from seven years at present to just under five years by 2001, without compromising our ability to meet other commitments in respect of redevelopment, squatter and Temporary Housing Area clearances, compassionate rehousing and overcrowding relief.

Some Members have cast doubt on our ability to achieve such a substantial reduction in waiting time. As the Governor said in his policy address, this will be no easy task. But we are determined to use our best efforts to achieve it. Against the background of our flat availability position which I have just mentioned, we shall be helped by the historical trend that the number of persons who join the General Waiting List but are eventually found not eligible, or who are rehoused through other schemes or quotas, accounts for about half of all applicants on the list. We shall also be able to increase the number of flats to be allocated to successful waiting list applicants from 1998 onwards, after our existing Temporary Housing Area residents and urban squatters on Crown land have been offered rehousing.

I also note that some other Members, far from regarding our target as over-ambitious, have asked us to reduce waiting time still further by allocating more land to the Housing Authority for the construction of more public rental flats. I would like to make our position clear on this. We have already allocated to the Housing Authority some 223 hectares of land, comprising new and redevelopment sites, to meet the target of building 141 000 new rental flats. In addition, about 185 hectares have been allocated or earmarked for building 148 000 home ownership scheme flats. These amounts of land are sufficient to achieve our present targets. Whether or not these targets need to be modified will depend on the outcome of our comprehensive assessment of housing demand in the next 10 years, which is now approaching its final stage. This assessment will take into account factors such as population growth, the timing of redevelopment and the market price of private housing. Should an increase in demand be indicated, we will use our best endeavours to make additional land available as expeditiously as possible. We will also follow up Members' suggestion of increasing the plot ratio of public housing sites, so as to make the best use possible of our limited land resources. This suggestion ties in very well with our own thinking.

A few Members expressed concern about our pledge to privatize gradually public rental housing estate management. The fact is that our experience with similar arrangements in Home Ownership Scheme courts has shown that customer satisfaction with private management agencies is high. In addition, savings can be achieved, and scarce human resources can be released for redeployment elsewhere in the public sector where they are needed for new or improved activities. Having said this, I should make it clear that we do not intend to proceed precipitately. We shall carry out a pilot scheme in three selected rental estates, beginning in early 1996. Residents will themselves be able to monitor the performance of private management agencies both directly and through the Estate Management Advisory Committee Scheme.

I wish also to respond briefly to the comments of some Members on the subject of better-off tenants. The reason for the proposed policy was clearly stated by the Governor in his policy address: it is plainly wrong that public rental housing should continue to accommodate tenants who have the financial resources to meet their own housing requirements. We must ensure that heavily subsidized housing is enjoyed by those who need it most. Where tenants can afford to buy their own homes, whether at subsidized or market prices, or to rent accommodation in the private sector, they should make way for others whose only hope of finding decent accommodation lies with public rental housing. This is a case where the need to make the best use of scarce housing resources and the basic considerations of fairness point at the same direction.

Temporary housing

Turning to temporary housing, some Members have criticized the Government for not honouring its pledges on Temporary Housing Areas (THAs). I would like to reiterate publicly that we will honour in full the three pledges. We are well on target to fulfilling these pledges. Indeed we will be able to go one step further, that is, by the end of 1997, all THA residents as at the end of September this year will be offered rehousing in public rental estates.

Separately, as a result of future clearances and increased immigration from China, there will still be a genuine need to retain some THAs in the foreseeable future. This is why we have announced the need to retain and refurbish 13 THAs after 1997 for new residents, but we are determined to improve the living conditions by a renovation programme and improved management. I am grateful to the Honourable LEE Wing-tat for his suggestion that some older rental blocks in the urban fringe areas should be retained for use as vertical THAs. This is, in fact, one of our new policy commitments. These high-rise blocks will have many advantages over the conventional wooden THA units. They will be in more convenient locations and offer better security, fire safety and environmental conditions. A pilot scheme has already been implemented in one public rental block, and we will expand this programme in 1996. In addition, new designs of temporary accommodation, with more space and better quality living standards, will gradually be introduced to replace the existing type of temporary housing.

Home ownership

I referred earlier on to some Members' differing views on our flat production targets for public rental housing. I detect the same ambivalence with regard to home ownership and, in particular, to our subsidised home ownership schemes. Some Members would prefer us to take a left-hand path (so to speak), and others a right-hand one. In fact, it is misleading to compare directly our public rental and home ownership production figures. These two different types of public housing are needed to achieve two different social objectives. Public rental housing is intended for those who are in genuine need and have not yet reached the stage where home ownership is a real possibility. On the other hand, our subsidized home ownership schemes are designed to meet the increasing aspirations of a high proportion of our low and middle income families to own their own homes. In fact, we will build over 175 000 Home Ownership and Sandwich Class Housing flats by 2001, a significant increase on last year’s announced target. Loans will also be provided to over 16 000 families to help them buy their own homes in the private sector. We believe that this home ownership programme for over 190 000 families is not only important in meeting increasing demand from individual families, but is also desirable in itself as a means of fostering social stability in Hong Kong. I sincerely hope that we can make up lost ground in achieving our original target of "just under 60%" for home ownership by 2001.

I would like to acknowledge the views of some Members in support of the sale of public rental flats to existing tenants as a means of increasing home ownership. We will certainly examine ways to make it easier for tenants of public rental flats to own their own homes, including the option of selling public rental flats to existing tenants.

I would emphasize that the increase in our subsidized home ownership programme will not be at the expense of public rental housing production. Based on present targets, the public rental housing to home ownership scheme ratio by the end of this century will still be seven to three. This is a high proportion of public rental housing by international developed territory standards; even much higher, for example, than in Singapore, Taiwan or England.

Private sector

I turn now to the private sector. We rely on private sector developers to meet about 40% of our total target production of over half a million new flats over the next six years. I am fully aware of the difficulties which developers sometimes face in acquiring land and in obtaining all the government approvals required before they can deliver flats to the market. For this purpose, we have set up a Housing Project Action Team to facilitate this process for any major development ¢w major in the sense that it will contribute 500 or more flats to our production target. Developers are encouraged to approach me or my colleagues in the Housing Branch with projects where they are experiencing difficulties. Members may wish to know that we are already monitoring or fast-tracking in this way over 50 projects, involving more than 120 000 flats throughout the territory.

While we recognize and, indeed, actively support the role of the private sector in achieving our housing production targets, we must be careful to resist the Siren's calls (if I may borrow a phrase from my colleague the Financial Secretary) of those who ask us to relax significantly or even abandon our measures to contain speculation in the residential property market. As several Members have rightly pointed out, the measures introduced by the Government in June last year have successfully dampened speculation and stabilized property prices. The residential property market is now dominated by end-users who actually purchase property from developers first-hand. Developers realistically react to changed market sentiment by cutting down on prices and offering attractive sales packages and supplementary financing. Housing affordability has also improved. We are satisfied that the anti-speculation measures are achieving the desired results without undue interference in market forces. We do not intend to introduce further restrictive measures, but we must still guard against the rekindling of speculation. Hence, we will keep a close watch over developments and will continue to review the situation on a regular basis.

Meanwhile we have received proposals to increase the operational flexibility of both developers and purchasers so as to facilitate property transactions within the existing regulatory framework. We are examining these proposals with great care, to see whether some operational flexibility can be allowed, without giving rise to speculative activities and without compromising the integrity of our price-stabilization package.

Long Term Housing Strategy

Mr President, I shall shortly be embarking on a review of our Long Term Housing Strategy. I am pleased that several Members have welcomed this. Let me say a few words about the scope of the review. We will consider all major aspects of housing policy, and will determine the way in which we manage the enormous resources required to provide decent and affordable housing for the community. To give some key examples:

1. we will project housing production targets forward for the next 10 years to 2005-2006, taking into account our latest projections of housing demand;
2. we will examine carefully the appropriate split between flat production in the private, public rental and subsidized home ownership sectors;
3. we will review public housing policies regarding eligibility, subsidy, redevelopment and clearance; and
4. we will identify gaps in provision.

We have already set up an inter-departmental working group in the Housing Branch to conduct research and produce background materials and papers. To give the review direction and focus, a high-level steering group will shortly be formed, chaired by myself, and including people from the public and private sectors in their personal capacities. Very shortly, I shall invite Members of this Council to meet with me and to give their views on possible future direction. Views from interested groups will also be welcomed. We will then consider all these views during our review before compiling a report for public consultation. Mr President, this review will take time to complete, but it is an important exercise. We must get it right. I look forward to lively and constructive debates on all the issues involved over the months ahead.

Thank you, Mr President.

SECRETARY FOR SECURITY (in Cantonese): Mr President, the security of our community underpins the stability and prosperity of Hong Kong. The people of Hong Kong attach great importance to the maintenance of law and order and public safety. The Government shares this sense of importance. There should be no doubt about the Government's determination to preserve Hong Kong's status as a well-ordered society, subject to the rule of law. We shall do our utmost, now and beyond 1997, to achieve the highest possible standard in fighting crime, and in protecting the lives and properties of the people. We shall spare no effort in maintaining the confidence and respect which our disciplined services enjoy in the community. I shall take the opportunity today to share with Honourable Members our policy directions, and the plans and actions to which we are committed in order to achieve specific objectives.

POLICY DIRECTIONS

Our policy directions are mainly concerned with three aspects. First, we aim to live up to the growing aspirations of our community. Second, we aim to keep up with the times by maximizing efficiency through management reform and increased use of modern technology. Third, we aim to work with the Chinese side to resolve certain key issues for a smooth transition in 1997.

LIVING UP TO THE COMMUNITY'S ASPIRATIONS

Combatting Crime

When most of us have gone home in the evenings to our families, or when we go out during holidays to enjoy ourselves, these are the very hours when our policemen are actively tackling crime on the streets. There are 21 000 police officers, comprising 78% of the Police Force, involved in front-line operational duties. Apart from policemen seen in their uniforms walking the beat or on operational patrols, many of them are working in plain clothes in the prevention and investigation of criminal activities. Yet, others are performing essential tasks such as anti-illegal immigration operations at the border, or pursuing smugglers out at sea. Nevertheless, the Government perceives clearly the wish of the community to have more visible police presence on the streets to fight crime and to deter potential offenders. As the Governor pointed out in his policy address, we now have an extra 800 police officers on the streets compared with 1992. We are on schedule to meet last year's Policy Commitment to deploy an additional 400 police officers for front-line duties. A further 220 will also join the front-line in 1996-97.

Although the overall crime rate in the past three years has increased by about 5%, the violent crime rate, unlike that in other metropolitan cities, has actually fallen by some 11%, and the number of armed robberies has dropped by a remarkable 62%. There is of course no room for complacency. This year, we have strengthened the manpower of the Organized Crime and Triad Bureau and the Criminal Intelligence Bureau. Next year, we will provide considerable resources to strengthen the anti-triad units in all police regions and districts. These measures, together with the enactment of the Organized and Serious Crimes Ordinance by this Council, should enable the Police Force to break the back of organized crime syndicates.

Some Members have expressed their concern on the increases in pickpocketing, syndicated shopthefts and juvenile crimes. Let me assure you that the police will continue to pay particular attention to detecting and preventing such crimes, with their additional resources and better criminal intelligence capability. As regards juvenile crime, we published in May this year the Report on the Research on the Social Causes of Juvenile Crime by the University of Hong Kong which was commissioned by the Fight Crime Committee. We have received feedback from the community and concerned groups, and are now drawing up an action plan to implement the recommendations arising from the Report, which cover educational, social welfare, correctional, police and research aspects. This action plan will be ready by the end of the year. I am confident that with the co-ordinated efforts of the many government departments and non-governmental organizations involved, the problem of juvenile crime will be kept under control.

Fire and Ambulance Services

Apart from maintaining the order and safety of our streets, it is also the community's wish to strengthen the Government's capabilities to safeguard lives and properties from fire and other hazards. We shall be providing an additional 66 posts to reinforce the staff at existing fire stations, and will be adding a further 161 posts to man two new fire stations in 1996-97. We will also be introducing new legislation in this Session to enhance fire prevention and protection in old commercial buildings. To enable us to better meet our performance targets for responding to emergency ambulance calls, we have just completed a consultancy study on our ambulance service. We are already beginning to implement the recommendations from that study, and expect to see improvements in the service next year.

Illegal Employment

No less than six Members called for stronger actions against illegal employment, which undermines our immigration control and threatens the employment opportunities of our residents. We are determined to take resolute action to combat the problem. So far this year, we have already increased the number of raids by 86% over the same period last year, leading to an increase of arrests of employers by 12% and illegal workers by 19%, and an increase in prosecution by 6% for employers and 54% for illegal workers. With the doubling in strength of the Immigration Department Task Force to 92 officers last month, we will be able to carry out more targeted raids in the coming months.

We will also be introducing a number of administrative and legislative changes over the next few months to make it easier to prosecute and convict offenders, especially unscrupulous employers. These measures include the introduction of the prefix "W" to identity cards issued to foreign domestic helpers to enable easier identification of their status; requiring contract workers to surrender their identity cards to the Immigration Department for cancellation at the end of their contracts; and requiring employers to inspect contract worker's travel documents to make sure that they can be legally employed before offering them any employment. Our proposal to increase the level of fines for illegal employment and other immigration offences has been submitted to this Council, and I hope Members will give it their support. We will also continue to heighten community awareness of the illegal employment problem by having Immigration Department officials visiting and talking to business and industrial organizations, and by publicizing messages against illegal employment through Announcements of Public Interest and other publicity materials. I join Members' appeal to the public to help us by reporting illegal employment activities to the Immigration Department through their telephone and fax hot lines.

Correctional Services

As we step up our enforcement action against crime and illegal employment, we will face increasing pressure on accommodation in our correctional institutions. Overcrowding in our prisons has been a long-standing problem. Unfortunately, it is still with us today despite the addition of 970 custodial places since the beginning of 1994. In the coming three years, we plan to increase penal accommodation by at least 1 000 places. This will provide some relief not only to the crowded conditions in our prisons, but also to the pressure on staff. We will continue our search for additional penal accommodation in future.

A modern and humane correctional service is not just about locking up people in gaol. It is also about reform and rehabilitation. The Correctional Services Department already runs a variety of rehabilitation programmes, particularly for drug addicts and young offenders, successfully. This year, we have legislated for a post-release supervision scheme, which is aimed at reintegrating those who have completed their terms of imprisonment back into society. Next year, we plan to introduce legislation to give the Board of Review. Long Term Prison Sentences statutory powers to deal more effectively with prisoners serving long or indeterminate sentences.

Image of the Disciplined Services

Before I turn to the second policy direction, I feel obliged to respond to Members' concern about corruption in the disciplined services, with particular reference to the Police Force. We have, over the years, successfully built up a clean and honest reputation for our disciplined services. We are determined to keep it that way and the community expects us to do no less. Although there are a few bad eggs who committed corruption and other crimes, this should not tarnish the reputation and image of the disciplined services as a whole. The Independent Commission Against Corruption (ICAC) will investigate all corruption cases vigorously, and has recently deployed 30 additional staff to deal with corruption in disciplined services. Members may also be assured that the Police Force management is fully committed to combatting corruption and other illegal practices. Indeed, some of the recently reported corruption and criminal cases were uncovered as a result of police investigations. A high-level Police Force Anti-Corruption Strategy Steering Committee has recently been set up, with ICAC participation, to develop a code of ethics and enhance anti-corruption training. Corruption prevention is given particular attention in the review of police procedures and at all levels of training. Internal guidelines are issued to commanders to help them identify and monitor police officers who, because of their dubious lifestyles, are more prone to corruption. And, in response to the invitation of this Council's Security Panel, the Commissioner of Police, Mr HUI Ki-on, and I will discuss all these issues more in depth with Members at the panel meeting on 13 November.

I fully agree with Members that a credible police complaints system will increase public confidence in our Police Force. We have introduced a series of measures to enhance the transparency of the system; for example, by empowering the Independent Police Complaints Council (IPCC) to interview witnesses, by installing closed circuit television and introducing video or tape recording of statements taken in the offices of the Complaints Against Police Office (CAPO). We are also conducting a comparative study of the police complaints systems in other jurisdictions to learn from their experience, and to see what further improvements might be made. A joint IPCC/Police/Security Branch study team has just completed its visit to five North American police jurisdictions; a further round of study visits to other jurisdictions will take place early next year. At the same time, we are discussing with the IPCC arrangements to implement the Lay Observers Scheme, under which investigations by CAPO will be observed by upright citizens, and arrangements to second a suitable directorate grade Administrative Officer to the IPCC to enable it to review and improve CAPO procedures. We are also drafting a bill to give statutory status to the IPCC. I expect to see all these efforts bearing fruit in the coming year.

I am confident that most of our men and women colleagues in the disciplined services will do nothing to compromise the well-deserved respect which they enjoy in the community. They are highly professional, often risking their own lives to protect the community from crime and other adversities. They deserve our thanks and encouragement for doing such a good job.

KEEP ABREAST WITH THE TIMES: GREATER EFFICIENCY AND BETTER SERVICES

In a world of increasing sophistication and rising expectations, there is the inevitable demand for quality service. That brings us to our second policy direction of keeping abreast with the times. All the departments under the Security Branch are committed to a continuous search for new and better ways to deliver their services to the public with greater effectiveness and efficiency.

The Immigration Department is conscious of the need to look for new ways to reduce the processing time for its document and control procedures, so as to bring more convenience to the public in their application for travel documents and make travelling through our control points a less onerous experience. The Department has already taken a number of measures to simplify the visa application procedures to reduce processing time. Since October 1994, we have allowed applications for visas for residence, investment, employment and study to be directly submitted to the Hong Kong Immigration Department. In February 1996, this convenience will be extended to visit and transit visas from most countries. The simplification of procedures has also allowed us to cut down on the processing time for permits of Taiwanese visitors from seven to five working days. Part of the strategy to improve efficiency is the wider application of modern information technology. The installation of a new computer system and optical readers at our immigration control points save 20 seconds of processing time for each traveller who has a machine readable passport, and save four seconds for holders of Hong Kong identity cards. We are also studying the implementation of a "smart card" system, which will enable travellers to finish the procedures at our control points even more quickly. Streamlining procedures has also reduced the time required to process applications for naturalization as British Dependent Territories citizens from 12 months to eight months. Upon the full implementation of the Information Systems Strategy, we expect to save some 600 posts.

The Fire Services Department is introducing new equipment to improve its communication and control system. This includes a digitized Geographic Information System that will allow fire appliances to obtain geographical information about the location of fires more quickly and accurately, and thus to respond faster to emergency calls. The Department is also developing a Fire Protection Information System, which will improve the communication and coordination between the Fire Protection Bureau and regional offices on fire prevention advice. One of the aims of our recent ambulance service consultancy study is to develop personal computer-based computer modelling techniques for future service planning. This is now being implemented.

The Correctional Services Department has also taken steps to modernize its operation. We have recently completed the installation of the Penal Records Information System, which has brought about efficiency improvements in its records system. We are also modernizing the security systems in our penal institutions to provide a more secure environment and improve the operational effectiveness of the Department.

We accord the highest priority to building a modern and efficient Police Force. The Police Management Review, begun in 1992 and completed in 1994, critically examined ways to improve the command structure, the use of modern technology and the manning levels of the entire Police Force so that it will be properly prepared and equipped to meet future challenges. We have made a start to implement some of the recommendations arising from the Review this year; we will take forward the rest in the next few years. Furthermore, by implementing the Police Information Technology Strategy, work currently done manually will be done by computers. This will allow even more police officers to be re-deployed for operational duties in the future. Plans are also being formulated to modernize report and interview rooms in police stations, so as to provide a more pleasant environment for members of the public to report crime.

FACING THE FUTURE: 1997 AND BEYOND

In addition to keeping abreast with the community's aspirations, we are actively planning for our future. We are committed to resolving some of the key transitional issues, working closely with our Chinese counterparts. Concern was expressed by Honourable Members on the progress of discussions with the Chinese side on the right of abode, on the issue of the Hong Kong Special Administrative Region (HKSAR) passport and on travel convenience for Hong Kong residents in the future. These are matters of great importance to our community, and their early and satisfactory resolution will enhance confidence. We will continue to work with the Chinese side to assure other countries that the HKSAR passport will be a first class document, that it will be up to international standards and can be accepted internationally as a secure travel document. Indeed, we shall soon be seeking funds from this Council to develop a sophisticated computer system to enable HKSAR passports to be issued from 1 July 1997. We will be working hard to secure arrangements that will give the greatest possible degree of travel convenience for Hong Kong residents after 1997. We will continue our efforts to resolve the right of abode issue in discussion with the Chinese side, with the object of enabling Hong Kong people to retain or acquire their right of abode through simple procedures.

In addition to these important immigration issues, we will also embark on many other plans that are closely related to a smooth transition in 1997. Let me name a few of them:

First, we are making preparations for a smooth handover of defence responsibilities to the Central Government of the People's Republic of China. The People's Liberation Army of China will be responsible for the defence of the Hong Kong SAR from 1 July 1997. The agreement on defence lands, reached in the Sino-British Joint Liaison Group last year, has laid a good foundation for this. The Government and the out-going British Garrison are stepping up efforts to co-operate with the Chinese authorities to ensure that the task is completed successfully and in good time.

Secondly, we are working in close consultation with the Chinese side on a series of arrangements to combat cross-border criminal activities. We are, for example, negotiating a network of new bilateral agreements with third countries on the return of fugitive offenders which will remain in force after 1997. We are also negotiating new bilateral agreements with third countries for the provision of mutual legal assistance in criminal matters. Subject to further consultation with the Chinese side, we will be putting legislation to this Council to bring these new agreements into force as soon as possible.

Thirdly, we will continue with our liaison with the Chinese authorities, through Interpol and through border liaison channels, to improve our joint efforts in combating cross-border crimes, smuggling, illegal entry and other immigration offences. The results are evident, for example, in the significant reduction of stolen luxury vehicles in recent years, in the swift and successful cracking of the Macau jetfoil robbery case a few months ago, and in the substantial reduction in the number of pregnant Two-Way Permit holders coming to give birth in Hong Kong in the first nine months of this year. We are engaged in discussions with the Guangdong authorities on the boundary administration of Guangdong and Hong Kong, so as to clarify ambiguities on the ground and at sea, and thus achieve a smoother working relationship with our neighbour.

Fourthly, we have just reached an agreement in principle with the Chinese side on the negotiation of arrangements with third countries on the transfer of sentenced persons which will continue beyond 1997. These will replace current United Kingdom-based arrangements under which persons sentenced to imprisonment in another territory can, subject to the agreed conditions, return to their home country to serve out their prison terms.

Mr President, I shall now turn to two specific issues over which Honourable Members, and indeed the community, have expressed particular concern.

Combating Drug Abuse

Tackling drug abuse, particularly by young persons, is a top-priority issue for the Government. Despite a drop in the number of newly reported young drug abusers from 1 600 in the first half of last year to 1 108 in the same period this year, there is no room for complacency, as the total number of reported young drug abusers is still on the rise. Since the Governor's Beat Drugs Summit in March this year, we have pursued vigorously the commitments made in our Forward Action Plan, and the many useful ideas suggested by the Summit participants. The second quarterly report on the progress made in implementing these plans and suggestions will be published shortly; Members will then be able to see clearly how much we have done. But, in response to some of the specific concerns expressed by Members, the Medical Council and the Pharmacy and Poisons Board are discussing possible new measures to further tighten control on malpractice and the illegal sale of drugs among the medical and pharmacy professions. To clamp down on the sale of soft drugs to young persons, the number of pharmacy inspections per month has been increased from 560 to 700, and a special task force to help the prosecution of offending drug retailers has also been set up. Maximum penalties for the illegal or improper sale of drugs by pharmacies have been raised recently. We have strengthened the Police Narcotics Bureau, and updated the legislation against the laundering of drug proceeds to enable better enforcement action against drug traffickers. The Education Department has taken a number of steps to promote preventive education, targeting not only at students but also at parents. The Department is also carrying out a programme of assistance and training for schools and teachers to enable them to perform more effectively their essential task of educating their students to stay away from drugs. The Social Welfare Department has also set up a team of specially trained social workers to help young drug abusers.

On the treatment and rehabilitation front, the Hospital Authority has established six substance abuse clinics this year. We are proceeding with the establishment of two additional residential treatment centres for young opiate abusers, and a new counselling centre in the New Territories for psychotropic substance abusers.

Many Members have welcomed the Beat Drugs Fund announced by the Governor in his policy address. This will provide a substantial additional source of funding for worthwhile anti-drug projects. All non-governmental organizations, including Christian drug rehabilitation centres, will be able to apply to the Fund for project financing. I am confident that the cumulative effect of all these measures will have a considerable impact, and save more of our young people from the dangers of drug abuse.

Vietnamese Migrants

Finally, let me respond to some Members' concern on the Vietnamese migrants problem. We share the community's wish to see an early end to this burden on Hong Kong. We remain fully committed to resolving this problem as soon as possible.

All the the Vietnamese migrants in our detention centres have come after June 1988, when we began the screening policy. They have gone through scrupulously thorough screening procedures, and have been determined to be non-refugees. Under the Comprehensive Plan of Action (CPA), which was agreed in 1989 by over 70 countries (including China) as the strategy to deal with the migrants problem, all screened-out non-refugee migrants must return to Vietnam. There is no other course. Indeed, over 47 000 migrants have since returned to Vietnam through the voluntary and orderly repatriation programmes, rather than wasting their lives in the camps.

Sadly, false hopes, I repeat, false hopes of overseas resettlement have stalled the voluntary repatriation programme in recent months. Any suggestion that adds to such false hopes but without any realistic prospect of their fulfilment will clearly harm our efforts to repatriate the remaining 21 000 Vietnamese migrants. We have already seen the damage done by legislative initiatives in the United States (US) Congress. Any suggestion that the United Kingdom should take all the the Vietnamese migrants if any of them should still be in Hong Kong by July 1997 will exacerbate the damage, and work against what we ¢w the Government, the people, and indeed the international community ¢w all want to achieve.

We are experiencing a trough in the voluntary repatriation programme, but that is no reason to be despondent. We are liaising closely with the United Nations High Commissioner for Refugees (UNHCR) and the United States Administration which, we understand, is working hard to repair the damage done by the United States Congressional initiatives. As I now speak, a United States Administration delegation is in Hanoi to discuss with the Vietnamese Government measures to regenerate voluntary repatriation. We hope that repatriation under the CPA will pick up again before too long. In the meantime, we will step up the pace of the Orderly Repatriation Programme. This is no easy task, as events in the last few months have demonstrated. Our Correctional Services and Police officers, who have displayed exemplary professionalism, courage and restraint in carrying out these operations in often dangerous circumstances, deserve a vote of gratitude from the community.

A few Members have also questioned the port of first asylum policy. I understand that a motion debate on this issue may be moved shortly, and I will respond in full on that occasion. But let me make just one point at this stage: the most pressing problem we face now is not new arrivals, but how to return to Vietnam the 21 000 migrants who are already here. Abolishing the port of first asylum policy will not help us do that at all. On the contrary, it will tarnish Hong Kong's reputation as a humane society, and will do nothing in our efforts to enlist international support to resolve our current difficulties. This is certainly not what we wish to see, especially when what is most needed is a concerted effort by the UNHCR and the CPA countries to achieve the early repatriation of all screened-out Vietnamese migrants. Frustration and a sense of failure at the current unsatisfactory state of affairs is understandable, but that emotional response is no substitute for clear-headed thinking on what is the best course of action to achieve our common objective.

Concluding Remarks

Mr President, I hope I have said enough to demonstrate that, in the Security

programme areas, we are a forward-looking administration, with clearly defined policy directions and achievable objectives and commitments. Our planning horizon extends well beyond 1997. We have set ourselves long-term goals and we look to the support of this Council and the community in achieving them. We take constructive criticisms in a positive spirit, because we are dedicated to achieving the highest standard of public service. Above all, the men and women of the disciplined services take pride in serving their own community, not only now but well into the 21st century.

Thank you, Mr President.

CHIEF SECRETARY: Mr President, this afternoon my colleagues have attempted to respond positively to the many comments and suggestions made by Honourable Members during this debate. I hope it will be clear from their speeches that far from being a "sunset Government", we have made significant progress in a wide range of government activities since 1992. Furthermore we have ambitious plans to improve both the range and quality of our services in the years to come. As some Members have recognized, these programmes are set out in impressive detail each year in the Policy Commitments issued by each Branch Secretary, and reported on each year in our Progress Report. In the later report, we have acknowledged both our successes and our failures as part of a sustained effort to make the Administration more open and more accountable. I believe we are unique in the world in doing this.

As my colleagues have already noted, the Policy Commitments provide the answers to many of the complaints and criticisms made in this Council last week. In particular, they show that our programmes extend well into the future, beyond 1997, often into the next century. This should not be surprising. Hong Kong will not come to an end on 30 June 1997. Nor will its Administration. Even though there may be a few changes of personnel ¢w as the Governor has often pointed out, there must be at least one! ¢w the vast majority of civil servants will be at their desks, doing the same jobs and implementing the same policies, on the next working day after the transfer of sovereignty.

Co-operation with the Legislative Council

Many Members commented on what the Governor had to say about co-operation between the executive and the legislature. Unfortunately, most focused on the three sentences in which he referred to his constitutional power to refuse assent to legislation, and ignored the context into which he put this. Some even complained about "executive dictatorship", a concept which I find rather hard to accept when the Administration has no votes at all in this Council.

Let me remind Members what the Governor actually said. He made it clear that the Administration is committed to working together with Members of this Council on behalf of the community we both serve. But he also recognized that the buck ultimately stops with him, and that if he honestly felt that it was necessary in the best interests of Hong Kong, he would have to make use of the constitutional powers granted to him. This was no more than a recognition of the constitutional position. And it certainly was not meant as a threat.

Many Members have expressed their concern that the Administration is not serious about co-operating with this Council, and that we do not take enough account of Members' views and suggestions. This is simply not true. We are fully committed to co-operating with this Council. How could it be otherwise, when we have to obtain your approval for every one of our legislative and financial proposals, without a single vote of our own to rely on? Almost every piece of legislation enacted by this Council reflects the valuable input of Members. Many of the policy commitments are based on the initiatives and priorities of this Council. Of course, we may not always be able to accept every point that Members put to us. In such cases, we have a duty to do our best to explain our position. But it is wrong to suggest that the Administration must be at fault whenever it does not fully meet the Legislative Council's wishes. Neither of us can claim to have a monopoly of wisdom. The important thing is that we should respect each other's constitutional role, and seek to foster a better mutual understanding and co-operation. Co-operation is, after all, a two-way process. At the end of the day, the executive has to decide what proposals it wishes to put forward, and the legislature has to decide whether or not it is prepared to accept them.

Two specific areas in which the Governor suggested that co-operation would be useful were in considering whether there was a need for more formal channels of communication between the executive and this Council, and in relation to the programme of legislation that we have put forward for the 1995-96 Session. I have already written to the Chairman of the House Committee to set out the issues relating to the handling of government business in the Legislative Council that we would wish to discuss with Members. I understand that the Subcommittee on Procedural Matters will be considering these next week, and I look forward to receiving their views. But I want to repeat now what the Governor said three weeks ago ¢w our hope is that we can move forward by consensus whenever possible, rather than on parallel tracks, and we will spare no efforts to try and achieve this consensus.

Co-operation with China

I turn now to our relationship with China. Many Members have called for intensified efforts from the Administration as we move into the final phase of the transition. And rightly so. With only 20 months now left before 30 June 1997, there are still many issues important to people's livelihood, and to the economic and social developments of Hong Kong, they need to be resolved quickly. Let me re-affirm our commitment to co-operate fully with China to ensure that these issues are resolved and that there is as smooth a transition as possible.

It goes without saying that we will continue to work towards the successful resolution of all items still on the Joint Liaison Group (JLG) agenda. In this respect, I am glad that we have made some progress in JLG XXXIV, which has just ended in Peking earlier today. On economic issues, we reached full agreement on the Intellectual Property regime to be applied to Hong Kong after 1997, including the localization of Hong Kong's Registered Designs law, Patents law and Copyright law and the continued application of the Patent Co-operation Treaty after 30 June 1997. While CT9 still remains to be resolved, the Foreign Ministers agreed last month that both sides should intensify their efforts to develop Hong Kong's container port. We will continue to work for a satisfactory resolution of this long-standing problem.

On legal issues, we agreed on the continued application to Hong Kong of two important civil aviation treaties on the carriage of goods by air, on one international convention on telecommunications which completes the arrangements for guaranteeing Hong Kong's continued participation in the International Telecommunication Union, and on a bill to localize the United Kingdom legislation on whaling. We have also agreed a model text for bilateral treaties relating to the transfer of sentenced persons. Much still remains to be done, but I am sure it is the wish of both sides to intensify co-operation so that the important issues still remaining on the agenda can be resolved.

Many Members also spoke of the need to co-operate fully with the Preparatory Committee. As the Governor has made clear in his policy address, we will offer every practical assistance to the Preparatory Committee. The Committee will play an important role in the establishment of the future Special Administrative Region Government. It is important, therefore, that there should be close co-operation between the Hong Kong Government and the Preparatory Committee. We will do our best to ensure that this is the case.

Some Members expressed concern that the Preparatory Committee might develop into a second power centre or that civil servants might be placed in a situation where their loyalties were divided. I would like to reassure Members that we too are aware of these potential problems. In co-operating with the Preparatory Committee, we will ensure that whatever we do is fully consistent with the Joint Declaration and the Basic Law, that the Hong Kong Government's power of administration is not compromised in any way and that civil servants are not subject to conflicting loyalties. Within these parameters, however, we are prepared to be flexible and we stand ready to offer any assistance necessary to ensure a smooth and efficient transition. We have, in fact, already begun to discuss with the Chinese side what sort of assistance the Preparatory Committee will require. I can assure Members that our dealings with the Preparatory Committee will be based on the important principles of openness and transparency, and that members of the community and Members of this Council will be briefed regularly on our exchanges.

Let there be no misunderstanding. This Administration will continue to govern Hong Kong until 30 June 1997. There can be no question of a parallel government, or of the Hong Kong Government shirking its responsibility. We are fully committed to taking all action necessary to ensure that after l997 the Hong Kong SAR enjoys the high degree of autonomy pledged to it in the Joint Declaration and the Basic Law.

The Civil Service

I turn now to the Civil Service. Only a few Members felt it necessary to comment on the Civil Service in last week's debate. I very much hope that this was because Members of this Council recognize that the Civil Service is performing well, and that it is maintaining its high standards of service to the community. Indeed, some Members spoke highly of the Civil Service's professionalism.

A few Members also referred to the need to maintain morale in the Civil Service, and I was grateful that this issue was recognized. I am sure that Members agree that maintaining a strong Civil Service is critical to achieving a smooth transition in 1997. We recognize of course that many civil servants are worried about 1997. One way to alleviate these worries is for them to get to know their Chinese counterparts better ¢w at all levels. Some Members still seem to believe that there is limited contact between Hong Kong and People's Republic of China officials. The truth is very different. At working level, many departments have literally daily contact with the Chinese side on both day to day and more important issues. And a large and increasing number of officials from both sides visit the territory of the other on familiarization tours, fact-finding missions and sponsored visits.

Nevertheless, whilst many of our Secretaries and Heads of Departments have working contacts with their Chinese counterparts, we accept that there is scope for these to be broadened and deepened. We were therefore very pleased when the two Foreign Ministers announced last month that there would be informal get-togethers, in Hong Kong, between senior Hong Kong civil servants and officials of the Chinese Government. This will enable both sides to get to know each other better, not only in the work context but also at a personal level. Both sides are keen to begin this process, and we have now agreed with the Chinese side on the detailed format of the get-togethers. I hope that it will be possible for the first meeting to take place later this month.

Another way of maintaining morale in the Civil Service is to ensure that we are well prepared for the transition, in terms of our understanding of China and its systems and by increasing the use of Chinese, including Putonghua. We have therefore embarked on a major programme to provide training on China related issues and to improve our ability to work and communicate in Chinese. Our aim, as Members will know, is to become a biliterate and trilingual Civil Service. But it is very important that, in our quest to upgrade our standard of Chinese, we do not allow our high standard of English to slip. And we must ensure that our expatriate colleagues are given the opportunity to continue to contribute to Hong Kong's development. We have some way to go before we achieve our goal. But Members' approval last week of $112 million for the purchase of computer equipment and the provision of related training will help us considerably.

Corruption

Finally, I would like to say a few words about corruption and the work of the Independent Commission Against Corruption (ICAC). Members made various comments about the current and future role of the ICAC, its powers, transparency, accountability and resources. The public has also told us through surveys that they are concerned about the future of the ICAC beyond 1997. I would like to make three points:

1. The Basic Law provides for the continuation of the ICAC after 1997;
2. We are determined to continue to fight corruption in Hong Kong both before and after 1997, as successfully as we have done in the past 20 years; and
3. The ICAC was established as a result of public demand in l974. Continued public support will see the Commission through 1997 and into the 21st century.

The Commissioner of the ICAC recently visited the Hong Kong and Macau Affairs Office in Peking. Officials there made it clear that the Chinese Government wanted the fight against corruption in Hong Kong to continue vigorously both before and after l997, to maintain confidence in Hong Kong and ensure that it continues to be an international financial and business centre. They also stressed the importance of co-operation between the ICAC and the anti-corruption authorities on the mainland, a view entirely shared by the Commissioner.

The Administration shares Members' views that the ICAC must have sufficient powers to combat corruption. As Members will know, these powers were reviewed in 1994 by the ICAC Review Committee. The Committee's recommendations were accepted by the Government and the legislative proposals necessary to put them into effect are the subject of a Bill currently before this Council. The recommendations of the Committee for increased transparency in the ICAC and for changes to some of the ICAC's Advisory Committees were also agreed and are being implemented. In particular, Members of this Council will continue to be appointed to the Advisory Committee on Corruption, the main advisory committee for the ICAC.

The Commissioner believes that, despite the increase in reports of corruption, he has sufficient resources for the time being. If he sees a need for additional resources, he will seek them. Corruption in the public sector, particularly in the disciplined services, will continue to be the prime concern of the Commission. But the education of young people about the evils of corruption is not being overlooked. The ICAC will soon be holding a major conference to launch a Youth Ethics Programme. The Administration will continue to place great importance on the work of the ICAC.

To conclude, Mr President, let me re-affirm the Administration's determination to work constructively with Members of this Council and with the community in achieving the ambitious goals we have set ourselves. Together we can demonstrate that Hong Kong is ready for a fully elected legislature, a legislature that can contribute towards stability and a smooth transition whilst at the same time creating wealth so that we can continue to make social progress. This must be our common objective. Members of this Council play a vital role in our system of government and my colleagues and I look forward to working closely with all Members as part of an Administration in which hopefully the sun never sets.

Thank you, Mr President.

22.16 pm

PRESIDENT: At the request of Members, I now suspend the sitting briefly for five minutes to enable Members to deliberate in private before they proceed to vote on the Motion of Thanks.

22.30 pm

PRESIDENT: Council will now resume.

Question on the motion put.

Voice vote taken.

THE PRESIDENT said he thought the "Ayes" had it.

MR ALLEN LEE: Mr President, I claim a division.

PRESIDENT: Will Members please first register their presence by pressing the top button and then proceed to cast their votes by pressing one of the three buttons below?

PRESIDENT: Before I declare the result, Members may wish to check their votes.

PRESIDENT: Are there any queries? The result will now be displayed.

Mr Martin LEE, Mr Albert CHAN, Mr CHEUNG Man-kwong, Mr Michael HO, Dr HUANG Chen-ya, Miss Emily LAU, Mr LEE Wing-tat, Mr Fred LI, Mr James TO, Dr Samuel WONG, Dr YEUNG Sum, Mr WONG Wai-yin, Miss Christine LOH, Mr Andrew CHENG, Mr Anthony CHEUNG, Mr David CHU, Mr Albert HO, Mr LAW Chi-kwong, Mr LEE Kai-ming, Miss Margaret NG, Mr SIN Chung-kai, Mr TSANG Kin-shing, Dr John TSE and Mr YUM Sin-ling voted for the motion.

Mr Allen LEE, Mrs Selina CHOW, Mr Edward HO, Mr Ronald ARCULLI, Mrs Miriam LAU, Mr Frederick FUNG, Mr Henry TANG, Dr LAW Cheung-kwok and Mr LO Suk-ching voted against the motion.

Dr Philip WONG, Mr CHAN Kam-lam, Mr CHAN Wing-chan, Miss CHAN Yuen-han, Mr CHEUNG Hon-chung and Mr IP Kwok-him abstained.

THE PRESIDENT announced that there were 24 votes in favour of the motion and nine votes against it. He therefore declared that the motion was carried.

ADJOURNMENT AND NEXT SITTING

PRESIDENT: In accordance with Standing Orders, I now adjourn the Council until 2.30 pm on Wednesday 8 November 1995.

Adjourned accordingly at twenty-five minutes to Eleven o'clock.

Note: The short titles of the Bills/Motions listed in the Hansard, with the exception of the motions moved by the Honourable Ronald Arculli under the Interpretation and General Clauses Ordinance, the Costs in Criminal Cases Bill, the Employment (Amendment) (No. 4) Bill 1995, the Lands Tribunal (Amendment) Bill 1995 and the Bank Notes Issue (Amendment) Bill 1995, have been translated into Chinese for information and guidance only; they do not have authoritative effect in Chinese.