OFFICIAL RECORD OF PROCEEDINGS

Wednesday, 22 November 1995

The Council met at half-past Two o'clock

MEMBERS PRESENT

THE PRESIDENT THE HONOURABLE ANDREW WONG WANG-FAT, O.B.E., J.P.

THE HONOURABLE ALLEN LEE PENG-FEI, C.B.E., J.P.

THE HONOURABLE MRS SELINA CHOW LIANG SHUK-YEE, O.B.E., J.P.

THE HONOURABLE MARTIN LEE CHU-MING, Q.C., J.P.

DR THE HONOURABLE DAVID LI KWOK-PO, O.B.E., L L.D. (CANTAB), J.P.

THE HONOURABLE NGAI SHIU-KIT, O.B.E., J.P.

THE HONOURABLE SZETO WAH

THE HONOURABLE LAU WONG-FAT, O.B.E., J.P.

THE HONOURABLE EDWARD HO SING-TIN, O.B.E., J.P.

THE HONOURABLE RONALD JOSEPH ARCULLI, O.B.E., J.P.

THE HONOURABLE MRS MIRIAM LAU KIN-YEE, O.B.E., J.P.

DR THE HONOURABLE EDWARD LEONG CHE-HUNG, O.B.E., J.P.

THE HONOURABLE ALBERT CHAN WAI-YIP

THE HONOURABLE CHEUNG MAN-KWONG

THE HONOURABLE CHIM PUI-CHUNG

THE HONOURABLE FREDERICK FUNG KIN-KEE

THE HONOURABLE MICHAEL HO MUN-KA

DR THE HONOURABLE HUANG CHEN-YA, M.B.E.

THE HONOURABLE EMILY LAU WAI-HING

THE HONOURABLE LEE WING-TAT

THE HONOURABLE ERIC LI KA-CHEUNG, J.P.

THE HONOURABLE FRED LI WAH-MING

THE HONOURABLE HENRY TANG YING-YEN, J.P.

THE HONOURABLE JAMES TO KUN-SUN

DR THE HONOURABLE SAMUEL WONG PING-WAI, M.B.E., FEng., J.P.

DR THE HONOURABLE PHILIP WONG YU-HONG

DR THE HONOURABLE YEUNG SUM

THE HONOURABLE HOWARD YOUNG, J.P.

THE HONOURABLE ZACHARY WONG WAI-YIN

THE HONOURABLE JAMES TIEN PEI-CHUN, O.B.E., J.P.

THE HONOURABLE LEE CHEUK-YAN

THE HONOURABLE CHAN KAM-LAM

THE HONOURABLE CHAN WING-CHAN

THE HONOURABLE CHAN YUEN-HAN

THE HONOURABLE ANDREW CHENG KAR-FOO

THE HONOURABLE PAUL CHENG MING-FUN

THE HONOURABLE CHENG YIU-TONG

THE HONOURABLE ANTHONY CHEUNG BING-LEUNG

THE HONOURABLE CHEUNG HON-CHUNG

THE HONOURABLE CHOY KAN-PUI, J.P.

THE HONOURABLE DAVID CHU YU-LIN

THE HONOURABLE ALBERT HO CHUN-YAN

THE HONOURABLE IP KWOK-HIM

THE HONOURABLE LAU CHIN-SHEK

THE HONOURABLE AMBROSE LAU HON-CHUEN, J.P.

DR THE HONOURABLE LAW CHEUNG-KWOK

THE HONOURABLE LEE KAI-MING

THE HONOURABLE LEUNG YIU-CHUNG

THE HONOURABLE BRUCE LIU SING-LEE

THE HONOURABLE LO SUK-CHING

THE HONOURABLE MOK YING-FAN THE HONOURABLE MARGARET NG

THE HONOURABLE NGAN KAM-CHUEN

THE HONOURABLE SIN CHUNG-KAI

THE HONOURABLE TSANG KIN-SHING

DR THE HONOURABLE JOHN TSE WING-LING

THE HONOURABLE MRS ELIZABETH WONG CHIEN CHI-LIEN, C.B.E., I.S.O., J.P.

THE HONOURABLE LAWRENCE YUM SIN-LING

MEMBERS ABSENT

THE HONOURABLE CHRISTINE LOH KUNG-WAI

THE HONOURABLE LAW CHI-KWONG

PUBLIC OFFICERS ATTENDING

THE HONOURABLE MRS ANSON CHAN, C.B.E., J.P. CHIEF SECRETARY

THE HONOURABLE JEREMY FELL MATHEWS, C.M.G., J.P. ATTORNEY GENERAL

MR GORDON SIU KWING-CHUE, J.P. SECRETARY FOR ECONOMIC SERVICES

MR DOMINIC WONG SHING-WAH, O.B.E., J.P. SECRETARY FOR HOUSING

MRS KATHERINE FOK LO SHIU-CHING, O.B.E., J.P. SECRETARY FOR HEALTH AND WELFARE

MR JOSEPH WONG WING-PING, J.P. SECRETARY FOR EDUCATION AND MANPOWER

MR PETER LAI HING-LING, J.P. SECRETARY FOR SECURITY

CLERKS IN ATTENDANCE

MR RICKY FUNG CHOI-CHEUNG, SECRETARY GENERAL

MR LAW KAM-SANG, DEPUTY SECRETARY GENERAL

MISS PAULINE NG MAN-WAH, ASSISTANT SECRETARY GENERAL

PAPERS

The following papers were laid on the table pursuant to Standing Order 14(2):

Subject

Subsidiary Legislation	L.N. No
Boilers and Pressure Vessels (Exemption) (Consolidation) (Amendment) Order 1995	519/95
Census and Statistics (Monthly Survey of Retail Sales) (Amendment) Order 1995	520/95
Census and Statistics (Quarterly Survey of Industrial Production) (Amendment) Order 1995	521/95
Official Languages (Alteration of Text) (Money Lenders Ordinance) Order 1995	522/95
Port Control (Public Cargo Working Area) (No. 4) Order 1995	523/95
Overseas Lawyers (Qualification for Admission) (Amendment) Rules 1995	524/95
Overseas Lawyers (Qualification for Admission) (Fees) (Amendment) Rules 1995	525/95
Intestate Succession (Reckoning of Capital Value) Notice	526/95
Acetylating Substances (Control) (Amendment) Ordinance 1994 (64 of 1994) (Commencement) Notice 1995	527/95
Land Survey Ordinance (28 of 1995) (Commencement) (No. 2) Notice 1995	528/95
Road Traffic (Amendment) Ordinance 1995 (39 of 1995) (Commencement) Notice 1995	529/95
Official Languages (Amendment) Ordinance 1995 (51 of 1995) (Commencement) Notice 1995	530/95
Administration of Justice (Miscellaneous Provisions) (No. 2) Ordinance 1995 (68 of 1995) (Commencement) (No. 2) Notice 1995	531/95
Official Languages (Authentic Chinese Text) (Independent Commission Against Corruption Ordinance) Order	(C) 98/95
Official Languages (Authentic Chinese Text) (Hong Kong Industrial Estates Corporation Ordinance) Order	(C) 99/95
Official Languages (Authentic Chinese Text) (Oil (Conservation and Control) Ordinance) Order	(C)100/95
Official Languages (Authentic Chinese Text) (Homicide Ordinance) Order	(C)101/95
Official Languages (Authentic Chinese Text) (Money Lenders Ordinance) Order	(C)102/95

　 Sessional Paper 1995-96

No. 26─

AIDS Trust Fund 1994-95 Annual Accounts 　

PRESIDENT: Honourable Members, we will start the sitting with questions, however, before we proceed, I would like to remind Members again that it has previously been agreed amongst Members themselves that Question Time should normally be limited to one hour. I therefore suggest that in order to enable more Members to raise supplementaries, Members should keep their supplementary questions as short and precise as possible. In particular, they should keep the preambles of the supplementaries short, or else I will have to regard long preambles to be addresses to the Council on a question in the guise of a supplementary and rule them out of order forthwith.

ORAL ANSWERS TO QUESTIONS

Transfer of Airport Technology

1.DR SAMUEL WONG asked (in Cantonese): Mr President, since the establishment of the Provisional Airport Authority (PAA) in 1990, the bulk of the planning, design and administrative work on the new airport at Chek Lap Kok has been carried out by expatriate professionals from overseas. In view of this, will the Government inform this Council:

whether adequate training opportunities and facilities have been provided within the PAA to effect the "transfer of technology" to local professionals; and
whether, upon the scheduled completion of the new airport in the first quarter of 1998, local professionals will have received adequate training or equipped themselves with appropriate technical skills to handle the management of the airport with minimum services provided by overseas professionals?

SECRETARY FOR ECONOMIC SERVICES (in Cantonese): Mr President, the Provisional Airport Authority's employment policy is to recruit the best person for the job through open recruitment. Priority is given to appointment of permanent residents of Hong Kong given all other things being equal. The Authority only recruits from overseas in the absence of suitably qualified candidates in Hong Kong.

The Authority now has a staff team of 1 420, of which some 85% are residents of Hong Kong. Of the remaining 15%, over 90% are in the Project Division of the Authority, which has to turn to overseas recruitment mainly because of the lack of local candidates with experience in building a new airport. The vast majority of these will leave the Authority on completion of the specific project for which they are employed.

The Authority is fully aware that as an organization bearing the responsibility of planning for the construction of the new airport, it has to train up local professionals with knowledge and expertise in planning and managing the new airport. It has actively pursued this objective in the following ways.

Within the Authority, local and overseas staff are working together on an on-going basis in teams. This team work ensures that a process of cross-fertilization takes place in the daily work of the Authority whereby not only the local staff benefit by sharing the experience and acquiring the expertise and knowledge of their overseas colleagues, overseas staff also benefit by learning from their local counterparts about local planning, building and construction practices. Under this team approach, technology transfer is a natural process achieved through continuous cross-learning on the parts of both the local and overseas staff.

Moreover, the Authority has established a training unit to develop the skills, capabilities and career prospects of its employees. Training on staff management, operations, language and airport related disciplines are available to all staff. In the year 1994-95, 866 staff attended a total of 62 in-house programmes covering a wide range of subjects. In addition, selected staff were sent to conferences and seminars related to aviation and airport operation, and overseas training and attachments with airports and equipment manufacturers to up-grade their skills and knowledge. Staff are also encouraged and given financial assistance to pursue self-development studies in job-related subjects.

In 1994, the Authority initiated a graduate engineering training scheme, and currently employs 30 graduate trainee engineers. These trainees will go through a two to three years' programme with exchange training attachments with other construction companies leading to their qualification as professional engineers. This programme enables the Authority to build up its local engineering team with hands-on experience and knowledge in airport planning and construction work. The actual construction work at our new airport involves a mixture of major local and overseas companies. Local staff of the Authority therefore have ample opportunities to be exposed to the most advanced construction and systems techniques employed by international contractors, consultants and equipment suppliers. In the case of equipment supplies, the Authority has incorporated in most major equipment supply contracts a requirement for the supplier to provide training to Authority staff on operation and maintenance of the equipment concerned. This helps to ensure that the Authority would have its own team of equipment experts when the new airport comes into operation.

On opening, the Authority's responsibility is to operate and manage the new airport. Currently, plans are being drawn up to integrate the existing airport management staff of the Civil Aviation Department (CAD) into the Airport Authority. These staff, over 95% being locals, have many years of experience managing Kai Tak. The smooth integration of CAD staff into the Airport Authority from Kai Tak will ensure a good and experienced core of staff for managing and operating the new airport. This management team will work with their commercial, legal, financial, information technology and other colleagues from all professional areas where Hong Kong has considerable strengths and no shortage of experience and expertise. Mr President, I am fully confident that when our new airport opens in April 1998, Hong Kong will have a team of experienced local professionals to operate and manage the airport.

PRESIDENT: I have four names on my list and I will draw a line there.

DR SAMUEL WONG (in Cantonese): Mr President, the 10 Airport Core Programme Projects altogether cost the Hong Kong people about $160 billion. In these five years, we have lots of designs and management techniques developed and these should be passed on to the locals through technology transfer. Suppose we have similar projects in Hong Kong or in neighbouring areas, such as the second runway of the new airport, does the Administration have the confidence that the locals can take on the responsibility entirely so that there is no need to recruit professionals from overseas?

SECRETARY FOR ECONOMIC SERVICES (in Cantonese): Mr President, for the second runway, the reclamation work has been completed along with the first phase. We still have to surface it and install equipment on the runway to link up the system with the future control centre. Our PAA staff, whether they are locals or expatriates, have taken part in the building of the first runway and the whole airport. So we do have confidence that we will have enough expertise to build the second runway and other facilities concerning the new airport.

MR ALBERT CHAN (in Cantonese): Mr President, concerning the localization of PAA staff, at present there are some gaps appearing, that is, the more senior the level the fewer there are locals. For the Directorate level, more than 90% are expatriates. Now the Mass Transit Railway Corporation has initiated a plan to localize the Directorate level progressively. May I ask the Secretary for Economic Services whether the PAA has any concrete plans or has taken any action to appoint locals as Directors progressively?

SECRETARY FOR ECONOMIC SERVICES (in Cantonese): Mr President, first of all, let me talk about matters of policy. The policy of the PAA is that people from outside Hong Kong will not be employed unless absolutely necessary. Another policy is to train the locals within the PAA and this is one of the factors considered in promotion. As to why we have recruited people from overseas now, it is because at this stage most of the work relates to planning and construction, and over the past 20 years Hong Kong has not built any new airports, so we did not have the expertise. But with the passage of time, and through various training programmes and exchanges, locals can be promoted to the senior levels at some time in the future.

MR EDWARD HO: Mr President, in the second paragraph of the Secretary's reply, he said that only 10% of the Project Division staff of the Authority are locals. Will the 10% local staff continue to stay with the Authority after the completion of the project and if so, how can that be assured? If not, then how can continuity be achieved?

SECRETARY FOR ECONOMIC SERVICES: Mr President, I think exactly how the Project Division will shape within the Authority, after the New Airport has been completed, is an issue which has to be discussed and examined. In fact, the entire team now, with staff both from overseas and from Hong Kong, designs and constructs. But after the entire airport has been completed, and after the second runway has been completed, it is questionable whether in fact we need a Project Division as such. As I have said in my main reply, I expect in fact quite a number of staff to leave the Authority ─ those who are actually only responsible for design, planning and construction. Therefore, exactly who will go and who will stay and how many of the local staff will stay in the Project Division after the airport has been completed is something which has to be studied by the Authority in due course.

MR LEE CHEUK-YAN (in Cantonese): Mr President, the last sentence in the main reply is very encouraging, stating that when the new airport opens, Hong Kong will have a team of experienced local professionals to operate and manage the airport. But not long ago, there was a press report alleging that although the CAD currently has a team of air traffic controllers, the new airport is going to have a completely new air traffic control system and hence people would be recruited from overseas to operate the system. Will the Secretary confirm whether the report was true? If yes, I would like to know whether we can start training now so that by April 1998, we can have sufficient local air traffic controllers to operate the new system?

SECRETARY FOR ECONOMIC SERVICES (in Cantonese): Mr President, the report was incorrect. In our plans, after the opening of the new airport, CAD staff will still be responsible for air traffic control. It is not the responsibility of the Airport Authority. Our CAD staff are mostly locals and they all have the expertise and experience for the job now and in the future.

PRESIDENT: I have to remind Members of Standing Order 18(1)(i): "A question shall not be asked whether statements in the press or of private individuals or private concerns are accurate." But I am quite happy that the Secretary was ready to reply to your question.

Progress of Women in Tertiary Institutions

2.DR LAW CHEUNG-KWOK asked (in Cantonese): Mr President, will the Government inform this Council whether it has provided any guidelines on appointment, recruitment and promotion matters to the seven tertiary institutions funded by the University Grants Committee with a view to achieving the objective of increasing the number of female senior staff in the institutions concerned? Also, will the Government provide this Council with the following information:

the breakdown by number and percentage of women holding the positions of Member of Council, Head and Deputy Head of Institution and Head of Administrative Department in each of the institutions concerned; and
the breakdown by number and percentage of women holding positions of Dean, Department Head and Professor in each of the institutions concerned?

SECRETARY FOR EDUCATION AND MANPOWER (in Cantonese): Mr President, the Administration has not provided any guidelines on appointment, recruitment and promotion matters to the seven tertiary institutions funded by the University Grants Committee (UGC) with a view to increasing the number of female senior staff in the institutions concerned. These are matters of staff recruitment and personnel management which fall within institutional autonomy. It would be inappropriate for Government to intervene.

It should be noted that no gender preference is stated in the institutions' recruitment or promotion policies and practices or in procedures for professorial appointment or conferment of professorial titles. Headship of departments and faculties is in most cases a concurrent appointment for academic staff and, in some cases, such positions are filled by peer election or by rotation of department or faculty staff.

In future, the Sex Discrimination Ordinance, which was enacted in July 1995 for phased implementation, will make it illegal to discriminate against women or men in employment, promotion, transfer or training.

Regarding part (a) of the question, a breakdown of the number and percentage of women holding Council Membership, and the positions of Head and Deputy Head of Institution and Head of Administrative Department in each of the institutions concerned are shown in Annex A.

As regards part (b) of the question, a breakdown of the number and percentage of women holding positions of Dean, Department Head and Professor in each of the institutions concerned are shown in Annex B.

Annex A

Number and Percentage of Female Council Members and Senior Administrators in the Seven UGC-funded Institutions

	Council Members		Heads and Deputy/Associate Heads of Institutions and Heads of Administrative Department(s)*
	Female	Total		Female	Total
CityU	3 (9%)	33		3 (14%)	21
HKBU	2 (6%)	32		3 (20%)	15
LC	2 (7%)	27		5 (45%)	11
CUHK	5 (9%)	53		5 (24%)	21
PolyU	3 (10%)	29		2 (12%)	17
HKUST	1 (3%)	29		4 (18%)	22
HKU	5 (12%)	41		3 (20%)	15
	21 (8.6%)	244		25 (20.5%)	122

* Note : The Heads and Deputy/Associate Heads of Institutions include the Vice-Chancellor or President, Pro-Vice-Chancellor or Vice-President and the Heads of the Administration Department(s) include the heads of the Registrar Office, Finance Office, Estates Office, etc.

Annex B

Number and Percentage of Female Senior Academic Staff in the seven UGC-funded Institutions

	Heads of Academic Units (including Deans and Department Heads)*		Professors*
	Female	Total	Female	Total
CityU	3 (11%)	28	0 (0%)	24
HKBU	3 (10%)	31	1 (3%)	30
LC	1 (6%)	17	0 (0%)	7
CUHK	7 (9%)	78	3 (5%)	60
PolyU	4 (13%)	31	2 (5%)	37
HKUST	2 (11%)	18	2 (4%)	53
HKU	2 (4%)	54	5 (6%)	79
	22 (8.6%)	257	13 (4.5%)	290

* Note : About 10 female professors occupy concurrently senior administrative or academic positions

DR LAW CHEUNG-KWOK (in Cantonese): According to the information provided by the Secretary for Education and Manpower, the percentage of women holding senior administrative and academic positions in universities is very low. Will the Secretary for Education and Manpower tell us whether this is a natural and inevitable outcome or whether there are some unfair human or social factors in operation?

PRESIDENT: Dr LAW Cheung-kwok, Standing Order 18(1)(h) states: "A question shall not be asked for the purpose of obtaining an expression of opinion". You may like to rephrase your question.

DR LAW CHEUNG-KWOK (in Cantonese): Mr President, I am sorry I do not understand what is the problem with my question. (Laughter) Perhaps I shall repeat it .....

PRESIDENT: You may rephrase it, but not repeat it.

DR LAW CHEUNG-KWOK (in Cantonese): I will put my question again. Mr President, if you still think it is out of order, I will withdraw it. According to the information provided by the Secretary for Education and Manpower, the percentage of women holding senior administrative and academic positions in universities is very low. Will the Secretary for Education and Manpower tell us whether this is a natural and inevitable phenomenon or whether some unfair human or social factors are in operation?

PRESIDENT: Dr LAW, you are seeking an opinion. Next supplementary.

DR ANTHONY CHEUNG (in Cantonese): Mr President, can the Secretary for Education and Manpower further inform this Council whether the percentage of women holding senior positions in tertiary institutions which he has provided earlier on has shown an improvement in relation to the figures five years ago?

SECRETARY FOR EDUCATION AND MANPOWER (in Cantonese): Mr President, I do not have the relevant information at hand. I will obtain the information from the tertiary institutions through the UGC and provide them to Dr the Honourable Anthony CHEUNG (Annex I).

MR FREDERICK FUNG (in Cantonese): Mr President, the Governor is the Chancellor of all the universities and I think he should bear a great responsibility and have a very important role to play in relation to the relatively low percentage of women holding senior positions in universities. Will the Government inform us whether the Governor, who is the Chancellor of all the universities, has been reminded of such situation and whether any feasible proposals have been submitted to him?

SECRETARY FOR EDUCATION AND MANPOWER (in Cantonese): Mr President, I understand that the appointment of Council Members by the Governor is based solely on qualifications, including academic or professional knowledge and experience as well as interests and enthusiasm in public affairs. Throughout the process of peer election and appointment by the Governor, gender is not one of the considerations at all.

MR FREDERICK FUNG (in Cantonese): I think the Secretary for Education and Manpower has not answered my question. Has he actually reminded the Governor, who is the Chancellor of all the universities, that the percentage of women holding senior positions is relatively low?

SECRETARY FOR EDUCATION AND MANPOWER (in Cantonese): Mr President, I have actually answered the Honourable Frederick FUNG's question. As I said earlier, since gender is not one of the considerations in the whole process of appointment, I think we should not remind the Governor that more women or more men should be appointed.

Substance Abuse among Youngsters

3.MR ALLEN LEE asked (in Cantonese): In view of the fact that drug abuse is now a common phenomenon among youngsters and that the problem of thinner sniffing is becoming increasingly serious, will the Administration inform this Council:

whether consideration has been given to introducing legislation to restrict the sale of thinners to youngsters;
whether consideration has been given to stepping up publicity campaigns in schools against drug abuse; and
what is the number of cases in which youngsters are involved in crimes related to soft drugs in the past year and whether there is an upward trend in such cases?

SECRETARY FOR SECURITY (in Cantonese): Mr President,

Given the widespread and legitimate industrial, commercial and household uses of thinner and other organic solvents, we have no plans to introduce legislative controls on their sale. The problem of thinner sniffing should best be tackled at source, by preventive education and publicity on the harmful effects of substance abuse.
We have been stepping up preventive education and publicity in schools. The Education Department has taken a series of steps to strengthen drug education in schools. It is conducting a pilot scheme involving 20 secondary schools to develop and implement school-based drug education courses in the 1995/96 school year. Drug education is already integrated into the school curriculum. The Education Department is considering how drug education can be more effectively delivered to students through school subjects at different levels. Drug education will also be incorporated into a new General Studies syllabus to be implemented in primary schools in 1996.
The Education Department is also carrying out a programme of assistance and training to schools and teachers to enable them to perform their essential task of educating their students to stay away from drugs more effectively. A new three-day drug education workshop co-organized with the Narcotics Division for in-service secondary school teachers was introduced in July 1994 and is now organized regularly to enrich teachers' knowledge on drug and substance abuse and enhance their skills in implementing drug education. A one-day drug education course for primary school teachers has started in July this year. To strengthen teachers' skills in conducting preventive drug education, the Education Department jointly organized with the Community Drug Advisory Council a two-day course on Life Skills Training for Secondary School Teachers in April 1995. So far three courses have been held. A Drug Education Resource Corner was set up in September to support teachers in implementing drug education in schools, pending the opening of a separate Drug Education Resource Centre in March 1996.
The Narcotics Division has strengthened its drug education talks for secondary school students. A new package of talks was launched last month. The contents and format of the talks have been improved on the recommendations of a working group involving the Narcotics Division, the Education Department, school principals and social workers. The new talks are updated to take into account the changing trends in substance abuse, and the different needs of secondary school students in junior and upper forms. Guidelines for conducting associated activities both before and after the talk have been issued to schools to encourage them to put more emphasis on drug education and reinforce the anti-drug messages delivered during the talks.
School social workers are alert to the problem of substance abuse among students and convey anti-drug messages to students during their daily contacts. The Against Substance Abuse Scheme, established by the Social Welfare Department last month with six specially trained social workers, will focus on working with schools to combat drug abuse problems among students. The Department is producing a video programme targetted at parents on the handling of drug problems among their children. The video will be available for distribution to schools by the end of this year.
I should add in this context that the Hospital Authority also operates six Substance Abuse Clinics, aiming at weaning young people away from substance abuse. PS33, run by the Hong Kong Christian Service, also provides counselling service to youths involved in substance abuse.
776 young people under the age of 21 were arrested in 1994 for offences associated with psychotropic substances. This compares with 743 in 1993 and 724 in the first nine months of 1995.

PRESIDENT: I have fours names on my list, I will draw a line there.

MR ALLEN LEE (in Cantonese): Mr President, is thinner sniffing a violation of the law? If not, on what grounds can the police control this act?

SECRETARY FOR SECURITY (in Cantonese): Mr President, I have provided the respective numbers of cases in which youngsters are arrested and prosecuted for offences associated with psychotropic drugs for last year, the year before last, and this year in my main reply. These are offences associated with psychotropic drugs but not thinner. I think I have answered the question raised by the Honourable Allen LEE.

Selling thinner is not a crime. Of course, we do not encourage youngsters to sniff thinner. We do urge youngsters not to abuse this substance through different channels including schools, publicity campaigns and education.

MR ALLEN LEE (in Cantonese): Mr President, the Secretary for Security has not answered my question. We all know that buying thinner is not a crime. But my question is whether thinner sniffing is a crime. If it is not a crime, then these figures do not include cases in which youngsters are involved in thinner sniffing. If it is not a crime, then the police does not have the authority to control this act. If it is not a violation of the law for youngsters to sniff thinner, how are we going to tackle this problem?

SECRETARY FOR SECURITY (in Cantonese): Mr President, thinner sniffing is not a crime. I have provided the figures in paragraph (c) of my main reply because the Honourable Allen LEE asked for the number of cases in which youngsters were involved in crimes related to soft drugs in the past year and whether there was an upward trend in these cases. He did not specifically point at thinner. As regards whether we can tackle a problem if the act involved is not a crime, I have also pointed out in my main reply that the most effective method to tackle the abuse of such substances is to encourage youngsters not to abuse these substances through education and publicity. We all read about reports in the press on cases of glue sniffing. The same applies to this act which is not a crime but of course it is harmful to health. We do not want to see this happen. To stop youngsters from abusing this kind of substances, I repeat, the best way is by counselling and education.

MR HOWARD YOUNG (in Cantonese): Mr President, according to the figures relating to the abuse of soft drugs provided by the Administration in the last paragraph of the main reply, the number of such cases in 1994 shows a slight growth of 5% over that in 1993. However, if the figure for the first nine months of this year is annualized, we may find a sharp rise of 25%. Has the Administration ever examined the situation revealed by this figure and what conclusion has it reached? Does this figure tell us that the abuse of soft drugs is becoming more and more serious? Or is this just an individual case?

SECRETARY FOR SECURITY (in Cantonese): Mr President, it is difficult to make a projection of the whole year on the basis of the figure for the first nine months and then try to compare this projected figure with the figures for 1993 and 1994. In fact, we do not need to do this. It is because generally speaking, we can see that the number of cases in which the abuse of psychotropic substances are involved is on the rise and the Government is deeply concerned about this situation. That is why I have mentioned in my main reply that we must step up our education and publicity campaigns this year. If we look back one more year, we will find that even if we do not take the figure for this year into consideration, the trend is rising. In 1992, there were 499 such cases. If we make a comparison between 499 and the figure for last year, that is, 776, we can see that there was a significant increase.

MRS SELINA CHOW (in Cantonese): Mr President, from the Secretary reply, we can see that there is nothing we can do to control sniffing of thinner or other volatile solvents. It is mentioned in the first paragraph of the main reply that this problem should best be tackled at source. However, based on the main reply, except that one of the paragraphs has mentioned a video programme, all measures are targetted at schools and students. Will the Secretary inform us whether the damage caused by thinner and other volatile solvents is included in the contents of this video programme and, apart from the video programme, are there any other measures to convey this important message to parents?

SECRETARY FOR SECURITY (in Cantonese): Mr President, the main theme of the video programme is to discourage youngsters from being addicted to the abuse of drugs, psychotropic drugs and other substances. As regards parents, I have mentioned in the main reply that the Education Department has done a lot to educate youngsters and of course parents should also be involved. For example, anti-drugs seminars held by the Narcotics Division every year have also been extended to parents this year.

MR JAMES TO (in Cantonese): My quesion is very similar to the one raised by the Honourable Mrs Selina CHOW. I really want to know whether thinner and other volatile substances are included in the contents of the anti-drug educational programmes, telling youngsters not to abuse these substances. Of course, I do not really mean all substances of this nature since even correction fluid is being sniffed. I am referring to substances which are generally being abused. When the possibility of drug abuse is being discussed in the educational programmes, are solvents which are usually being abused specifically mentioned?

SECRETARY FOR SECURITY (in Cantonese): To my knowledge, they are mentioned in the programmes. Organic solvents which are usually being abused also include thinner and lighter refill.

Converted Wooden Fishing Vessels

4.MR JAMES TO asked (in Cantonese): It is known that on 20 April 1995 a wooden fishing vessel which had been converted into a cargo carrier capsized in the waters off the Lamma Island, resulting in the death of two crew members. In this connection, will the Government inform this Council:

of the estimated number of wooden fishing vessels in the territory which have been converted into cargo carriers;
whether those wooden fishing vessels which have been converted into cargo carriers are required to undergo an "inclining test" for determining their maximum loading capacity to ensure their stable navigation; if not, why not; and
of the number of shipwrecks involving such wooden fishing vessels in the past three years?

SECRETARY FOR ECONOMIC SERVICES (in Cantonese): Mr President,

In Hong Kong, applications for the conversion of wooden fishing vessels into cargo ships are rather uncommon. Only 20 such cases have been approved by the Director of Marine during the past 30 years.
when an owner of a wooden fishing vessel wishes to convert that vessel for the carriage of cargo, the vessel is not required by the Marine Department to undergo the stability assessment test.
This is because the traditional designs of such vessels have a long history of safe operations in Hong Kong waters and in the South China Sea. The vessels are comparatively broad compared with their length, and are wider than other vessels. They have oval-shaped hulls and higher freeboards. If these are operated as fishing vessels, or when converted for cargo handling purposes, and operated in accordance with the guidelines issued by the Director of Marine, there should be no problem with their stability.
However, against the background of the accident in April, the Director of Marine has given the instruction that stability assessment tests must be carried out prior to the conversion of any further wooden fishing vessels for cargo operations. He has further instructed that all existing wooden cargo vessels which have been converted from fishing vessels should be examined to determine their stability in handling cargo.
During the past three years, two traditional wooden fishing vessels modified as cargo ships have foundered. In both cases, deck cargo was either excessive or improperly secured.

MR JAMES TO (in Cantonese): Mr President, in his reply the Secretary for Economic Services mentioned that those fishing vessels have a long history of safe operation and 20 cases have been approved over the past 30 years, but there were two shipwrecks in the last three years. We certainly cannot judge the seriousness of this problem simply by looking at the figures. While 20 applications for legal conversion were approved in the past 30 years, does the Government know whether the conversion of such vessels without seeking approval (and that is the so-called unauthorized usage of vessels) is common at present? How many prosecutions have been instituted over the past few years?

SECRETARY FOR ECONOMIC SERVICES (in Cantonese): Mr President, let us talk about the legislation first. If an owner of a wooden fishing vessel converted the vessel for other purposes or changed the design of the vessel without permission and this resulted in an accident, the owner might ─ I repeat, the owner might ─ be liable for other criminal offences. As regards other fishing vessels being converted for cargo carriage purpose, I do not have the number of prosecutions at hand and I will give the Honourable James TO a written reply (Annex II). However, let me add just one point. In fact, apart from those 20 vessels that I mentioned just now, there are still 220 traditional wooden cargo vessels of which the designs are approved for the carriage of cargo.

MR JAMES TO (in Cantonese): Mr President, my question has been misunderstood. Part (c) of my question enquired about the number of shipwrecks involving such wooden fishing vessels in the past three years, not wooden cargo vessels. Therefore, I am not sure whether the reply is still applicable to my question. My understanding is that two of these 20 vessels have capsized in the past three years. The 220 vessels that the Secretary referred to are in fact not wooden fishing vessels, but wooden cargo vessels.

SECRETARY FOR ECONOMIC SERVICES (in Cantonese): Mr President, I would like to confirm that part (c) of my reply referred to these two capsized vessels.

MR HOWARD YOUNG: Mr President, looking at paragraphs (b) and (c) of the answer, it appears to me that the problem is not the lack or otherwise of stability tests, but excess or improper securing of cargo on deck. Therefore, has the Government considered that that is really the crux of the problem? Can the Government therefore tell us whether there are any enforcement measures in the harbour to detect this phenomenon of excess loading on deck or improper securing ─ I believe there is such a system where the police can stop a lorry on the roads? Is there a similar system for that sort of enforcement in the harbour to prevent such accidents?

SECRETARY FOR ECONOMIC SERVICE: Mr President, first of all from the point of view of advice and guidance, in fact the Director of Marine issues guidance to all boat owners, that would include operators and owners of cargo vessels of a western design or Asian design, on how to load, what not to do in loading, how to secure cargo and so on. These are standard guidelines. But there are also instructions given to coxswains, if they are worried about a certain aspect of the boat being operated in certain waters, on what they should do and so forth. So there is in fact guidance.

As to enforcement action, this can be undertaken by both the Marine Police and the Director of Marine in his own patrol boats. And of course when it becomes obvious that in fact somebody is doing something dangerous which may cause danger not only to the boat itself but also to other users of the fairways in the harbour, then they take action. I do not have these data, but I will happily provide such data to Mr YOUNG. (Annex III)

Occupational Safety and Health in Non-industrial Undertakings

5.MR ANDREW CHENG asked (in Cantonese): Mr President, regarding the problem of occupational safety and health in non-industrial undertakings, will the Government inform this Council whether:

it has conducted any surveys on occupational safety in non-industrial undertakings; if so, will the Government provide a breakdown of accidents by cause and type of occupation for the past 3 years; if not, how does the Government monitor the situation of occupational safety in non-industrial undertakings;
the working environment of office workers and employees in the service industry will be covered by the Occupational Safety Bill which is being drafted; what is the progress in the drafting of the bill, when will the public be consulted and when will the bill be presented to this Council for scrutiny; and
consideration has been given to bringing office workers suffering from certain common occupational diseases (such as waist and back pain, and ailments of vision and hands) under the protection of the law, so that they will be eligible for compensation?

SECRETARY FOR EDUCATION AND MANPOWER (in Cantonese): Mr President, regarding part (a) of the question, the Government has not conducted any specific surveys on occupational safety in non-industrial undertakings. However, the Labour Department keeps statistics on accidents reported by employers under the Employees' Compensation Ordinance for both industrial and non-industrial sectors. There were 20 250 accidents in non-industrial establishments in 1992, 20 865 in 1993 and 20 252 in 1994. The accident rate per 1 000 employees in the non-industrial sector was 13.63 in 1992, 13.35 in 1993 and 11.96 in 1994. This is much lower than the accident rate in the industrial sector, where the comparable figures were 57.23 in 1992, 52.55 in 1993 and 52.93 in 1994.

The information provided under the current reporting form does not contain sufficient details to enable us to break down these accidents by cause. Steps are being taken to improve the reporting form by requiring employers to state more clearly the causes of accidents.

The number of accidents in non-industrial undertakings by type of occupation and the accident rates for 1992 to 1994 are provided in the Appendix to the written version of my reply.

As regards part (b) of the question, the Consultation Paper on the Review of Industrial Safety in Hong Kong, which was published in July this year, recommended that, as a broad principle, all employees should be protected by safety and health legislation and that it should be achieved in stages. This recommendation was generally supported by the public. Details of the proposed legislation to cover employees in non-industrial sectors are being drawn up and we intend to consult the Labour Advisory Board in February 1996. The proposed legislation will include six separate sets of regulations which will lay down minimum safety and health standards in the working environment and regulate certain hazardous processes, equipment, machines and substances.

Our aim is to introduce the draft bill into this Council in June 1996. We also aim to introduce at the same time two sets of draft regulations to provide for the general safety and health of the workplace and to regulate manual handling operations. We will consider the timing of introducing the remaining four regulations by phases.

As regards part (c) of the question, waist and back pains and ailments of vision are not compensable occupational diseases at present. Two ailments of the hand are listed as compensable occupational diseases in the Second Schedule of the Employees' Compensation Ordinance. They are cramp of the hand or forearm due to repetitive movements and traumatic inflammation of the tendons of the hand or forearm, or of the associated tendon sheaths. The Labour Department is currently conducting a comprehensive review of the Employees' Compensation Ordinance including the list of compensable occupational diseases. The review, which we hope to complete by the middle of 1996, will consider whether new occupational diseases should be added to the list. Thank you, Mr President.

Appendix

Major Economic Activity (for Non-industrial Sector)

Accidents & Accident Rates for 1992 to 1994

Economic Activity		1992	1993	1994

MEDICAL	(a) No of Accident (b)Injuries/1 000 Employees	808 (1) 19.46	991 (1) 21.43	1 273 (0) 24.27
EDUCATION	(a) No of Injuries (b)Injuries/1 000 Employees	394 (1) 4.65	375 (3) 4.23	355 (1) 3.95
TRANSPORT	(a) No of Injuries (b)Injuries/1 000 Employees	4 957 (56) 46.1	4 942 (60) 42.87	4 692 (40) 38.53
BANKING	(a) No of Injuries (b)Injuries/1 000 Employees	137 (1) 1.19	141 (0) 1.16	149 (12) 1.14
WHOLESALE	(a) No of Injuries (b) Injuries/1 000 Employees	791 (3) 10.2	635 (4) 8.27	483 (6) 6.27
RETAIL	(a) No of Injuries (b)Injuries/1 000 Employees	1 944 (6) 9.58	1 759 (8) 8.74	1 976 (3) 9.51
HOTELS	(a) No of Injuries (b)Injuries/1 000 Employees	882 (0) 22.64	1 030 (2) 25.92	946 (1) 24.07
OFFICE	(a) No of Injuries (b)Injuries/1 000 Employees	1 896 (29) 9.85	2 158 (35) 10.46	2 191 (38) 9.66
CIVIL SERVICE	(a) No of Injuries (b) Injuries/1 000 Employees	3 521 (8) 19.15	3 142 (6) 17.33	2 692 (6) 14.94
OTHERS*	(a) No of Injuries (b)Injuries/1 000 Employees	4 920 (76) 11.15	5 692 (76) 11.72	5 495 (89) 9.68

"OTHERS" include agriculture, fishing, communication, community, social and personal services

Note : Figures in brackets refer to No. of Fatal Accidents

Source :	Census and Statistics Department
	Labour Department

MR ANDREW CHENG (in Cantonese): Mr President, from the reply given by the Secretary for Education and Manpower, I can see that the rate of accidents in the non-industrial sector is not high. But this may have something to do with awareness and it does not mean that accidents in non-industrial undertakings are not serious. Therefore, other than improvement of the reporting form, has the Government considered strengthening its education on occupational safety in the non-industrial sector because some employers may have little knowledge in this area? Besides, in relation to the question of bringing waist and back pains and ailments of vision within the meaning of occupational diseases as stipulated by the law, has the Secretary for Education and Manpower considered carrying out a survey in order to make the review more substantial?

PRESIDENT: You have two supplementary questions there. I will allow them for the moment but in future keep to one supplementary only.

SECRETARY FOR EDUCATION AND MANPOWER (in Cantonese): Mr President, in relation to the first question, the Government is certainly very concerned about the safety of workers. The Government has also organized regular seminars and talks on the safety of workers through the Labour Department. Also, as I have said in the main reply earlier, the Government is actually planning to draft a piece of new legislation on the safety in non-industrial undertakings to be tabled in the Legislative Council for scrutiny in the middle of next year. With the help of the Consultation Paper on the Review of Industrial Safety in Hong Kong published in July, which I have mentioned earlier, we will now put more efforts in educating workers on the things they need to pay attention to during work and in educating employers on the protection that should be given to workers in the workplace and we will continue with such work till the middle of next year. Therefore, in the next few months, not only will we be strengthening workers' awareness of safety at work, but we will also be strengthening employers' awareness in the same regard.

In relation to the second question, I have also mentioned earlier that we are considering a review of the Schedule of the Employees' Compensation Ordinance to see which occupational diseases are compensable. In the process of review, we will certainly consider whether waist and back pains and ailments of vision will fall within the meaning of occupational disease. But I must make it clear that whether a disease will fall within the meaning of occupational disease will depend on whether there is a close relationship between the disease and the occupation or the working environment concerned. Meanwhile, reference will be taken from the International Labour Conventions, and the actual situation in the territory and the experience of other places will also be examined. Therefore, before the review is completed, I cannot confirm whether these two particular diseases will be included as occupational diseases. But I can state that employers and employees will be consulted during the consultation exercise. Moreover, a motion has to be carried in the Legislative Council if the Schedule is to be amended and the Legislative Council will certainly have ample opportunities to scrutinize any proposal put forward by the Government.

MR SIN CHUNG-KAI (in Cantonese): Mr President, I believe hundreds of thousands of people are using computers for word processing or banking transactions every day. The computer monitors will produce a small amount of radiation. Will the Government consider conducting surveys on the occupational health of the users of micro-computers? Secondly, I would like to ask .....

PRESIDENT: One supplementary question only. You may set the second down as a separate question to be asked at some future sitting.

SECRETARY FOR EDUCATION AND MANPOWER (in Cantonese): Mr President, I have mentioned earlier in my main reply that I am going to introduce a new piece of legislation to protect the safety of workers in the non-industrial sector. I have also mentioned that the new legislation will include six different sets of regulations which will also deal with the health and safety issues concerning visual display screens. Therefore, I believe the concerns of the Honourable SIN Chung-kai will be attended to in the future legislation. At present, the Government has no plans to conduct any detailed survey on this.

MISS CHAN YUEN-HAN (in Cantonese): Mr President, in May 1994 Mr TAM Yiu-chung made a proposal, which was carried in this Council, to extend the scope of general liability to the workplace of all occupations. At that time, Mr Michael LEUNG, the then Secretary for Education and Manpower, indicated that the Government would support the spirit of the motion, but he subsequently rejected it in actual implementation. Just now the Secretary for Education and Manpower has said that the legislation concerning the safety of non-industrial undertakings, which will be submitted in June next years, will consist of six stages. Will the question of the safety of all people at work be dealt with in these six stages?

SECRETARY FOR EDUCATION AND MANPOWER (in Cantonese): Mr President, I believe the proposed new legislation, which will deal with matters covering the safety of employees in the non-industrial sector, should actually allay the Honourable Miss CHAN's concerns.

PRESIDENT: Not answered, Miss CHAN?

MISS CHAN YUEN-HAN (in Cantonese): Mr President, I think the Secretary for Education and Manpower has not answered my question. I hope he can reply precisely whether the question of safety of all people at work, including for example, Members of the Legislative Council, will also be dealt with.

SECRETARY FOR EDUCATION AND MANPOWER (in Cantonese): Mr President, of course, the new legislation on the safety of employees in the non-industrial sector, which I have mentioned earlier, will mainly deal with employees in the non-industrial sector. Concerning its detailed scope, since we are still in the drafting process, we will certainly be pleased to listen to views from all sectors of the community.

MR LEE CHEUK-YAN (in Cantonese): Mr President, I would like to follow up the Honourable SIN Chung-kai's question. I hope I can correctly guess what he was going to ask and ask the second question on his behalf. I am concerned about the question raised earlier of the effect of computer monitors on vision. The Secretary for Education and Manpower has replied that a legislation concerned is being drafted. Can I ask what are the specific contents of that legislation? According to the experience of some foreign countries, users of computers should have a break of 15 minutes every two hours to avoid harm to their eyes. Will the legislation be drafted in this direction and is there any occupational safety code of a similar kind at present which allows civil servants and the personal secretaries of Policy Secretaries to take a 15-minute break after every two hours of work?

SECRETARY FOR EDUCATION AND MANPOWER (in Cantonese): Mr President, I believe there are two questions. As regards the first question, I have said earlier that one of the regulations of the proposed new legislation on the safety of employees in the non-industrial sector concerns visual display screens. Of course, I have also indicated earlier that the drafting of the details has not really commenced, but our intention is certainly to include a definition of visual display screens in this legislation in the first place. Besides, do we have to stipulate what is a safe environment? We also have to study what are the measures the employers should take under this legislation to protect the vision and the eyes of the employees. As far as work is concerned, should employers provide some training or information on the safer use of visual display screens? I have noted earlier that this is just an initial stage, I think we will certainly have ample opportunities to consult employers and employees in due course and we will certainly consult Legislative Council Members.

Safety Hazards of Marble Caverns

6.MR CHOY KAN-PUI asked (in Cantonese): The discovery of underground marble caverns at a public housing site in Area 90 of Ma On Shan has aroused the concern of the existing and prospective residents in that area. In this connection, will the Government inform this Council:

whether piling works at that site will cause the ground nearby to collapse, thereby affecting the structural safety of neighbouring buildings;
if the answer to (a) is in the affirmative, whether the responsibility for causing such a danger will rest with the Housing Authority (HA) or the building contractor concerned; and
whether there will be potential danger to the structure of the public housing blocks already built above the caverns; if so, what measures the HA will take to ensure the structural safety of these buildings?

SECRETARY FOR HOUSING (in Cantonese): Mr President, before I actually answer the question put by the Honourable CHOY Kan-pui and in order to avoid misunderstanding, it would be useful if I give the background on procedures relating to public housing construction in Ma On Shan Area 90. Because it is located in an area designated by the Building Authority in 1993 as a Scheduled Area under the Buildings Ordinance, owing to the existence of underground marble cavities, the design of permanent foundation works is, like other public housing construction in Scheduled Areas, subject to detailed ground investigation, assessment of geological conditions and careful design by qualified professionals in the Housing Department (HD) and its consultants. These details must be submitted to the Civil Engineering Department's Geotechnical Engineering Office (GEO) for checking before construction actually begins.

During the construction period, the HD's consultants are responsible for proper site supervision and monitoring to ensure that piling works do not cause any significant ground subsidence, or adversely affect the safety of buildings in the vicinity. After the new buildings have been constructed, the GEO will continue to monitor any site and building settlement for an appropriate period, normally several years.

Mr President, the standard procedures described above have been followed in the case of public housing construction in Ma On Shan Area 90 to ensure the safety of buildings. Detailed investigations were carried out under the supervision of the HD's consultants between 1989 and 1993, in consultation with the HD and the GEO. Piling works then began in early 1993, and the project is expected to be completed in six phases between 1996 and 2000.

I wish to reply to the specific question asked by Mr CHOY. Through careful planning and foundation design, development in the Scheduled Area is feasible and safe. A minor, localized subsidence took place during piling works in Phase 5 of the project. However, there has been no suggestion from any of the concerned parties that this minor subsidence itself will affect the buildings in the earlier four phases or other structures in the vicinity.

As I said in my reply to the question from the Honourable Miss Emily LAU last week (15 November), the piling contractor considers it unsafe to carry on with the works, but the HD's consultants hold the view that it is safe to continue, given the specialist design of the piling works and the detailed technical requirements specified in the contract. As a result, the HD has instructed these two parties to re-examine the design and details of the piling works, and to reconcile their differences. Should the disagreement between the two parties continues after the re-examination, the HA may have to consider resorting to arbitration by a third party.

MR CHOY KAN-PUI (in Cantonese): Mr President, the HD's consultants consider it safe to carry on with the works. However, the piling contractor considers it unsafe. Which of these versions is reliable then? Does this suggest a lack of monitoring by the HD?

SECRETARY FOR HOUSING (in Cantonese): Mr President, this does not mean a lack of monitoring by the HD. As I have said in the main reply, the HD considers it safe, but the contractor considers it unsafe. Under these circumstances, the best idea is to have both sides re-examine the procedures, that is to say, both sides are to study together once again the design and details of the piling works that were originally specified to see whether or not they are correct. As a matter of fact, these established procedures have been vetted by the Civil Engineering Department and the Department has considered them proper. But it should not matter if we go over them once again.

PRESIDENT: I have five more names on my list. May I just remind Members to keep their supplementaries very short so that we can satisfy all five requests.

MR MOK YING-FAN (in Cantonese): Mr President, in the last paragraph of his main reply, the Secretary for Housing has noted that the two sides have some differences. Will the Secretary inform us specifically what are those differences?

SECRETARY FOR HOUSING (in Cantonese): Mr President, the differences are in the details of the piling works. One side considers that it is unsafe to carry out the piling works in question, whereas the other side considers that it is safe. Therefore both sides have to conduct a re-examination.

MISS EMILY LAU (in Cantonese): Mr President, in case the differences between the piling contractor and the engineering consultants cannot be reconciled, making it necessary for arbitration by a third party, will it take a long time then? I am concerned that it would affect the whole housing construction project and result in overspending. Can the Secretary for Housing explain this to us?

SECRETARY FOR HOUSING (in Cantonese): Mr President, I can very much appreciate the misgivings of the Honourable Miss Emily LAU. It is of course hoped that we will not need an arbitration to solve the problem. We hope that the two sides are able to reach a satisfactory conclusion quickly and continue with the works. As a matter of fact, other housing construction works on that site are still going on. It is merely that a minor part of the land is temporarily affected because of the foundation problem and thus has caused some delay.

MR CHAN KAM-LAM (in Cantonese): Mr President, can the Government inform this Council about the underground marble caverns in Area 90 and its vicinity in Tseung Kwan O?

PRESIDENT: Are you referring to Ma On Shan, Mr CHAN, or Tseung Kwan O?

MR CHAN KAM-LAM (in Cantonese): It is Tseung Kwan O.

PRESIDENT: Can you help, Secretary?

SECRETARY FOR HOUSING (in Cantonese): To my knowledge, Tseung Kwan O is not classified as a Scheduled Area under the Buildings Ordinance. To date, we have no indication that such a problem arises in that area.

MR LEE WING-TAT (in Cantonese): Mr President, Home Ownership Scheme (HOS) units are being built at the site in question as well as ite neighbouring areas, and some of the HOS units have already been put on the pre-sale. Under the present circumstances, I think it is most likely that there will be delays in the construction works. Will the Secretary inform us whether the prospective owners of HOS units who have applied for these units and have been picked in the draws have the right to rescind the sales agreement?

PRESIDENT: I think a lot of those applicants must be rather interested in the answer to this question but it strays from the main question and the main answer ─ but if the Secretary is prepared to answer that.

SECRETARY FOR HOUSING (in Cantonese): In fact, I have mentioned it just now. The first four phases of housing construction works have not been affected by the piling works of that minor localized area (namely, that of Phase 5). Therefore, there has not been any delay in the housing construction works previously carried out, nor is there any impact in particular. Therefore, it should not affect those HOS units which have been publicized and for which draws have been made, and members of the public need not apply for rescission.

MR FREDERICK FUNG (in Cantonese): Mr President, according to the main reply given by the Secretary for Housing, it can be seen that the Government has in fact learnt of the matter a long time ago. This is because during the period between 1989 and 1993, it had been studied and examined by many departments, such as the HD, consultants of the HD, the Civil Engineering Department and so on before the piling works commenced in early 1993. However, there is now a disagreement with the piling contractor concerning the piling works. Will the Secretary inform us whether the Government had released the information and results of the research conducted by these departments so that the piling contractor was aware of the situation? If not, why not, as this might affect the piling works? If information was provided, then there should be no further dispute as all the information needed was in place.

SECRETARY FOR HOUSING (in Cantonese): Mr President, my understanding is that when the piling works were put out to tenders, the HD had already included all the research materials as well as the planning and details of the piling works in the particulars of the invitation to tender. Therefore, in a word, all the necessary information was included.

WRITTEN ANSWERS TO QUESTIONS

Multi-media Services

7.MRS MIRIAM LAU asked (in Chinese): It is learnt that the Recreation and Culture Branch is working jointly with the Telecommunications Authority to draw up a set of standards for the provision of multi-media services. In this regard, will the Government inform this Council:

of the reasons why the responsibility for setting standards for the provision of multi-media services should come within the purview of the Recreation and Culture Branch, instead of the Economic Services Branch which has the policy responsibility for telecommunications matters; and
whether the Government will set up an inter-departmental working group to study matters in relation to the setting of standards for multi-media services; if not, what measures will be taken to ensure that the promotion of multi-media services is in keeping with the development of the telecommunications industry?

SECRETARY FOR RECREATION AND CULTURE: Mr President, the transmission of multi-media services over telecommunications networks is a telecommunications service and as such is regulated by the Telecommunications Authority, for which the Economic Services Branch has policy responsibility. However, the Recreation and Culture Branch has an interest in respect of the content of those multi-media services which offer programming similar to broadcast services. Developments in multi-media services, and the extent to which regulation is required, are already the subject of discussion in an inter-departmental working group, and policy proposals will be submitted to the Executive Council in due course.

Competitiveness of Service Industry

8.DR DAVID LI asked: The cumulative rise in the consumer price index over the last five years is only 17% in the United States but is over 60% in Hong Kong. The rise in the cost of living in the territory has caused a significant rise in our labour costs, particularly in the service and other labour-intensive industries. In view of this, will the Administration inform this Council whether measures are being taken or planned to preserve the competitiveness of our service industry in the face of the chronic rise in the cost of living and rentals?

SECRETARY FOR FINANCIAL SERVICES: Mr President, in discussing the rise in the Consumer Price Index as reflecting higher inflation in the economy along with the rise in labour costs and property rentals, we have to be clear about the underlying causes. For a number of years, Hong Kong was faced with a very tight resource situation, particularly in labour and accommodation. The tight labour market, until more recently, has led to rapid increase in wages as the market mechanism worked to balance limited labour supply against strong demand. Similarly, the strong demand for accommodation against the severe land constraint in Hong Kong has led to an upsurge in property prices and rentals. The rise in resource costs then feeds into the production process and pushes up the prices of goods and services in the local economy, thereby resulting in higher domestically generated inflation. Contrary to what some commentators may have argued, it is not so much the rise in inflation feeding into higher labour costs and rentals as the reverse.

It is therefore essential to recognize that a relatively more abundant supply of the key resources, namely labour and accommodation, can be expected to contribute to the lowering of inflation in Hong Kong. At the present moment, already we are witnessing the economy moving in such a direction. The labour market has eased considerably, not due to a shrinkage in total employment but due mainly to a rather faster increase in labour supply in relative terms. While it is unfortunate that the unemployment rate has picked up as a result, increase in labour costs has begun to ease. The property market also has consolidated from the exceptional buoyancy in 1993 and the early part of 1994, and both property prices and rentals have fallen. In short, the market process is now working to alleviate the strong pressure on the cost of doing business in Hong Kong.

Our tried and tested policy of fostering a highly competent, productive and adaptable labour force in an economy that is undergoing structural changes, and of providing an adequate supply of land for property development to meet the growth in demand, constitute the best safeguard against excessive rises in the cost of doing business. This policy also should continue to enable us to restrain inflation, as well as help preserve the cost competitiveness of our service industry.

Rising Property Prices

9.MR LAU CHIN-SHEK asked (in Chinese): Regarding the price of private residential properties, will the Government inform this Council:

of the average rate of increase in private residential property prices in each of the past three years, as compared with the respective rates of increase in inflation and the wages of local employees over the corresponding period; and
whether it will introduce additional measures in the near future to further curb property prices?

SECRETARY FOR HOUSING: Mr President, the statistical information requested is given below:

	Actual price index for selected private residential developments		Consumer Price Index (A)		Overall nominal wage index
	Year-on-year rate of increase	Average annual rate of increase	Year-on- year rate of increase	Average annual rate of increase	Year-on- year rate of increase	Average annual rate of increase
1993	8.7%		8.5%		11%
1994	31.2%	8.3%	8.1%	8.6%	9.5%	9.8%
1995	-10.9%(1)		9.1%(1)		9%(2)

Notes

(1):Latest available information as at September 1995.

(2):Latest available information as at March 1995.

We are satisfied that the anti-speculation measures are achieving the desired results, and will closely monitor the property market to guard against a revival of speculation. We do not intend to relax the existing measures or to introduce additional ones in the near future. The situation will be reviewed on a regular basis.

Temporary Housing Area Allocation Standards

10.MR FREDERICK FUNG asked (in Chinese): In regard to the living area for Temporary Housing Area (THA) tenants, will the Government inform this Council:

how the size of living area for THA tenants is determined;
what is the size of living area per tenant of a THA household below which the THA household is classified as overcrowded;
what arrangements will normally be made for transferring overcrowded THA households and what is the average waiting time for such a household to get a transfer;
of the total number of overcrowded THA households in the territory, together with a breakdown of such households by district; and
whether there is any plan to increase the size of living area for THA tenants; if so, when the plan will be implemented; if not, why not?

SECRETARY FOR HOUSING: Mr President, the size of living areas allocated to Temporary Housing Area (THA) tenants is determined in accordance with the Housing Authority's allocation standards which are set out below:

Size of unit (sq m)	Number of occupants (person per unit)	Space per person (sq m)

3.8 or 4.6	1	3.8 or 4.6
8.21	1 to 2	4.11 to 8.21
9.85	2 to 3	3.28 to 4.93
13.13	2 to 4	3.28 to 6.57
16.42	3 to 5	3.28 to 5.47
19.69	4 to 6	3.28 to 4.92
21.88	5 to 7	3.13 to 4.38
24.06	6 to 8	3.01 to 4.01
26.25	7 to 9	2.92 to 3.75
30.08	8 to 10	3.01 to 3.76

When the living space per person in a unit is below 2.79 sq m for full-built THAs or below 3.4 sq m for part-built THAs, the household is classified as overcrowded and is eligible for overcrowding relief.

Overcrowded households may apply for transfer to larger units in the same THA. The time taken to effect a transfer depends on the availability of larger units.

There are 835 overcrowded households in THAs in the territory. Their distribution is as follows:

District	Number of overcrowded households in THAs
Eastern	1
Wong Tai Sin	53
Sham Shui Po	70
Tuen Mun	35
Tsuen Wan	36
North	64
Kwai Tsing	122
Sai Kung	149
Sha Tin	305

There are no immediate plans to improve THA allocation standards as we are constrained by the continuing demand and limited availability of THA accommodation in the next few years.

Wounding Case Involving Discharged Mental Patients

11.MR FRED LI asked (in Chinese): With regard to a recent wounding incident involving four discharged mental patients who shared the same public housing unit, will the Government inform this Council:

of the total number of cases in which discharged mental patients were allocated public housing units through arrangements made by the Social Welfare Department in the past three years;
whether the social workers concerned have paid any visits to the discharged mental patients involved in the above-mentioned incident in the past two years; if not, what are the reasons; and
what interim and long-term measures the Government has put in place to prevent similar incidents from occurring in the future?

SECRETARY FOR HEALTH AND WELFARE: Mr President,

Over the three years up to and including 1994-95, 463 ex-mentally ill people have been allocated public housing units through the Compassionate Rehousing Scheme.
Over the past two years, the four persons involved in the case in question have been in regular contact with social workers and officers of the Social Welfare Department when receiving various welfare services including medical social services, training in sheltered workshops and benefits under the Comprehensive Social Security Assistance Scheme. They have attended follow-up sessions at psychiatric clinics at regular intervals. Social workers who had been in contact with them in delivering these services had not noticed any particular problems before the occurrence of this incident. In view of the regular contacts between the four and social workers in the provision of services, it had been considered unnecessary to supplement these contacts with any home visits.
We are reminding social workers of the need to pay close attention to any inter-personal problems that may exist among ex-mentally ill clients and other people who are sharing accommodation with them. Particular care must be exercised when recommending the sharing of public housing units by persons with a history of mental illness. For the longer term, we intend to establish two additional Assistant Social Welfare Officer posts in 1996-97 to improve after-care services for those discharged from half-way houses.

Financial Secretary's Comments on Property Market

12.MR CHEUNG MAN-KWONG asked (in Chinese): The Financial Secretary (FS) commented in late October that property prices at present were lose to bottoming out", and that although the prices were still 20% higher than those in 1993, the property market had returned to the normal track if the inflation in the last two years was taken into account. In this connection, will the Government inform this Council:

of the basis on which the FS comment was made and why the FS believed that property prices in 1993 were at the normal level;
whether the FS comment on prices in the private sector is in violation of the principle of non-interventionism; and
whether the FS comment is an indication that the Government aim to curb property prices has been achieved and that the Government is going to relax the relevant measures now in force; if so, whether the Government has considered that such a move may trigger off a rise in property prices which will make it difficult for families in need of a home to purchase their own flats, thus resulting in the Governor pledge of helping more families to become home owners more difficult to materialize?

FINANCIAL SECRETARY: Mr President,

Property prices increased sharply in 1993 and early 1994. It was against this background that the Government decided to introduce a package of price-stabilization measures in June 1994. The price level in 1993 is therefore a natural reference point for making comparisons with current prices.
Since the introduction of anti-speculation measures, property prices have stabilized. The price index in September 1995 was about 24% lower than the peak in April 1994. Although the index was still 22% higher than that in January 1993, the difference was roughly in line with inflation during the same period at about 24% in terms of the CPI(A).
The Government does not have in mind a predetermined acceptable level of prices. The Financial Secretary's remarks were made simply to reflect the success of the price-stabilization measures in dampening speculation and allowing the market to find its own equilibrium.
The level of property prices has always been a matter of public concern. It is normal and appropriate for government officials to speak on this subject in response to media enquiries. The Financial Secretary's remarks should not be taken as a prediction of price movements, but as an observation on the current price level as compared with that in 1993. There is no question of violating the principle of non-intervention.
The stabilization of property prices will increase people's affordability to buy homes. We are satisfied that the anti-speculation measures are achieving the desired results. We do not intend to relax these measures, but will closely monitor the property market to guard against a revival of speculation. The situation will be reviewed on a regular basis.
The Government has declared its intention to promote home ownership. We will help over 190 000 families to buy their own homes between April 1995 and April 2001 through various subsidized home ownership schemes and housing loan schemes. We are confident that a home ownership rate of 55% can be achieved by 1997, and will improve on that level thereafter.

Local Ethnic Minorities

13.DR LEONG CHE-HUNG asked: With regard to the recent report that the ethnic minorities in the territory would not be eligible to apply for the Special Administrative Region passports, will the Administration inform this Council whether it has taken any action to ask the British Government to discuss the issue of the nationality of the territory's ethnic minorities with the Chinese Government; if so, what action has been taken and with what result?

SECRETARY FOR SECURITY: Mr President, ethnic minorities in Hong Kong who hold a foreign passport will qualify for the right of abode in the Hong Kong Special Administrative Region if they satisfy the requirements set out in the Joint Declaration and Article 24(2)(4) of the Basic Law. Their nationality will not be affected.

Ethnic minorities who hold BDTC or BN(O) passports only will continue to have the right of abode in the Hong Kong Special Administrative Region after 1997 if they do not have the right of abode elsewhere before 1997. This is provided for in the Joint Declaration and Article 24(2)(6) of the Basic Law.

Ethnic minorities who are BDTCs can apply for BN(O) passports before 1 July 1997, or become British Overseas Citizens (BOCs) automatically on that date if they have no nationality other than British. Their children will automatically become BOCs if they would otherwise be stateless. Their grandchildren will be able to acquire the BOC status by registration if they would otherwise be stateless.

The eligibility criteria for the Hong Kong Special Administrative Region passport are set out generally in Article 154 of the Basic Law. The British side are continuing to discuss with the Chinese side in the Joint Liaison Group on questions relating to the right of abode in Hong Kong after 1997 and the eligibility for Hong Kong Special Administrative Region passports. We place importance on an early resolution of these issues, and hope that a satisfactory agreement with the Chinese side could be achieved as soon as possible.

Operation-related Infection of Hepatitis B

14.DR HUANG CHEN-YA asked (in Chinese): In view of the transmissibility of Hepatitis B, some countries have introduced regulations to minimise the risk of medical personnel who are Hepatitis B carriers transmitting the disease to patients during invasive operations using sharp instruments. In this connection, will the Government inform this Council:

of the number of patients in hospitals under the management of the Hospital Authority who have been infected with the Hepatitis B virus within a few weeks of an operation in the past three years; and
what guidelines and measures does the Government have to prevent the transmission of Hepatitis B to patients by medical personnel?

SECRETARY FOR HEALTH AND WELFARE: Mr President,

In the past three years, there has not been any notifiable reports of Hepatitis B being transmitted to patients by health care personnel during invasive operations using sharp instruments in hospitals under the management of the Hospital Authority. As a point for Members' information, multi-disciplinary committees have been established in all public hospitals to enforce proper infection control measures and infectious diseases surveillance.
To reduce the risk of Hepatitis B virus (HBV) transmission, the Department of Health has formulated two sets of guidelines entitled "Procedure for Management of Needlestick Injury or Mucosal Contact with Blood or Body Fluids" and "Preventing Hepatitis B Transmission in Health Care Settings ─ Guidelines and Practices" respectively. The first set of these guidelines has been updated three times since 1992, and the second set was promulgated as recently as May 1995.

The focus of these guidelines is on the adoption of quality infection control practice, provision of vaccination, and effective management of occupational exposure. The guidelines are distributed on a regular basis to all public and private hospitals as well as service units operated by the Department of Health to remind health care personnel of appropriate procedures to be adopted in order to prevent HBV transmission.

Development of Capital-intensive/High-tech Industries

15.MR HENRY TANG asked (in Chinese): The relocation of manufacturing processes to mainland China has resulted in the gradual transformation of the territory economy from one which relies on low-cost and labour-intensive industries to one which is dominated by capital-intensive and service industries. In view of this, will the Government inform this Council:

whether it has conducted studies to ascertain which capital-intensive or medium- and high-technology industries are more intensively developed in the territory at present; if so, at what stages are such industries being developed, and how do they compare with those in Singapore, Taiwan and Korea; and
whether it will consider co-operating further with scientific and technological research institutions in China so as to bring their expertise into the territory and apply it to product development locally, if so, what are the details and what is the progress?

SECRETARY FOR TRADE AND INDUSTRY: Mr President, the Industry Department conducts, on a regular basis, studies and surveys on the manufacturing industry. These studies analyze the strengths and weaknesses of specific industrial sectors and make recommendations on how the Government could assist to enhance their capability for high value-added production. The most intensively developed capital-intensive and higher technology industries covered by these surveys and studies include the production of liquid crystal displays, micro-motors, printed circuit boards, integrated circuit assembly, plastic injection moulding machinery, die-casting, micro-batteries, and transistors. In these areas, Hong Kong enjoys a leading position both in terms of volume production and technology level among the other Asian developing economies. In addition, the linkage industry which converts raw materials into semi-manufactured parts and components, the printing and computer software industries are also growing well. And the technology level of the computer software industry is comparable to that of industry leaders in the region, and the total value of output is just behind Taiwan.

Effective and productive technology collaboration with China must be market-driven. Already there is a considerable degree of collaboration between research/tertiary institutions in Hong Kong and those in China. Some of our industrialists are also making use of Chinese technology resources in their production processes. In addition, since June this year, the Government has operated a financial assistance scheme aimed at encouraging and facilitating local companies to undertake applied research and product development projects which draw on research and development (R&D) and technological expertise in China. The scheme, called the Co-operative Applied Research and Development Scheme (CARDS), offers funds up to 75% of the cost of an approved applied R&D project provided it is to be undertaken by a project team comprising relevant researchers from research/tertiary institutions in China and Hong Kong. So far, three projects in the telecommunication and biotechnology fields have been approved, with a commitment totalling $16 million under the scheme. The Administration will continue to explore opportunities for further technology co-operation with China.

Vietnamese Migrants Spared Prosecution

16.MR AMBROSE LAU asked (in Chinese): It is reported that the Legal Department has decided not to prosecute four Vietnamese migrants (VMs) who were suspected of assaulting law enforcement officers during the disturbance which took place at the Whitehead Detention Centre in May this year. According to the report, both the Correctional Services Department (which is responsible for the transfer operations of VMs) and the Police Force Council (which represents the four staff associations of the Police Force) are dissatisfied with the Legal Department's decision as it may set a precedent which may give the VMs the misconception that they will not be prosecuted even if they assault law enforcement officers. It is also reported that some CSD officers with five to ten years' service have recently applied for transfer to the hawker control teams. In view of this, will the Government inform this Council:

of the reasons for not prosecuting the VMs; and
what measures will be taken to boost the morale of members of the disciplined services responsible for transfer operations of VMs and to retain them in the service?

SECRETARY FOR SECURITY: Mr President, it is not the practice of the Attorney General Chambers to disclose the reasons for pursuing or not pursuing a particular prosecution. Each case is considered on its own merits. The decision not to prosecute any persons arising from the operation in May to remove Vietnamese migrants from the Whitehead Detention Centre was made after the most careful consideration of all relevant factors. These factors included the quality of the evidence gathered, the surrounding circumstances of any alleged offences, how serious the alleged offences were, what the practical effects were, whether there were any extenuating circumstances, and how any decision to launch a prosecution might affect other people. In coming to the decision not to prosecute, the Attorney General had to assess where the interests of public justice lie.

The Administration can however confirm that there is no policy that Vietnamese migrants are exempted from prosecution. No one in Hong Kong is above the law.

The disciplined services have demonstrated exemplary professionalism and restraint in dealing with difficult and sometimes dangerous situations. The Administration and the senior management of the Police Force and the Correctional Services Department (CSD) are aware of the concerns of the staff, which are currently addressed effectively through various channels. The Administration will continue to resolve difficulties faced by the disciplined services through these well-established channels. We have recently taken steps to improve the quality of protective equipment used in transfer operations. The Commissioner of Correctional Services is liaising closely with the staff of his Department. The staff are encouraged to use departmental liaison channels to discuss their concerns, so that the Commissioner and other parts of the Administration may ensure that working conditions are maintained at as high a standard as possible.

As regards reports that experienced CSD officers have applied to join the hawker control teams, the facts are as follows:

up to October in 1995, 49 CSD officers at Assistant Officer II (AOII) rank, which is the recruitment rank, have transferred to the hawker control team. No officers at the more senior posts have transferred; and
this figure represents a very small proportion (1.68%) of CSD officers at the AO II rank.

The wastage rate of the Correctional Services Officers, at 5.7%, is within normal acceptable levels, and has indeed improved over the years. There is also no difficulty in recruitment to fill vacancies, as evidenced by the fact that 6 795 candidates applied for 245 posts during the last nine months.

Government Enquiry Hotline Services

17.MR ALBERT CHAN asked (in Chinese): In his reply to a question on enquiry hot-lines provided by the Government which I raised in this Council in May this year, the Chief Secretary stated that government departments would continue to keep under constant review the possibility of installing more communication devices and making other improvements to enhance the services provided by the enquiry hot-lines. However, the enquiry hot-lines service provided by government departments still varies greatly in quality. In this connection, will the Government inform this Council:

whether it has conducted a review of the enquiry hot-lines service provided by various government departments since May this year; if so, what are the findings; and
what measures the Government has put in place to improve the enquily hot-lines service in departments such as the Legal Aid Department and the Immigration Department where the public have experienced difficulties in putting a call through?

CHIEF SECRETARY: Mr President,

In order to obtain an overview on telephone services provided by government departments, the Efficiency Unit co-ordinated a data gathering exercise from June to September this year. For the purpose of this exercise, we defined a hotline to be a telephone service which provides direct and immediate access to members of staff. Information so gathered indicated that there are currently some 47 hotlines in 26 departments. These hotlines are supported by some 135 telephone lines of which 81 operate an eight-hour service, 13 operate a 16-hour service, and 41 operate a 24-hour service.
From January to August this year, these hotlines handled an average of some 1 400 calls per month each, or 66 000 in total.
In addition, some 27 departments operate automated telephone enquiry systems, offering 24-hour services which are sometimes classified as hotlines.
The Director of Legal Aid and the Director of Immigration are responsible for the quality of service, including telephone services, provided by their departments.
In May this year, the Immigration Department conducted a review of their automated telephone enquiry system. As a result, the Department is exploring means to
1. promote the use of enquiry services outside office hours, on television and through guidance leaflets and posters;
2. increase the number of telephone enquiry lines; and
3. increase the number of staff allocated to manning telephone services.

In July 1994, the Legal Aid Department introduced an automated telephone enquiry system supported by eight telephone lines and a facsimile line. Following a recent review of the service, the Department will shortly change the structure of the recorded answers, so that the most popular questions can be dealt with more efficiently.

Following the data gathering exercise, the Efficiency Unit is considering what guidelines might be issued to departments on telephone services, and on performance measures which should be considered.

Job Protection for Workers of Declining Industries

18.MR LEUNG YIU-CHUNG asked (in Chinese): Will the Government inform this Council:

of the respective numbers of factories in the textiles, clothing and spinning industries which have closed down over the past three years, as well as the number of workers dismissed as a result of the closure of these factories; and
whether it has any interim measures and long-term policies to assist these declining industries and to provide protection for those workers who are left jobless as a result of the closure of factories in these industries?

SECRETARY FOR EDUCATION AND MANPOWER: Mr President,

We have no statistics on the number of textiles and clothing factories which have closed down during the past three years, or the number of workers affected by such closures. Statistics are however collected on the number of establishments and workers engaged in the textiles and clothing industries. It is however not possible to ascertain from the aggregate statistics for the past three years as shown in the Annex the number of such establishments which have closed down and the number of workers affected.
The Government has been encouraging the manufacturing industries to improve their competitiveness through increasing productivity and producing higher value-added products. We have adopted the following measures in respect of the textile and clothing industry:
1. conducting consultancy studies regularly to assist the textiles and clothing industries to assess their strengths, weaknesses, opportunities and threats;
2. providing facilities to help the textiles and clothing industries to improve their productivity and operational efficiency, such as the Clothing Technology Demonstration Centre and the Quick Response Centre;
3. working closely with tertiary educational institutions, the Vocational Training Council, the Hong Kong Productivity Council and the Clothing Industry Training Authority to develop consultancy services and training programmes for the industries; and
4. funding, through the Industrial Support Fund, projects which are conducive to the technological development of the textile and clothing industries as a whole, such as those which will facilitate the industries to shift to higher-tech, higher value-added production.
Workers affected by the closure of factories in the textiles, clothing and spinning industries are protected by provisions under the Employment Ordinance (Cap. 57) governing benefits for employees who are dismissed or retrenched by their employers. These include payment of wages, wages in lieu of notice, annual leave pay, end of year payment, severance payment and long service payment. In case of disputes over such payments, the Labour Department will provide conciliation service to assist both the employers and the employees involved to come to a settlement. Employees who are owed wages, wages in lieu of notice and severance payment by their insolvent employers may also apply for ex gratia payment from the Protection of Wages on Insolvency Fund.
The Labour Department provides free employment and counselling services for all job-seekers through its network of nine offices in the territory. It has been offering a series of employment assistance services to dismissed and retrenched workers. Also available to these workers are the Outreaching Placement Service which provides on-the-spot assistance to workers affected by major retrenchments, and the Job Matching Programme which provides unemployed workers aged 30 or above with targeted and personalized services to match them with job vacancies.
Workers affected by retrenchments may also apply to the Employees Retraining Board for enrolment in suitable retraining courses so as to equip themselves with marketable skills to re-enter the workforce.

Number of Establishments and Persons Engaged in Hong Kong's Clothing and Textiles Industries, 1992-1994

	Clothing Industry		Textiles Industry (other than spinning)		Spinning
	No. of Establishments	No. of Persons Engaged	No. of Establishments	No. of Persons Engaged	No. of Establishments	No. of Persons Engaged

1992	6,980#	186,607#	3,282*#	53,340*#	..	..
	(16.6)	(32.7)	(7.8)	(9.3）

1993	6,943	167,273	2,809	39,204	78	4,502
	(17.7)	(32.9)	(7.2)	(7.7)	(0.2)	(0.9)

1994	5,628	137,287	2,430	31 956	52	3,898
	(16.5)	(31.3)	(7.1)	(7.3)	(0.2)	(0.9)
Notes:	(1)	Figures in brackets denote the percentage share of all manufacturing industries in the respective year.
	(2)	# In 1992, hosiery, knitted underwear and wrist watch bands were classified under the textiles industry, instead of the clothing industry.
	(3)	* As the Survey of Employment, Vacancies and Payroll was conducted as a sample survey instead of a full renumeration for the industrial sector in 1992, the 1992 figures for spinning are not available. The 1992 figures for the textiles industry (other than spinning) cover the entire textiles industry (including spinning). denotes not available
Sources:		Report of Employment, Vacancies and Payroll Statistics, Census and Statistics Department

Land-use Planning for Kai Tak Site

19.MR LEE WING-TAT asked (in Chinese): With regard to the land-use planning of the land to be released upon the relocation of the existing Airport, will the Government inform this Council:

of the progress of the above-mentioned planning work;
of the initial ratio of various land uses (such as public housing, Home Ownership Scheme estates, private housing and so on) designated in the preliminary planning stage; and
whether the development of the land in question will have any strategic role to play in the overall development and urban redevelopment of Kowloon; if so, what are the details?

SECRETARY FOR PLANNING, ENVIRONMENT AND LANDS: Mr President,

A development statement for Southeast Kowloon covering the site of the existing airport, Kowloon Bay and adjoining areas in Kowloon City-Kowloon Bay was completed in September 1993. Based on the development statement, an outline development plan was produced. The results of the study were presented inter alia, to the Town Planning Board (in June 1994), the Kowloon City and Kwun Tong District Boards (in June and July 1994), and the Panel on Planning, Lands and Works of this Council (in May 1994).
Detailed consultancy studies were commissioned by Project Manager/Kowloon in September 1995 to examine the engineering feasibility of the required works, to make necessary adjustments to planning proposals, to focus on the preparation of detailed development proposals for the initial phases and to formulate ideas for the temporary uses of sites. The study is expected to be completed in May 1997.
In broad terms, the development statement proposals provide for the following breakdown of land uses for the newly planned areas to be carried forward for testing by the feasibility studies being carried out by Project Manager/Kowloon:

Uses	Hectares
Commercial	26
Public Housing	44
Private Housing	102
Industrial	41
Government,Institutional, Community	84
Open Space	208
Roads/Other	70
	575

The above land use proposals would be adjusted in the light of the results of the feasibility studies.

To implement the Metroplan Selected Strategy, new development areas proposed in the development statement are intended to provide "solution spaces" both to facilitate the restructuring of obsolete areas in Kowloon and also to help meet territorial land use needs for infrastructural provision. Of particular importance will be the reservation of sites for the rehousing of people affected by redevelopment schemes undertaken by such bodies as the Housing Authority, the Housing Society and the Land Development Corporation. In this connection, studies are being undertaken to quantify potential housing needs that could arise over the long term in the broad areas of Central-East Kowloon. Specific sites required for rehousing will be identified from the detailed studies now being undertaken by Project Manager/Kowloon.

Pollutants Discharged by Dry Cleaning Industry

20.DR JOHN TSE asked: Will the Government inform this Council:

what are the pollutants discharged from the dry cleaning industry in the territory;
whether these pollutants (for example, tetrachloroethylene) have harmful effects on public health; if so, what measures the Government will take to safeguard the health of residents living near dry cleaning establishments and to ensure that they will not suffer from the steam and heat generated from these establishments;
whether there are any established limits for occupational exposure to carcinogenic agents for the dry cleaning industry; if so, whether dry cleaning workers are considered vulnerable to known occupational diseases, and
whether there are long-term plans and strategies in dealing with the hazardous air pollutants discharged from the dry cleaning industry; if so, what are the details?

SECRETARY FOR PLANNING, ENVIRONMENT AND LANDS: Mr President,

Pollutants discharged from dry cleaning include 111-tichloroethane and perchloroethylene (tetachloroethylene).
111-tichloroethane is not a carcinogen. Perchloroethylene has been classified as an animal carcinogen but there is no conclusive evidence of its carcinogenic effect on human beings. However, at high concentrations, both these chemicals may cause eye irritation and liver, kidney and neurological malfunctioning. The ambient levels of these chemicals in areas around dry cleaning establishments are nevertheless normally well below the World Health Organization guidelines. If excessive emissions from these establishments cause environmental nuisance, an abatement notice can be issued under the Air Pollution Control Ordinance to require improvement. Enforcement action can also be taken against unpleasant steam and heat from the ventilation systems under the Public Health and Municipal Services Ordinance, but we have not received any complaint of this nature in the past few years.
There are occupational exposure limits for the chemicals used by the dry cleaning industry, which have built in a wide safety margin to prevent possible health impacts. A recent sampling study on the dry cleaning industry has confirmed that the limits are adhered to. Good workplace practices such as adequate ventilation, wearing of protective equipment and proper hygiene habits can further minimize laundry workers' exposure to these chemicals. A health education booklet on solvents has been published to advise workers and proprietors on the proper use of these chemicals. In addition, the Labour Department is preparing an occupational health leaflet on measures to prevent health hazards specifically for the laundry industry.
According to 1994 statistics, there are no confirmed occupational diseases among workers in the dry cleaning industry.
111-tricholoroethane is a controlled substance under the Ozone Layer Protection Ordinance. Its import will be banned from 1996. Perchloroethylene is one of the chemicals being considered in a preliminary study on toxic air pollutants. Subject to the findings of the study, which will be completed in late 1995, we shall consider the need for additional control measures, such as mandatory use of dry cleaning machines with closed systems and solvent recovery features.

BILL

First Reading of Bill

REHABILITATION OF OFFENDERS (AMENDMENT) BILL 1995

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

Second Reading of Bill

REHABILITATION OF OFFENDERS (AMENDMENT) BILL 1995

THE SECRETARY FOR SECURITY to move the Second Reading of: "A Bill to amend the Rehabilitation of Offenders Ordinance."

SECRETARY FOR SECURITY (in Cantonese): Mr President, I move that the Rehabilitation of Offenders (Amendment) Bill 1995 be read the Second time. The Bill seeks to expand the scope of the rehabilitation scheme under the Rehabilitation of Offenders Ordinance so that more people who have committed minor offences can benefit.

The current rehabilitation scheme provides that where a person, on a first conviction, was not sentenced to imprisonment or a fine exceeding $5,000, the conviction can be regarded as spent for most proposes after three years so long as he has no further conviction. The person concerned is permitted to say nothing about his/her previous conviction in his/her business and social dealings, such as in applications for jobs, hire purchases, and the like. Moreover, the person cannot lawfully be refused employment or admission to a profession on account of his/her spent conviction. Unauthorized disclosure of a spent conviction is an offence.

Taking account of the views of the public on various proposals to improve the scheme, the Fight Crime Committee has made a number of recommendations which are incorporated into the Bill now put before Members.

We propose that the scheme should be expanded to cover persons who, on a first conviction, are sentenced to imprisonment for not more than three months or a fine not exceeding $10,000. We also propose that persons who have been convicted of triad related offences, but have subsequently renounced their triad membership under the Triad Renunciation Scheme, should be covered by the scheme, provided that they meet the other criteria.

Payments under the fixed penalty scheme and other minor traffic convictions are proposed to be spent immediately without the waiting period of three years. Nevertheless, for public safety reasons, we propose that for vocational drivers, such payments and convictions should only be spent after a period of three years, so as to enable transport operators to take into account the vocational drivers' traffic conviction records in determining their applications for employment.

Another change we propose to the existing scheme is that convictions should be "once spent, always spent". That is to say, where a convicted person is not reconvicted after three years, then his first conviction will become spent and will not revive, even if he were convicted of another offence at a later date. Having said that, the second offence will not be allowed to be spent, lest it might lead to a loss of deterrence against repeated offenders of minor crimes. Moreover, arrangements will be made to enable the spent conviction of a reconverted person to be brought to the attention of the court for sentencing purposes to avoid a repeated offender being treated as a first time offender.

The present scheme does not apply to certain professions and public offices where the public has a right to expect the highest standard of probity. Following this principle, we now propose further exclusions to the scheme. These include certain proceedings under the Banking Ordinance and the Insurance Companies Ordinance; and the staff of the Independent Commission Against Corruption (ICAC), the Securities and Futures Commission (SFC), the Hong Kong Monetary Authority and the Office of the Commissioner of Insurance.

We also propose to exclude proceedings relating to the determination of an application as a foster parent from the scheme, so as to allow the Director of Social Welfare to admit any evidence relating to spent convictions of a person in assessing his or her suitability as a foster parent. This will better protect the interests of those children who will be placed under foster care service.

Mr President, the proposals I have outlined above seek to strike the right balance between allowing more people to benefit from the rehabilitation scheme, and ensuring that public expectations of probity in certain positions will not be at stake.

Thank you, Mr President.

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

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

MEMBER'S MOTIONS

PRESIDENT: I have accepted the recommendations of the House Committee as to the time limits on speeches for the motion debates and Members were informed by circular on 20 November. The movers of the motions will have 15 minutes for their speeches including their replies and another five minutes to speak on the proposed amendments. Other Members, including the movers of the amendments, will have seven minutes for their speeches. Under Standing Order 27A, I am required to direct any Member speaking in excess of the specified time to discontinue his speech.

MONITORING OF GAS SUPPLY AND CHARGES

MR LAU CHIN-SHEK to move the following motion:

"That this Council urges the Government to promptly study and respond to the Consumer Council's "Report on Assessing Competition In Domestic Water-heating And Cooking Fuel Market", and introduce legislation to regulate domestic fuel suppliers, in particular the Hong Kong and China Gas Company Limited, in regard to their fuel supply and charges, in order to protect the interests of consumers."

MR LAU CHIN-SHEK (in Cantonese): Mr President, I move the motion standing in my name on the Order Paper.

Purpose of the motion

Mr President, my motion today is on a bread-and-butter issue. The aim is to urge the Government to consider and respond to the proposals of the Consumer Council (CC)'s Report as soon as possible. What I consider most important is the need to regulate the services and charges of all fuel gas suppliers (especially the Gas Company) through the introduction of legislation by the Government, so that all public utilities which affect people's livelihood will come under Government control so as to safeguard the public interest. Although the Government is yet to conclude its study of the proposals of the CC, I believe today's motion is still of considerable value because it is hoped that the views of the Legislative Councillors, which represent public opinions, will be fully considered before the Government arrives at any decision.

Imperfect competition caused by legislation

The Government has refused to introduce legislative control over the Gas Company and liquefied petroleum gas (LPG) suppliers for years on the plausible excuse that competition in the domestic fuel market was already very keen, thereby providing various choices for the public, so the right of consumers was adequately protected in the context of such market competition. However, as stated in the Report of the CC, the local domestic fuel market obviously provides for imperfect competition only, giving the Gas Company a monopolizing edge on which basis it can adjust its tariffs at will. The consumers hardly have any other choices.

Firstly, in the aspects of legal and technical control, the Government stated it was for the sake of public safety that section 17 of the Gas Safety (Gas Supply) Regulations stipulated: "No person shall install a gas main for the conveyance of liquefied petroleum gas along or across a road". This regulation has made it impossible for the piped LPG companies to set up a territory or district-wide transmission system like the Gas Company, immensely affecting the competition among fuel gas suppliers.

At present, if the piped LPG suppliers wish to supply domestic LPG, they have to build special storage facilities in the vicinity of the housing estate concerned. No residential unit can be built over the top or within a certain distance of such facilities. The developer of the housing estate would of course not be faced with such restrictions if they use coal gas. Since the developer has to allocate land for the LPG supplier to build the storage facilities, the supplier often needs to pay pecuniary compensation to the developer to cover his loss caused by such allocation. Since land price is exorbitant in Hong Kong, the amount of compensation will definitely be significant. As a result, piped LPG is at a disadvantage in the competition for new markets with coal gas.

Also, the residents will worry about their safety if there is a large LPG store near their housing estate. In fact, some Tuen Mun residents have even requested that the piped LPG store in the district be dismantled. The residents' concern over the safety of the LPG store is one of the contributing factors to make coal gas more popular.

The discriminatory public of the Housing Authority (HA)

Apart from government legislation, our largest housing developer, the HA, has also implemented a discriminatory policy since 1987 which enabled the Gas Company to monopolize the fuel gas market in new public housing estates. The HA issued an internal directive in 1987 on the criterion in choosing energy supply for its public housing estates or Home Ownership flats: if there is already coal gas supply in the district, or such supply is promised before the completion of the public housing estate or Home Ownership flats concerned, coal gas should be chosen; piped LPG will only be considered in areas where coal gas is not available (for example, the outlying islands). In other words, coal gas is given priority by the HA. As the areas in which the Gas Company can set up its transmission system continue to expand, piped LPG will gradually be eliminated from public housing estates.

Indeed, the LPG suppliers have always been dissatisfied with the discriminatory policy of the HA. They lodged a complaint with the Panel on Economic Services and Public Utilities of this Council in 1993. Consequently, under pressure from Members in this Council, the Government promised to launch a pilot scheme on introducing piped LPG into future new public housing estates. Regrettably, the Government announced in July this year that the scheme was withdrawn due to safety and management problems.

We have gone a long way, but are back to where we began. The monopoly of coal gas in public housing estates will not see any changes in the short run.

Scarcity of substitutes for fuel gas

The Gas Company has stressed that competition existed in the fuel market because any member of the public not wishing to use coal gas could switch to electricity or bottled LPG. However, as the Report of the CC has pointed out, Chinese people like to use "visible flame" in cooking, therefore fuel gas cannot be totally replaced by electricity. As for water heater, those run on electricity cannot give instant hot water like those run on coal gas. Electricity is therefore not an effective substitute for gas. About switching to bottled LPG, frankly speaking, if gas cooker has already been installed by the developer when you move into a flat, how many people will choose not to use the handy coal gas and buy LPG in cylinders which are bulky and space-taking?

There is factual evidence to show that, owing to technical reasons and habitual practice, the chances of switching between different domestic energy sources are very slim. The figures provided by the Gas Company can also bear this out. At present, 90% of the households which have access to coal gas have installed gas meters, among which 95% are active users of coal gas. Up till now, over 1 million households have used coal gas, accounting for more than half of the total number of families in Hong Kong. As regards fuel consumption, there has been a steady increase in the consumption of coal gas in recent years, but that of bottled and piped LPG has shown a reverse trend during the same period.

Ever-rising profit ratio of coal gas

It has been said that the success of the Gas Company was result of its good service, so it would be unreasonable to harbour jealousy against it for its enormous profit. Undoubtedly, the service of the Gas Company is not bad, and we should pay tribute to it. However, we have grounds to query whether the tariffs for coal gas are reasonable. The Company has repeatedly pointed out that in the past decade, the average increase in gas tariffs was only 50% of the inflation rate. But if we look at the increase in the cost of the Company at the same time, we will come to a different conclusion. During the past decade, the major cost of the Company, that was the fuel, has been decreasing in real value. However, the actual reduction in gas tariffs was less than 50% of the decrease in the cost of fuel. As a result, the net profit ratio of the Company as against its sales value has continued to rise. 10 years ago, for every $10 paid on gas tariffs, the shareholders of the Gas Company would receive $1.5. Today, the shareholders can receive over $3 for every $10 we pay. Do you think this is reasonable?

Long road to fair competition

Owing to the above reasons, before the publication of the CC's Report, it has already been proposed that the fuel gas market should be opened, and I also fully supported the proposal on bringing in more competition. As I have just mentioned, the LPG suppliers made a request in 1993 urging the HA to abandon its discriminatory policy on fuel supply in public housing estates. Regrettably, after studying the issue for over a year, the Government aborted the scheme.

The most effective way of bringing in competition at present is undoubtedly the proposal of the CC on the "common carrier" gas distribution system. However, if the use of pipes is to be shared, the most immediate technical problem is the introduction of natural gas because coal gas and LPG cannot use a "common carrier". But natural gas is not yet commonly used in Hong Kong as fuel. Although the future power plant of China Light and Power Company Limited in Black Point is planned with a view to introduce natural gas from Hainan Island as fuel, yet the reliability of transmitting natural gas is still under observation. Besides, the adoption of the "common carrier" system needs agreement from the Gas Company because all existing gas pipes have been fully funded by the company. I believe one great problem in future will be the calculation of rental for the new supplier to hire the pipes from the Gas Company.

In any case, I request the Government to expedite the study on the feasibility of bringing in competition by means of the "common carrier" system, and to promote competition in the fuel gas market to safeguard the interests of consumers.

Why be scared of regulation?

It is unlikely that competition can be brought in within a short time, so the most immediate task at present is to legislate for the regulation of the services and tariffs of all fuel gas suppliers to protect the right of consumers.

Yesterday, the Gas Company made a strongly worded statement protesting against our motion today. It also accused me of attempting to exert pressure on the Government to make it agree to regulate the Company. In the face of such a statement by the Gas Company, I am completely baffled.

The Government is definitely obligated to monitor on behalf of the people a public utility company which operation guatly affects the people's livelihood. In fact, all the public utilities are now subject to a certain degree of regulation so why should the Gas Company ask to be made an exception? If it is a well-operated company providing high quality services , why would it be afraid of being monitored? Besides, my motion asks for the monitoring of all fuel gas suppliers, including both coal gas and LPG, why then is Gas Company the only one to react so strongly?

It has been argued that a public utility will lose its vitality if it is regulated. However, the two electricity companies, which are larger in scale and also non-franchised as the Gas Company, have long been put under comprehensive Government regulation. Yet we have never heard of any complaint from them alleging any loss in vitality due to such regulation.

Furthermore, the Gas Company has pointed out that the Legislative Council should not make any rash decision on the imposition of regulation before it had a chance to listen to the explanation of the Company. But, after the publication of the CC's Report in July, the Company did respond with a high profile. I have also received the representation of the Company refuting the CC's views, and I have already fully digested the views of the Company in the past few months. As regards other colleagues in this Council, I believe you must have received many explanations and met with much lobbying by the Gas Company in the past week, and you must be familiar with the viewpoints of the Company.

Indeed, apart from watching the tariffs, a comprehensive monitoring system should include the supervision of the Company's development plan, fuel procurement policy, network development, financial forecast and quality of service. In a while, my colleagues will go into the detail of the relevant proposals.

As for tariffs, I would suggest that in legislating for the regulation of suppliers of fuel gas, the Government should consider the "price cap" option proposed by the CC. It may even stipulate in the legislation that all domestic fuel gas suppliers must obtain prior Government approval if they want to raise tariffs, through such mechanisms as approval by the Executive Council, or tabling in this Council for deliberation in the form of subsidiary legislation. In this way, we can ensure that the rate of future price increases in coal gas and LPG will be accepted by the public, and the interests of consumers can then be safeguarded.

Mr President, these are my remarks, I beg to move.

Question on the motion proposed.

PRESIDENT: Dr LAW Cheung-kwok has given notice to move an amendment to the motion. Dr LAW's amendment has been printed on the Order Paper and circularized to Members. I propose to call on him to speak and to move his amendment now so that Members may debate the motion and the amendment together.

DR LAW CHEUNG-KWOK's amendment to MR LAU CHIN-SHEK's motion:

"To insert after "That" the following", in view of the fact that the Hong Kong and China Gas Company Limited already has a market share of over 50% in the domestic water-heating and cooking fuel market,"; and to delete "promptly study and respond to the Consumer Council's 'Report on Assessing Competition In Domestic Water-heating And Cooking Fuel Market', and introduce legislation to regulate domestic fuel suppliers, in particular the Hong Kong and China Gas Company Limited, in regard to their fuel supply and charges" and substitute with "actively consider bringing in new suppliers and to promptly introduce legislation to regulate the operation of the gas company"."

DR LAW CHEUNG-KWOK (in Cantonese): Mr President, I move that the Honourable LAU Chin-shek's motion be amended as set out under my name in the Order Paper.

In view of the fact that the Hong Kong and China Gas Company Limited (the Gas Company) already has a market share of over 50% in the domestic water-heating and cooking fuel market, and that the Gas Company is using its monopolistic muscles to unjustly prejudice the interests of consumers and competitors, I thus make a direct proposal urging the Government to actively consider bringing in new suppliers and to promptly introduce legislation to regulate the operation of the Gas Company so as to safeguard the interests of consumers.

At present, the transmission pipes of the Gas Company can reach 80% of the households in Hong Kong. In fact, 51% of the families in Hong Kong are using towngas. According to a report compiled by the Consumer Council (the CC), in 1993, the Gas Company already had a market share of 66%. Although the Gas Company was rather humble in stating that it had a market share of only 40% to 50%, undeniably, its market share is substantial and its influence exceptionally great, with a tendency to expand the coverage of its monopoly. The service provided by the Gas Company is a domestic necessity but is, surprisingly, not government-regulated. This is very unfair to consumers. Under the Fair Trading Act 1973 in Britain, the supply of goods and specified services shall by law be deemed monopolizing when it occupies 25% of the domestic market. In Germany, the same definition applies in the case of a one-third market share, that is 33%. Although there are no explicit provisions regarding market monopoly in the laws of the United States, it can be clearly seen that in the course of enforcing the laws, market share is taken as a major basis on which study and law enforcement are carried out.

The Gas Company has been emphasizing that it had to face fierce competition, and consumers did have a number of choices in fuel supply. Just now, Mr LAU Chin-shek has pointed out clearly that existing laws or arrangements basically denied suppliers of liquefied petroleum gas any chance to compete with the Gas Company. One must not forget that the main shareholder of the Gas Company is a major land developer, having close connection with a large number of land developers. On completion, most new buildings have been installed with (coal) gas water heaters. After the residents move in, they have practically no chance or would find it relatively inconvenient to switch to alternative fuel supplies.

As regards charges, the Gas Company has clearly manipulated its control of the market to enhance its profits. From 1985 to 1994, the average cost of production for the Gas Company rose by only 30% but the charges it collected rose by 43%, despite the Company's constant claim that charge increases have been lower than the inflation rate. If the Gas Company operates in a market open to fair competition, it should increase its changes by a rate more or less similar to the increase in the cost of production. However, in the 10-year period mentioned, it can be seen that the Gas Company had adequate monopolistic muscles in the market to incessantly increase prices on top of increases in cost, thereby prejudicing the interests of consumers.

The sales profit margin of the Gas Company has risen from 19% in 1985 to 37% in 1994. According to the Consumer Council's report, during the period 1985-1994, the rate of return for the five major electricity and gas companies in the United States was only 3.6% while that for the Gas Company was 16%.

Owing to the system of piped fuel gas supply, and taking into consideration of our existing technology level and economic condition, it is extremely unlikely that we would have a second gas company. Another major factor hindering competition is the fact that the Gas Company has long been reluctant to use the much less costly natural gas, thus replacing its existing production technology; and the reluctance to adopt new technologies is one characteristic of enterprises that enjoy monopoly.

As enterprise may have a relatively large market share for a variety of reasons, and such a situation is no grounds for necessitating regulation. If, however, the enterprise unjustifiably uses its influence on the market to unfairly prejudice the interests of consumers and competitors, that situation will become an important consideration in deciding whether or not regulation should be imposed.

From the above analysis, we feel there are sufficient grounds to urge the Government to promptly introduce legislation to regulate the Gas Company. I reiterate below my main arguments:

The Gas Company already has a very big market share which shows a tendency to further expand;
The modus operandi of the Gas Company demonstrates great exclusiveness in respect of its competitors;
The charge adjustment policy of the Gas Company is not related to changes in cost;
The profits of the Gas Company are considered too high.
The market has long been a closed one and lacks competitors.

We propose that the Government should in the long run consider bringing in new competitors. The Government must sensibly split the current business of the Gas Company into the areas of production, transmission and supply of gas before competitors can actually be brought in. In the short run, the Government should introduce legislation to regulate the operation of the Gas Company. Such legislation may be modelled on the regulatory rules for the China Light and Power Company Limited or the Hongkong Telecom with a view to protecting the interests of consumers.

With these remarks, I move my amendment.

Question on Dr LAW Cheung-kwok's amendment proposed.

MR HENRY TANG (in Cantonese): Mr President, I do not consider putting everything under legislative regulation to be the best way to protect consumer rights and interests. This is especially true in today's circumstances, when Hong Kong needs to boost her economic development and to make investors confident in putting their investment here. I doubt the advisability of any sensible decision to carry out rapid reforms rashly and set down various barriers to twist the natural market law of free competition.

Is the Hong Kong and China Gas Company Limited (the Gas Company) monopolizing the market? Are the consumers' rights and interests being encroached upon and in need of protection by way of regulation through legislation? I still have reservations for the time being. The Legislative Council Panel on Economic Services has invited representatives of the Consumer Council and the Gas Company to attend a meeting next month to express their views, and the Government will complete its report in January next year in response to the report of the Consumer Council. Therefore, before a comprehensive study on the information provided by all parties involved is available, I cannot blindly support the Honourable LAU Chin-shek's motion or Dr the Honourable LAW Cheung-kwok's amendment. I hope that the Government will submit the said report to this Council as soon as possible. I believe that before examining any legislation or policy, a Legislative Councillor should gain a full understanding of all issues and views involved before making the final decision. Only then can he be considered responsible in the discharge of his duties.

The Consumer Council claimed that the Gas Company had a 66% market share in the fuel gas supply for the territory, and shown a trend of continuous expansion of its monopoly of the market. Mr President, I agree that when the development of a public utilities organization continues to expand, resulting in a gradual monopolization of the market, there is a possibility that it may raise its charges arbitrarily, thereby putting consumers in an unfavourable position. Yet, before considering the introduction of legislation for regulation, should we not actively study the ways to enhance competition in the market first, so as to strike a balance between safeguarding the public interest and non-interference in the operation of private enterprises?

In fact, the Gas Company is currently not without competitors, nor has the Government forbidden new competitors to join the market. The problems for the competitors are the need to put in huge capital investment and the acceptance of the long wait for a progressive increase in the market share. If these problems can be solved, and consumers can make their choices by carefully comparing the prices and service qualities of the various competitors, it should not be difficult to obtain a basically reasonable and fair utility service.

Conversely speaking, the Government's arbitrary interference in the market often results in numerous problems. For example, the taxi licensing system has led to the monopolization and speculation of taxi licences by prominent taxi traders. Some laws for the regulation of franchised utilities have also created many monopolies in the past. Although the market was opened recently, many potential investors had already been deterred from entering the market. The public bus and telecommunication services are two of the examples. The fact that we are against monopolization of the market makes it all the more difficult for me to support the idea of the Government interfering in the free movement into and out of the market by means of legislation or franchising. Mr President, once the Government regulates the Gas Company by statute and sets a ceiling for its charges, it is tantamount to admitting that the Company should be accorded a franchise. By then, it is not only hard to introduce new competition into the market, also the Company may ask for a profit guarantee. According to statistics provided by the Gas Company, if it had aimed at the same return rate in its operation as that of the China Light and Power Company Limited (China Light) in the past decade, it would have made extra profit of 140 million. I wonder if this is what everyone wishes.

Mr President, frankly speaking, I do not want to comment on whether the Gas Company is showing a trend in monopolizing the market. The Government has also stated earlier that it did not consider there were any signs of such a trend. The charge regulation suggested by the Consumer Council is to allow the Gas Company to raise its charges by a certain percentage point lower than the inflation rate. But the fact is, in the past decade, the average annual increase of the Company's charges was only 4.8% which equalled to only half of the inflation rate, and I have seldom heard people complaining that the increase in gas charges was unacceptable. On the contrary, people's protests against the increases in taxi and bus fares were much more vigorous. At the same time, when we compare the charges of various fuels, we find that the charge of coal gas is only slightly higher than that of piped liquified petroleum gas (LPG). The charge of gas per megajoule is 16.7 cents which is only 0.1 cent higher than that of piped LPG charged 16.6 cents per megajoule, but is lower than the charges of the two electricity companies and bottled LPG. When the Honourable LAU Chin-shek moved this motion, he stated the reason why a family would not use bottled LPG when moving into a new home. Actually, it is not only for the convenience, but also for the lower cost of coal gas. Therefore, I do not think there is any sign of the Gas Company profiteering because they have a large market share.

Mr President, as for now, I do not want to make any rash judgement before listening to the views of the three parties. Nevertheless, at the present stage I am very much is support of the introduction of natural gas because this is a development target in the long term. I hope the Government and the Gas Company, and even China Light, will actively explore and study the chance of introducing natural gas into Hong Kong. Furthermore, to safeguard the interests of consumers, I suggest that the Gas Company should regularly submit more detailed information of its operation to the Government and the public to enhance its transparency and accountability so that the public can judge whether the Company has been profiteering.

Mr President, I submit these remarks. The Liberal Party will not support the original motion or the amendment.

MR CHAN KAM-LAM (in Cantonese): Mr President,

Free economy be maintained

The Democratic Alliance for the Betterment of Hong Kong (DAB) has always maintained an economic philosophy of a free economy given full play under the principle of fair competition, allowing the people of Hong Kong plenty of opportunities to start their businesses freely, to make the most of their spirit of entrepreneurship and create wealth. However, we firmly oppose monopolized operations that undermine the overall interests of the community. Everything should be start out with the best interests of the people of Hong Kong in mind.

To date, there has not been sufficient discussion in the community on the allegation that the Hong Kong and China Gas Company Limited (the Gas Company) has monopolized the market. The DAB is of the opinion that in order to identify the topic for discussion, we should first gain a clear picture of whether the market share presently enjoyed by the Gas Company is the result of the market having been monopolized, or the result of free competition.

Mr President, we are used to cooking with "visible flame". In the past, most Hong Kong people used kerosene as the main domestic fuel. Later, the safer and more convenient Liquefied Petroleum Gas (LPG) became increasingly popular among Hong Kong people. By 1981, the market share of LPG had come to 50%.

With the change of time and the amendment of the laws to exclude piping works for LPG from public roads, the market share of LPG dropped from 50% in 1981 to the present 37%, while the Gas Company took the opportunity to expand its operation. Today, the market share of the Gas Company has already hit the 51% mark.

At present, whether considered from the technical or the safety point of view, the Gas Company is no doubt better than either LPG or electricity. However, the situation is not necessarily so. In fact, through improvement in technology and productivity, hence lower costs and so more competitive prices, together with effective marketing, the above-mentioned situation can be changed.

There are many factors behind an enterprise's getting a larger market share. Market share alone does not constitute the circumstances for the demand to regulate a certain enterprise. Instead, the DAB is more concerned with the point of whether the enterprise concerned has exercised its latent monopolistic power to unfairly prejudice the interests of consumers and its competitors.

Therefore, we hope the Government will give the public clear answers when it responds to the report of the Consumer Council (CC), including answers to the following:

Whether the allegation made by the CC against the Gas Company should stand?

Whether the Administration has any criteria to determined it an enterprise is monopolizing the market?

How will the Administration open up the energy market?

Regulation no panacea

The DAB attaches great importance to the rights and interests of consumers to such an extent that we have set up a policy sub-group to target on consumer issues. Our past action against foodstuff having exceeded their expiry dates still on sale in supermarkets has won widespread approval from the public.

On the question of regulation, the DAB is for the idea of exercising the necessary intervention in respect of those public utilities that affect people's livelihood. However, we must stress that any form of regulation must be beneficial to consumers while at the same time should not affect the normal operation of the free market.

The DAB is of the view that neither the original motion nor the amendment motion is the best proposal as far as consumers are concerned. Too often, experience tells us that the regulation of a certain enterprise is not necessarily a panacea.

Take for example the existing controlling scheme for public utilities. It has obvious shortcomings. For instance, if we determine the profit margin at a certain percentage on the value of fixed assets, it will encourage enterprises to make unlimited investments on fixed assets. Sometimes, such investments may not even bring any economic benefits but aimed merely at increasing the total value of fixed assets in order to push up the eligible profit ratio, and we have no way to make realistic assessments on whether such investments made by these public utilities are in the interests of consumers!

Positive attitude be adopted in dealing with the issue of opening up the market

The DAB is of the view that if we have the interests of consumers as the foremost preposition, the first priority for the Government now is to ensure that the market remains open, to enhance competition by removing barriers to competition in the market, and to provide consumers with more information on competing products and the market, so that the competitive edge enjoyed by a certain enterprise will be challenged. We firmly believe that under healthy, consumers will be ultimately benefitted from healthy competitors.

Let us take the Gas Company as an example. To remove barriers in the market, the Government may consider amending the part of the existing Gas Safety Ordinance concerning the restriction on supplying LPG to users through underground pipes.

Moreover, when the Administration responds to the report of the CC, it should make recommendations on how gas mains can be made available for use by other fuel gas suppliers, and how interested enterprises will be encouraged to develop the energy source of natural gas, so as to provide another choice for consumers.

In the case of other competitors, they should actively promote their products and provide market information. Recently, the China Light and Power Company Limited has endeavoured to advertize the advantages of cooking with electricity and doing housework with electrical appliances. By the same token, LPG suppliers can also consider introducing more advanced technology to improve on the transportation of LPG for the convenience of users.

Regulation be conducted with caution

Only competition is the right direction

The DAB understands that some colleagues in this Council are concerned that the Gas Company may turn into a "monster" which monopolizes the market without being subject to any regulation. But we must not simplify the issue in this way and think that regulation by law will be a panacea to the problem.

Mr President, the DAB would like to emphasize that regulation should be conducted with caution since only competition is in the right direction.

Mr President, these are my remarks.

MR CHOY KAN-PUI (in Cantonese): Mr President, in Hong Kong nowadays, every family uses domestic gas fuels. Just as every family has at home and uses the telephone, domestic gas fuels have already become an indispensable part of our daily lives.

We are concerned about the use of domestic gas fuels as much as we care about the use of the telephone, because they directly affect the livelihood of our community. Besides, such services, especially in respect of their charges, have everything to do with the kind of competition they encounter in the market.

In order that the public can enjoy better domestic gas fuel services, and that the consumers can have more and better comparisons and options such that they can enjoy these services at lower prices, it is better to bring in more suppliers so as to create a healthy competition in the market. The result will be higher quality and lower prices, and the community at large will benefit.

It is of course merely an ideal situation to bring in new suppliers and encourage competition. Regulation on the operation of the suppliers concerned through legislation will, however, provide a more practical protection to the consumers.

I firmly believe that this "two-pronged" approach can satisfy people's needs. And I in fact hope that by the end of January next year, when the Government responds to the study conducted by the Consumer Council earlier on competition in the domestic gas fuel supply market, it will also announce the adoption of the "two-pronged" approach with a view to protecting the consumers.

Mr President, with these remarks, I support the amendment of Dr the Honourable LAW Cheung-kwok. 　

MRS SELINA CHOW(in Cantonese): Mr President, both the original motion and the amendment today are moved under the aegis of consumers' interests. I fully support the consumers' rights and interests, but I will oppose the original motion and the amendment.

The original motion urges the Government to study the report of the Consumer Council (CC) entitled Assessing Competition in the Domestic Water Heating and Cooking Fuel Market. This stand is worth supporting. However, I do not approve of the move to enact laws to regulate fuel supply.

I think only when a public utility organization undermines the public interests by using its own dominant position in the market or its monopoly position to reap huge profits, or when the service it provides is so inferior that it cannot meet the general public's expectation, then the Government should intervene or regulate.

In Hong Kong, where a free market is in operation, the best idea is to increase transparency by introducing competition, and let the consumers exercise their right to choose when there is monitoring instead of any regulation through legislation. This will work as an adjustment mechanism of the market.

Regulation through legislation should only be the last resort. The information provided by the CC has also indicated that many countries monitor enterprises that possess a sizeable market share, but they do not resort to regulate them right away.

Moreover, the current trend of the world is that efforts are made to reduce as far as possible unnecessary regulation. The United States actually began to remove step by step the regulation regarding the natural gas industry and opened up the gas fuel supply network in the 1970s. This has successfully brought down the prices solely through market competition. Hong Kong as a place that champions capitalism and free market economy should not therefore go against the trend.

Compared with the original motion, the amendment is even more unacceptable. This is because the premise of the amendment is to penalize a successful commercial organization. Should we adopt this amendment, it would amount to telling other commercial organizations not to carry their businesses further than the 50% mark of market share, otherwise they would be put on the spot by being politicized unaccountably and made to come under regulation. Even Professor Edward CHEN, Chairman of the CC, has also indicated to the Economic Services Panel of this Council that market share alone is not sufficient to determine whether there is a monopoly or not.

Meanwhile, Dr the Honourable LAW Cheung-kwok proposes to the Government that new suppliers should be introduced in view of the market share in question. But if new suppliers are unable to grab a share in the market, then is he going to ask the Government to restrict the original supplier on the provision of certain services?

Mr President, although the basis for today's debate is the report of the CC, the target is in fact the Hong Kong and China Gas Company (the Gas Company).

There are views that since the Gas Company has already monopolized the market in disguise, market mechanism alone can no longer effect self-regulation or self-adjustment. Such a comment is questionable.

I am not defending the Gas Company. But the reality is that the Gas Company has liquefied petroleum gas (LPG) and electricity as its competitors. A simple example is that in Wonderland Villas, there is no installation of the Gas Company pipelines. It is impossible for the unit owners to use the Gas Company even if they wish to. On the contrary, to gain a larger share of the consumer market in public housing estates, the electricity companies began a few years ago to install storage-type water heaters for the households at a low cost.

If we are to treat fair competition as equivalent to the right to choose, then are we making it a must to install an LPG storage tank underneath every housing estate, to have three-phase meters installed and also to have the Gas Company ready for people to choose? If we insist that absolutely every person must have his right to choose, then the result will only be that all the people will have to bear costs that are both high and unnecessary. Even when people are given more options, they may choose only one or two of them. So is it the best move to have the general public bear extra costs for choices they will not consider?

Although I do not approve of regulation by means of legislation, I still think it is worth the efforts to have a more in-depth study of the CC's report.

The report has proposed altogether five recommendations. The first and the second can be discussed together. What they involve could be some very fundamental changes. The common carrier system could mean the introduction of a few more coal gas companies, or the introduction of natural gas separately with regionalized networks for the supply of different kinds of gas fuels, or even an overall replacement of the coal gas by natural gas.

It is correct in principle that the roles of gas fuel suppliers and the distribution network should be separate. However, we have to be very careful when considering the introduction of natural gas. The overriding premise must be that consumers will be able to enjoy better service quality at reasonable charges. Perhaps we can experiment with the use of natural gas in some newly developed areas, and we shall only consider whether it should be extended for use territory-wide if it is found to be satisfactory in terms of prices, environmental protection as well as safety. The most important thing is to ensure that when natural gas is imported, its supply must be steady, and the environment and conditions should be conducive to competition before we completely replace the coal gas with natural gas.

There are words that the supplier of South China Sea natural gas has already signed a contract with a Hong Kong company for its sole distribution. If that is really the case and if we are unable to find other suppliers easily, then the result will be changing from what it is now to a monopoly by the natural gas supplier. I trust this is not something members of the public would like to see.

The third and the fourth recommendations respectively deal with the questions of regulation and the mandatory provision of choice. As I have just said, they may not necessarily benefit the public.

The last recommendation of the report is the setting up of an Energy Commission and an Energy Advisory Committee. Let me offer a counter-proposal, which is to merge these two organizations to form an Energy Committee. As an expert committee, it will gather views from the public on energy supply and applications and will conduct in-depth studies. In doing so, it will enable the Government to monitor the operation and service quality of various fuel suppliers on the one hand, and on the other hand make various recommendations to the Executive Council on energy policies, just like the way the Education Commission and the Transport Advisory Committee are functioning.

Mr President, I fully support the stand that any public utility that has a vital bearing on people's livelihood ought to be highly transparent and accountable to the public. Therefore, for the sake of the general public, there is a need for monitoring based on an in-depth understanding. However, monitoring is not the same thing as regulation.

MR SIN CHUNG-KAI (in Cantonese): Mr President, after the Consumer Council (CC) completed the Report on Accessing Competition in Domestic Water-Heating and Cooking Fuel Market in July this year, all sectors in society have been concerned about whether the Gas Company has monopolized the market. The Gas Company has repeatedly stated publicly that the CC's estimation of its market share is wrong. The Gas Company has reiterated that its market shares in the gas fuel market and the cooking and water-heating fuel market are 51% and 40% respectively, rather than 66.1% and between 40% and 51.4% as indicated by the CC. In addition, as regards the CC comment that the Gas Company has made an extra profit of $300 million in the past decade, the Gas Company refutes that it should have made $140 million more had the regulatory scheme based on the rate of return on assets of the China Light and Power Company been adopted for the calculation of its profit. I urge the Government to study and consider these contentions seriously and release all the information that the Gas Company has submitted to it to the public as well as give us a detailed explanation on this information in the responding report to be published in January next year.

No matter whether its market share in the gas fuel supply market is 51% or 66.1%, the Gas Company must admit that at the present stage, it has a better competitive edge over the other competitors in the gas fuel supply market and the cooking and water-heating fuel market. Under Section 17 of the Gas Safety (Gas Supply) Regulation, liquefied petroleum gas (LPG) pipelines cannot be laid under the roads and this regulation has given the Gas Company the advantage over piped LPG in the competition. Moreover, the Housing Authority has given priority to coal gas and this has thus further enhanced the monopoly position of the Gas Company. From this we can see that government policy is more favourable to the development of the Gas Company.

To put an end to the present "monopolistic superiority" of the Gas Company, there is no other way but to introduce new competitors into the market to compete directly with the Gas Company. But very obviously, new operators will encounter tremendous barriers when entering the market because to develop its market, a new operator has to lay a new gas supply network. But since the underground facilities in Hong Kong are already overcrowded, there are practical difficulties in doing so. If the CC's suggestion that the Gas Company should open its existing supply network and share it with natural gas in order to bring in new competition is adopted, the Democratic Party will show its support. However, with the present technology, Hong Kong is not yet ready to bring in natural gas. Therefore, it is too early to talk about the introduction of new competitors.

Since the Gas Company now enjoys an advantage over the other competitors and there are barriers preventing new operators from entering the market, the Democratic Party has every reason to believe that the company's market share will continue to expand in the years to come. In other words, the Gas Company will play a more and more important part in Hong Kong people's daily lives and it will become an organization of natural monopoly. To a public utility organization that is a monopoly and in such close relation with the people's livelihood, the Government has the responsibility to impose suitable regulation on it to safeguard the interests of the general public.

On the other hand, I want to point out something that the CC has overlooked in its report, and that is whether the customers prefer coal gas or piped LPG, it is very hard for them to switch to the other kind of gas fuel after the construction of a building is completed. In fact, the consumer has no right whatsoever to choose whether to use coal gas or LPG. In other words, at present, if the Gas Company or a LPG company wants to raise its charges to an unreasonable level, the customers will have no choice but to bow to such demand. To protect the people from being subject to higher than reasonable gas fuel charges, I urge the Government to regulate the Gas Company through legislation and also to consider imposing suitable regulation on the suppliers of LPG.

Once again I want to stress that a public utility organization that serves the public and has a close relation with the people's livelihood must shoulder the responsibility of taking care of the public's interests. It has to strike a balance between the public's interests and a reasonable profit when determining its charges. This means that its charges should be set at a reasonable level, acceptable to and affordable by the people. In fact, all public utility organizations in Hong Kong are under the Government's regulation in one form or another. The China Light and Power Company and the Hongkong Electric Company are regulated by a profit control scheme; Hongkong Telecom is subject to a "price capping", while the Hong Kong Ferries is subject to a subsidiary legislation by which any price increase has to be approved by the Legislative Council. I call upon the Government to implement the policy of regulation on all public utility organizations and enact laws to regulate the suppliers of domestic gas fuels, especially the Hong Kong and China Gas Company.

The CC suggests that the Government should regulate the Gas Company by "putting a cap on its charges", that is, setting its price increase at a rate equal to the inflation rate less a percentage that represents an increase in the organization's productivity. The advantage of this method is that it encourages the organization under regulation to increase its profit by cutting operating costs and raising operational efficiency. On the other hand, the consumers can enjoy a price level lower than inflation. There is also an advantage about regulation by a subsidiary legislation because it allows the Legislative Council to consider the price increase of an organization according to the organization's financial and operational situations in that year. I hope that after a careful study, the Government will choose a form of regulation most appropriate for the gas fuel suppliers so as to protect the consumers.

As I have just said, there are practical difficulties in the introduction of new suppliers into the market at the present stage and the technology is not yet ready now to allow Hong Kong to introduce natural gas into the market either. Moreover, I also agree with the Honourable LAU Chin-shek that we should urge the Government to actually regulate the Gas Company and to consider regulating the LPG suppliers as well. Because of the two points above, the Democratic Party cannot support Dr the Honourable LAW Cheung-kwok's amendment.

Mr President, with these remarks, I support Mr LAU Chin-shek's motion.

MISS MARGARET NG: Mr President, the question this Council has to consider is whether suppliers of domestic water-heating and cooking fuel in general, and the Hong Kong China Gas Company (the Gas Company) in particular, ought to be regulated.

Mr President, let us start from our basic philosophy: that of support for free enterprise, for fair competition, and against unnecessary restrictions. There should be no government or legislative intervention without justification. One such justification is when a monopoly is granted.

A monopoly is a restriction of the right and freedom of everyone else to do a certain thing, and is, for that reason, in principle abhorrent. Where there are overwhelming reasons of public interest for a monopoly to be granted, then regulation must be brought in to limit that monopoly and also to prevent its abuse.

Regulation is necessary where there is monopoly, because where there is monopoly, the citizen has no choice, or no real choice. You can choose to walk instead of taking a bus, but this is seldom practicable. Insofar as you have to take a bus, you have no choice as to the bus company.

Now, of course this cannot be argued on absolute terms. What one can say is that, the greater the real choice, the greater the ease with which the citizen can switch from one choice to another, the smaller the need, and therefore justification, for regulation.

Yet another consideration is, regulation is the restriction put upon a private enterprise for the benefit of the public. It follows that unless there is clear benefit, and unless this is the only way to secure such benefit, regulation should not be imposed.

Let us see, in the light of this basic philosophy ─ which I may say has the widest support in this community ─ whether a case has been made out for the regulation of domestic fuel suppliers. Mr President, I believe we are really just talking about the Gas Company, are we not, since this is the gist of the Consumer Council's Report.

It is not argued that coal gas is a monopoly. It clearly is not. What is argued, and highlighted by the Honourable LAU Chin-shek in his motion, is that the Gas Company already has a market share of over 50% in the domestic water-heating and cooking fuel market. I understand this to be disputed, but let us suppose it to be true. Is a particular market share at a particular time in itself a reason for regulation?

I cannot think it is. For were it so, then every successful player in a competition will be penalized with restrictions. Certainly this cannot be right. If an enterprise enjoys a sizeable market share as a result of favoured treatment, that is one thing. Restriction on it will arise from the favoured treatment. But if the same market share is a result of success in a fair competition, then surely that is another matter.

In other words, what, in fairness, and more to the point, in the interests of the public, we ought to ensure, is that competition is open and fair, not that all competitions achieve more or less the same degree of success.

The other argument for introducing regulation against the Gas Company is that the competition is now imperfect. Again, let us assume this is true. Without going into details, the correct general approach must be to explore the reasons for this imperfection of competition. Further, the preferred solution must be to encourage other competitors to improve, and so remove the restrictions they are now subjected to, because this would end up giving the public greater real choice.

Mr President, everyone in this community recognizes and appreciates the great job the Consumer Council has been doing in alerting us to possible areas where the consumer may be in need of protection. But we must not develop a blind faith in regulation. If we did, we would be constantly disappointed in what regulation can do for us. The periodic intervention of bureaucrats is a poor substitute for the constant challenge of competition in order to win the customer.

At the end of the day, consumers are interested in lower prices and better services. The pleasant face of the man who must woo is always more welcomed than the sour tones of someone complaining against undue bureaucratic intervention. Unless regulation can assure us of lower prices, better service and wider choices, there is no merit in introducing regulation. Indeed, it will be totally wrong to do so.

Mr President, I do not say that we should not ever seek to introduce regulation on the Gas Company or other suppliers of domestic fuel, only that the present data which I understand to be disputed, and arguments advanced are not sufficient to justify it. It may be that at a later day, further information will emerge and change the picture. This Council will, of course, look into the matter again at that point.

Mr President, with these words, I oppose both the motion and its amendment.

MR NGAI SHIU-KIT (in Cantonese): Mr President, Hong Kong is a Cosmopolis which adopts the laissez-faire policy. Entrepreneurs have to compete in the market and face consumers' freedom of choice. They also need to abide by the law of elimination in which only the best will survive. One responsibility of the Government and the legislators is to protect the mechanism of this kind of free competition, and minimize any intervention in the smooth running of the market with its competition while protecting the rights and interests of the general public. Mr President, to maintain Hong Kong's international status as a laissez-faire market, we must never try to undermine our very foundation of success by hastily introducing legislation to regulate a market that is running smoothly.

In fact, the arguments for introducing legislation to regulate the market for domestic water-heating and cooking fuels are not strong enough. First, there is no evidence to show that there are numerous consumers who complain about the service charge or gas safety of the Gas Company. What kind of interests was the Honourable LAU Chin-shek talking about when he said he wanted to protect the interests of consumers? Secondly, it is rather dangerous to judge whether an enterprise is monopolizing the market by the market share it has gained. One negative effect of so doing is that winners in market competition would be discouraged; so would entrepreneurship. In fact, to be successful an enterprise must provide quality service. However, the argument for today's motion on regulation through legislation places too much emphasis on regulation. This will only hinder the normal mechanism for competition among enterprises. What consumers would get is a decline in the quality of service. This contradicts the economic principles of laissez-faire capitalism. This is also at variance with the entrepreneurship of free competition which Hong Kong has long been advocating.

Mr President, in a laissez-faire market, competition between industries always exists. The Gas Company once considered using off-shore natural gas from the mainland as fuels. Now, the right to use this natural gas has gone to the local electric companies. Naturally, this has come about as a result of competition. Some market research reports pointed out that the privileged position of the Gas Company in the market is to a certain extent related to Hong Kong people's preference for "direct-fired cooking". Against this consumer habit, the local electric companies have indeed tried to compete for customers by promoting "fire-less cooking" in the market. The targeted promotion is yet another piece of evidence of market competition. How can we justify a fair argument for regulation through legislation if we only look at one or two figures without conducting an in-depth study of competitive behaviour among enterprises?

The late Nobel prize laureate in economics, Stigler, who is renowned for his study on the regulation of industry, had a famous comment in this respect: "What can regulators regulate?" Enacting a law will at the same time generate a problem. Are people not saying sarcastically that the profit control schemes are in fact "profit protection schemes" for public utilities? Mr President, I do think the interests of the consumers, who are the general public, should be protected, and effective competition introduced in the local fuels supply market. However, we must thoroughly understand and study the operation of the market. Obviously, the decision to make laws to regulate merely on the basis of a research report or a figure about market share is a rash one. This kind of regulation through legislation would easily destroy our effective free market competition in a capitalist economy on which we have been relying for our prosperity. If legislation to regulate was hastily proceeded with, I am afraid more adverse economic effects would result. We must be extremely careful!

Mr President, in view of the foregoing reasons, I oppose the original motion and the amendment.

MR CHIM PUI-CHUNG (in Cantonese): Mr President, last week we had a motion debate on the Bill of Rights. A number of speakers emphatically argued that if the Bill of Rights were to be amended, Hong Kong would be in jeopardy. Despite this, the reality is that the general public's response has been very sensible, showing that the people in Hong Kong clearly understand the facts. Today, the subject of our motion debate should prove extremely appealing to the consumers as they may get better protection. This is not a picture I will paint with my political predictions. I only want to advise the public once again that often debates are just debates. What sort of outcome will there be? The most important thing is that people must analyze the matter calmly.

Before expressing my views, I would like to issue a special warning to the Consumer Council. Undeniably, the Consumer Council has the support of some Hong Kong people who may identify with it. We must, however, understand that the Consumer Council is only doing empty talks. More often than not, it criticizes or interferes with certain trades without proof of practice. Personally, I think to do what it does is easy. If it were so smart, I would like to challenge it to do one or two feats just to show us it is smart enough to perform something ideal that it deems useful to the community. I am not criticizing them. I only want them to conduct fair assessments in respect of the practical aspects while they put forward theories. This would make what they say more practical. Therefore, I hope the Consumer Council would not put forward opinionated concepts after gaining support from the public on the theoretical front.

Mr President, just now a number of Members have mentioned that the Hong Kong and China Gas Company (the Gas Company) is not the only organization privileged to provide gas fuel supply, and that the Gas Company has no exclusive franchise either. I want to make this point: a rise in the profits of a company, in particular public utilities such as the electric companies and the Gas Company, may be attributable to these four factors:

price increase, of course;
increase in the number of customers;
a reduction in trading fuel price, that is, the procurement of cheaper fuels; and
improved management methods.

We must understand that some public utilities under government regulation have been earning lower profits. This is due to some undesirable management and other objective factors. So, we cannot, as some Members have suggested, impose regulation on these companies on the ground that their profits are too high. If a company that does well in all aspects is going to attract immediate regulation, we are in effect encouraging it not to perform well so that it may meet the criteria for a price increase.

If you would forgive me, I would say that I am not surprised if the Honourable LAU Chin-shek, who moved the motion, does not possess the wits to appreciate the rationale. The reason is that Mr LAU is a representative from the labour sector. However, for Dr the Honourable LAW Cheung-kwok, who has a doctoral degree, to put forward such kind of economic theory, we cannot help wondering why. We also have reservations in what he said. I am not arguing for the Gas Company. I just want to be fair. Would it not be very unfair to impose regulation and restriction on a company which is doing well?

Mr President, the Gas Company is a listed company. We very much hope that it can enhance its transparency. It has an obligation to do so not only for its consumers but also for the minor shareholders and investors from the community. I believe that if a company can maintain a high degree of transparency and manage to make a lot of profits under reasonable conditions and through legitimate means, it will gain support from its shareholders. It will also gain identification from its consumers. Of course, we are also hoping that the Government can in future introduce other products to stimulate competition.

A number of Members said a moment ago that it is comparatively difficult to bring in competition in housing estates. If the Government thinks a certain service has come to monopolize the market, it may lay down rules to provide other competitors with the opportunity to enter. If there is any mistake, I think it is on the part of the Housing Authority and not the Gas Company, for the Gas Company never requested the Housing Authority to adopt a discriminatory policy.

Mr President, while on this issue, I wish to take the opportunity to give once again a piece of advice to the business community in Hong Kong. This is already the second time I do this. At the moment, politics is serving economics. So, friends in the business community should be vigilant. They should take a more active part in politics, hold more discussions on political issues and care more about the community. In the past, the business community, when confronted with demands for monetary donations or voting support from the numerous political personalities, showed no interest at all in election matters or politics. Now, they have been forced to show their concern. The Chairman of the Democratic Party is saying that he would have more communication with the business community, but there will be communication provided that the business community is willing to obey (laughter). So, I must remind friends in the business community, once again, that they should be prepared to pay the price. They should care more about the community, have more participation in politics, and maintain a balance in the various frameworks in the community. Otherwise, only one voice will be given full play in the community. This is not beneficial to Hong Kong, and less so to the business community.

Mr President, I am not arguing for the Gas Company. With these remarks, I oppose the original motion and the amendment.

MR AMBROSE LAU (in Cantonese): Mr President, I think the Honourable LAU Chin-shek's motion and Dr the Honourable LAW Cheung-kwok's amendment involve several issues which this Council must consider and handle with care.

First, the relevant motion and amendment were moved with the Consumer Council's "Report on Assessing Competition in Domestic Water-heating And Cooking Fuel Market" (the Report) as the basis of their argument. In my opinion, a more appropriate way to handle the issue is to wait for the Government's study of and response to the Report, providing factual information in full detail or suggestions on how to tackle the issue. Only then can this Council play its role as a body that represents public opinion by fully analyzing the relevant points of argument and debating on the information and suggestions provided by the Government regarding the issue. We can then put forward our opinion on the basis of such analysis and debate.

The present state of affairs is that the Consumer Council and the Hong Kong and China Gas Company Limited (the Gas Company) each submitted its own report, with one saying there was monopoly while the other arguing there was no such situation; one advocating regulation through the introduction of legislation while the other maintaining that any forced regulation would only do harm to the interests of consumers and even the overall economy. Under such circumstances in which both the Consumer Council and the Gas Company argued for their own case, this Council should urge the Government to conduct its study, and provide detailed information and suggestions as soon as possible. This is because the Government, as an administrative body, is in a more neutral position than the Consumer Council and the Gas Company, and is capable of obtaining more comprehensive information. Only after the Government has provided a report on its study of and response to the relevant issue can this Council conduct a debate and put forward its views in a more objective manner.

I note that the Consumer Council's Report mentioned the Gas Company had a market share of more than 60% in the water-heating and cooking fuel market; whereas the Gas Company report claimed that coal-gas accounted for 40% of the various cooking and water-heating fuels used in Hong Kong household. On the other hand, Dr LAW Cheung-kwok's amendment suggested that the Gas Company already had a market share of over 50%. With such great variations in the data for the same market share rate, we have no means to determine which figure is more accurate. In this connection, we have also no way of telling whose argument was made on a more objective and factual basis. In such case, any opinion of this Council formed in the light of either the submission of the Consumer Council or that of the Gas Company would no doubt be extremely restricted. Such opinion is comparable to that obtained by a blind person who had never seen the sun trying to figure out the shape of the sun by knocking on a round plate and touching a candle, as described in the "Sun Parable" by SU Tung-po, a writer in the Song Dynasty.

Mr President, this Council should be extremely careful in its handling of the issue concerning the motion on the introduction of legislation to regulate the Gas Company. At the same time, it should carefully consider the possible chain effects of a debate of this nature. Regarding non-monopolistic commercial activities, Hong Kong has always been encouraging free competition and keeping intervention or regulation to the minimum. As the Gas Company is operating with no monopoly or guarantee for a rate of return, its regulation through legislation would involve a much wider issue, affecting not only the Gas Company but also the operations of numerous other commercial organizations. Imposing regulation on all of them would constitute a substantial change to Hong Kong's free economy and system. Undoubtedly, when business operations change from free competition to overall regulation, economic viability would be stifled. In this regard, the motion debate about introducing legislation to regulate the operation of the Gas Company has far-reaching effects. So, I would urge colleagues in this Council to await information and a detailed research report from the Government on the issue. Then this Council should put forward its prudent opinions after taking into account all relevant submissions from the Consumer Council, the Gas Company, the Government and the general public, as well as considering the possible effects the issue will have on our existing free economy. I think this approach is more appropriate.

Today, Mr LAU Chin-shek on my left moved a motion while Dr LAW Cheung-kwok on my right an amendment. Being unable to please both gentlemen, I can only choose not to support either.

Mr President, I so submit.

MR PAUL CHENG: Mr President, if I were to introduce a motion of thanks to the Hong Kong and China Gas Company, I am sure I would have support of this Council without any question. In order for the Gas Company to maintain its service, we must not forget that the company needs to make a reasonable amount of capital investment in order to keep up with technological development. Quality customer service also requires considerable funding. To put them under price control could very well jeopardize the excellent service we have all taken for granted all these years. I must also remind Members that Hong Kong's success has been built on free enterprise and minimum government intervention. I am very much against pinpointing a specific company in a motion debate such as this as a matter of principle.

With these words, Mr President, I oppose both the motion and its amendment.

MR FRED LI (in Cantonese): Mr President, whenever the Legislative Council had a debate on whether the Government should regulate privately-run public utilities, the organization in question or the Government would invariably object with this argument: "Hong Kong has always pursued a free-trade and non-intervention policy." Indeed, we have never opposed the principle of free competition. It is most ideal to let competitors compete and the market to adjust prices under a free and fair competitive environment. Under such circumstances, there is no need for the Government to intervene. I must, however, point out although there are a number of fuel supplies in the present fuel gas market, the competitive environment for these suppliers is not fair. And the Government has been a direct participant in the creation of this unfair environment. On the grounds of public safety, the Government prohibits the laying of liquefied petroleum gas (LPG) supply pipes under road surfaces. This greatly undermines the competitive power of piped LPG. Is it not a kind of intervention for the Government to insert this provision in the Gas Safety (Gas Supply) Regulations? If the Government can intervene in the market competition for fuel supply on the grounds of public safety, why cannot it by the same token regulate the Gas Company on the grounds of protecting public interests? Moreover, given the existence of unfair competition in the present fuel supply market, I personally think it is absolutely unjustified to use the free trade and non-intervention policy as the argument to raise objection to regulation.

In the past 10 years, the Gas Company has, by virtue of its competitive edge in the fuel gas market and the energy supply market at large, been able to steadily increase its market share rate. With the demolition of old buildings for re-development and the growth in public housing, it is likely that the Gas Company will still enjoy substantial development in its business in the coming years. So, I think the Consumer Council was really right in saying the Gas Company had become a public utility "with a monopolistic edge".

As the Gas Company is a public utility serving the public, its level of fees will have an impact on the livelihood of most people. Over the past 15 years, the average rate of price increase made by the Gas Company was only 4.8%, manifesting a high level of self-restraint. However, urging the Government to introduce legislation to regulate the Gas Company's charges is never meant to be a way to penalize the Gas Company. Government regulation of public utilities is just a means to prevent public utility companies from making unjustified price increases, thereby prejudicing the interests of residents. If the Gas Company is already exercising sufficient self-restraint, I do not think it should fear any regulation by the Government. All along, the Gas Company has claimed that its efficient operation and responsible attitude, coupled with its acceptable service, should warrant no regulation by the Government.

We can analyze and consider this point from two angles:

Whether a company should be regulated bears no absolute link to the performance of that company. The important point to consider is whether regulation is required. Government worldwide all set down certain regulatory measures regarding public utilities that extensively affect consumer interests in order to protect the interests of the public. We think the Government should plan ahead by acting early to set up mechanisms to regulate public utilities; otherwise when a public utility company acts in an irresponsible manner, it may not be able to take timely and effective actions as it takes time to formulate any regulatory devices.
Who decides whether the operation of a company is being conducted in a "responsible way"?

Public utility companies regulated by the Government are required to provide accurate and sufficient information to show they have been operating in the interests of the public. Such information includes their finance, operating costs investment in technological improvement and in the promotion of new developments and so on. But since the Gas Company is a public utility not regulated by the Government, the public has no access to more detailed information apart from those contained in its annual report to appraise its performance. As such, we find it difficult to ascertain whether the Gas Company is really operating in a responsible manner.

In fact, the introduction of legislation to regulate the Gas Company has positive implications on the entire fuel market and even on the Gas Company itself. As the market share rate of the Gas Company continues to rise, and profits surge, we can hardly imagine the Gas Company would open up its gas distribution network in the future for use by new operators, thereby enhancing competition in the market. However, when the Gas Company comes under regulation, it would consider opening up its distribution network to free itself from regulation as quickly as possible. When the network is opened to new competitors, the price of fuel gas will drastically drop, and consumers can then be benefited. In other words, price control measures will benefit both the energy market and consumers.

Lastly, I would like to emphasize one point. If a business organization occupies a monopolizing position in the market and assumes a dominating position, it is likely that it would abuse its monopolistic advantage by setting up market barriers or laying down unjustified sales terms. Thus, the interests of consumers will be prejudiced. To maintain fair and healthy competition and to protect consumers, I think, in addition to introducing legislation to regulate business organizations with a "monopolizing edge", the Government needs to formulate fair trading laws, and set up a fair trading commission to ensure implementation of the relevant Laws, with a view to rectifying some unfair practices or competition that exist in the market. For these reasons, I would urge the Government to take action as soon as possible to formulate fair trading policies, to lay down through legislation a set of public standards regarding fair competition for competitors to follow, and to set up a fair trading commission vested with the power to investigate and rectify any unjustified or unfair competition practices in order to protect the interests of consumers.

Mr President, with these remarks, I support the Honourable LAU Chin-shek's motion.

MRS MIRIAM LAU (in Cantonese): Mr President, the motion of the Honourable LAU Chin-shek is "to urge the Government to promptly study and respond to the Consumer Council's Report on Assessing Competition in Domestic Water-heating and Cooking Fuel Market, and introduce legislation to regulate domestic fuel suppliers in regard to their fuel supply and charges". It is obvious that the Government has not yet finished the report. Then how can we conclude at the present moment that regulation through legislation is necessary? The motion of Mr LAU has given me the kind of impression that he is asking the judge in court to make a judgement after listening only to the evidence of the prosecution without thoroughly studying the case and listening to the submission of the defendant. This is really putting the cart before the horse and is hardly fair.

The amendment of Dr the Honourable LAW Cheung-kwok seems to disregard whatever study necessary but only accepts the conclusion drawn by the Consumer Council. The amendment of Mr LAW even inserts these words: "in view of the fact that Hong Kong and China Gas Company Limited already has a market share of over 50% in the domestic water-heating and cooking fuel market". Where does this figure of 50% come from? After reading through the report, I found that this was only mentioned at one point. It was an estimation by the China Light and Power Company that the Gas Company had a share of 51.4% in the market. But the Gas Company itself estimated that it only had a market share of 40%. Then whose figure was accurate? A conclusion has not been arrived at yet.

According to the Consumer Council's Report, the Gas Company has already developed into a "public utility with monopolistic rent". It is also the only public utility not yet subject to regulation by the Government. Therefore, the Gas Company should be put under government regulation.

From the angle of the consumers, whether the Gas Company is to be regulated is not that important. The important thing is whether the service and performance of the Gas Company is satisfactory. And what is even more important is whether the rate of its price increase is acceptable.

The Consumer Council's conclusion that the Gas Company enjoying "monopolistic rent" is detrimental to consumer interests is based on certain grounds. The Consumer Council pointed out that in the past 10 years, the rate of increase of gas prices is much higher than that of electricity charges. The rates of increase of electricity charges are rather low at the present moment. This is because between the end of the 1970s and the early 1980s, the two power companies had greatly increased their investments and hence their charges. And with the change from oil-fired power to coal-fired power, the two power companies have been able to lower their price increases in recent years. On the contrary, the Gas Company has needed to make substantial capital investments in the past decade in order to meet market demand. If we extend the computation period by five years, that is, starting from the 1980s onwards, the consumers can easily discover that the average rates of price increases of the Gas Company and the two regulated power companies are in fact very similar, and they are actually far lower than those of the franchised public transport operators.

So what is the significance of putting the Gas Company under government regulation? How will the consumers benefit from it? Although the Gas Company is not subject to any regulation now, the general public seem to be satisfied with its services. In regard to its charges, the average rate of increase of gas prices over the past has been half of the Consumer Price Index, that is, 4%. Is that rate of increase unreasonable and unacceptable to the public?

Furthermore, the Consumer Council thinks that the Gas Company is earning a "supernormal" profit because of its monopolistic rent. But should these profits be attributed to monopoly of market or the strong sense of invention and innovation, active investment and efficient production of that company? Are we only to listen to the one-sided comments of the Consumer Council without making any objective analysis or study of our own? When the legislators rashly draw a conclusion without first making any thorough study or analysis of the fact, and stretch out a visible hand to restrict a company which has achieved rather good returns and performance, what message would this convey to the investors? If a company is penalized because it is bold in investment and efficient in operation and thus gets better returns, then who will dare to invest, to innovate and to invent?

Besides, while the Western countries are gradually moving towards privatization and deregulation of public utilities, I do not understand why Hong Kong has to go in the opposite direction.

Although I am against unscrupulous regulation, that does not mean that the Government can stay aloof from all this. As a matter of fact, the Government has the responsibility of protecting the consumers and monitoring the operations and service levels of all public utilities. The Consumer Council recommends the establishment of an Energy Commission by the Government. I believe that this Commission can have a definite role to play in regard to monitoring public utilities. The Government should actively study that recommendation.

In fact, what is to the best interests of consumers is to open the market and encourage competition. According to the experience of the United States, after deregulation and introduction of competition, the prices of gas fuels dropped drastically. This shows that introduction of competition is in fact a better protection for the consumers' interests than any form of regulation. In that regard, the Government should encourage the operators concerned to introduce natural gas into Hong Kong without delay so as to join the competition in gas fuels.

In my view, the lopsided approach of simply interfering with and regulating everything without looking at the causes of events is not enough to protect the consumers' interests. I think that keeping the market open and smooth, as well as introducing proper competition under reasonable circumstances to allow prices to be determined by market forces is most beneficial to economic development and to consumers. The most important thing is that we must do our best to maintain a free economic system in Hong Kong. To convey a wrong message to investors will only hamper the economic development of Hong Kong.

Mr President, I am against Mr LAU Chin-shek's motion and Dr LAW Cheung-kwok's amendment.

DR SAMUEL WONG (in Cantonese): Mr President, recently there have been some arguments in favour of regulation of domestic fuel suppliers, in particular the Hong Kong and China Gas Company Limited (the Gas Company). Members seem to be acting with undue haste as the debate is called before the Panel on Economic Services of the Legislative Council has any opportunity to listen to the arguments from the Consumer Council and the Gas Company respectively. It appears that some of the Members have already been convinced that regulation is all beneficial and of no harm, thus regulation through legislation can go ahead without the need to clarify the facts.

Such view can be proved wrong when judged from several perspectives. Normally, regulation will only increase operational costs and interfere with the operation of the economy. And at the end, the consumers will suffer. In my opinion, unless there is evidence that the suppliers are overcharging, or that the consumers are not provided with up-to-standard services due to the suppliers' near monopolistic power, the Administration should refrain from imposing regulation.

The global trend is that various governments are now deregulating different trades and industries and opening up their markets to further protect consumer rights and interests. The consumers have come to realize the price to pay for regulation and are making an effort to solve this problem. To the Legislative Council, the crux lies in the finding out of whether Hong Kong consumers' interests are being jeopardized due to the monopolistic power of the domestic fuel suppliers, in particular the Gas Company, as claimed by the Consumer Council, to the extent that only by means of regulation can the consumers be protected.

In short, the questions awaiting answers include:

-Is the Gas Company a monopoly? If so, then:

-Is the Gas Company making use of this privileged position to overcharge the users? In the course of the debate, Members seem to find the service standard of the Gas Company unquestionable.

According to the Consumer Council, because of various legislative and technical restrictions, the market share of the Gas Company is on the increase. However, the Gas Company argues that its expanding market share is attributable to the best competitive prices and the most excellent services it offers to the households. Which of these two arguments true and which is false?

According to the Consumer Council, the Gas Company is a monopolistic supplier. But the Gas Company argues that even after 130 years' business operation and hard competition, it can only gain a share of 40% in the domestic cooking and water-heating fuel market.

The Consumer Council also says that the rate of increase in towngas prices is higher than those of the other public utilities. But according to the Gas Company, over the past 10 years, the rate of increase in towngas prices has only been equivalent to 50% of the inflation rate, and has been one of the lowest rate of increase among the public utilities in Hong Kong.

The most important point of argument is that while the Consumer Council says that the Gas Company's rate of return on assets is higher than other large-scale public utility companies in Hong Kong which are subject to regulation, the Gas Company claims its rate of return on assets is similar to those of the other large-scale public utility companies. This point is very important because if the claim of the Gas Company is true, the saying that the Company has overcharged at the expense of consumer interests will be easily scotched.

The above points are still being disputed. The Government is now conducting a study in the hope that the true picture can be obtained from an objective angle. We understand the Economic Services Branch has set up a working group consisting of professionals responsible for assessing the various economic, financial and technical problems of the domestic fuel market as well as the suppliers in that market. I think that this working group is more qualified than the Consumer Council in studying the problems related to the fuel market. Besides, the Economic Services Branch has already undertaken to complete this study by the end of January 1996. We should wait for the publication of the study findings before coming to a conclusion.

At this moment, I would like to share with Members my three professional viewpoints in regard to the domestic fuel supply market:

Firstly, it is the question of monopoly. I have heard people saying that coal gas is an indispensable fuel in Chinese cooking and thus cannot be replaced by any other type of fuel. However, if we go into department stores, household electrical appliances shops or even supermarkets, we can easily find various kinds of electrical cooking appliances, including rice-cookers, microwave ovens, crock pots, ovens, cooking stoves, kettles and hot water flasks which all run on electricity. The great number of people engaged in this trade proves that the size of this market is indeed not negligible. The case is the same with electric water heaters. The key to competition nowadays is not whether the right of gas supply to households can be secured, but whether the households can be persuaded to choose a certain kind of fuel on such considerations as safety, convenience and cost.

Secondly, as an electronic and mechanical engineering consultant, I fully understand the fierce competition among gas fuel suppliers for the right to supply bathroom water heating fuels. Before a building development commences, they are already competing among themselves in such aspects as product creativity, ease of installation and transmission costs. This kind of competition is likely to continue in future.

Thirdly, as a professional engineer, I have personally witnessed the development of the domestic fuel supply industry in the past 20 years. Enjoying no monopoly or financial returns guarantee from the Government, the Gas Company still made substantial investments to expand the productivity and accessibility of coal gas in order to cope with future developments. As a result, it has set up a coal gas supply network which is both safe and reliable, providing another alternative in domestic fuel. Had the Gas Company not been bold in its investment strategy, liquefied petroleum gas (LPG) bottles in Hong Kong may have been increased by a million, while there may be an addition of more than a hundred LPG trucks on our roads. In that aspect, I think the Gas Company has made great contributions to our domestic needs and traffic condition.

Earlier on, I have commented on the drawbacks of regulation. The highly-regarded positive non-intervention policy adopted by the Hong Kong Government has become the cornerstone of Hong Kong's economic achievements. With the global trend moving towards deregulation, unless we have concrete evidence to show that consumer interests are jeopardized, it is both unnecessary and unreasonable for Hong Kong to go against this trend.

MR LEE CHEUK-YAN (in Cantonese): Mr President, quite a number of Members have just spoken in opposition to the Honourable LAU Chin-shek's motion. The reasons given were mainly the existence of free competition in the present market and the absence of a monopolistic situation, or that all problems could be solved simply by introducing competition. I would like to make a response on these aspects.

Firstly, how do we introduce competition? A Member mentioned a moment ago about the introduction of natural gas. However, the undeniable fact is that I have not heard of any local company planning to introduce natural gas into Hong Kong lately. Of course, I will welcome any company making such a move which is also one of the recommendations in the Consumer Council's Report. But the prospect of such move is far too remote at the present stage. What we are now discussing is whether the Gas Company is facing free competition in the fuel gas market. We should not use something so remote to help us make the decision that no regulation is required at the present moment and to say that there is now free competition in the market.

Another argument is that for fuels gas, we have not only coal gas but also liquefied petroleum gas (LPG). But please note that there are only two ways of storing LPG. One way is by using central storage drums, but I believe that most residents will object to this method because the drums will take up space and the residents are also sceptical of their safety. The second way is by using LPG cylinders. However, take the Home Ownership Scheme Estate I am living in for example, even I have no idea on how to order a cylinder of LPG. Besides, LPG in cylinder will also take up space in the flat. I believe that as a consumer, anyone will not want to keep a bottle of LPG in his kitchen, let alone giving up coal gas for it. I would like to make an analogy. Have you ever thought of using a power generator instead of the electricity supplied by the power company? The competition between LPG in cylinders and coal gas is just like the competition between the power generator and the China Light and Power Company. Is that feasible? Everyone knows that it is not. There is no comparison between the two. Free competition between bottled LPG and coal gas is indeed a fantasy that cannot exist.

A third argument is that electricity can compete with coal gas. I think that this may as well be true in regard to water heaters. But as far as cooking is concerned, although Dr the Honourable Samuel WONG mentioned a moment ago that there were various kinds of electrical cooking appliance nowadays, you would probably agree with me that in Hong Kong, microwave ovens, thermal cooking pots and any other kinds of electrical appliances cannot replace a cooker using visible flame. I believe that not one Chinese family in Hong Kong can totally depend on electricity for cooking purpose. Thus, the saying that fair competition exists between electricity and coal gas just cannot stand. We can only say that electricity can lessen our dependence on coal gas. But in regard to cooking fuel, we still need to use visible flame to make our food. For a Chinese family, I believe the choice is only between coal gas and LPG, with no other alternative.

Members oppose the motion of Mr LAU Chin-shek on the grounds that there is free competition. But I hope that Members can reconsider whether there is genuinely fair and free competition. I feel that such competition is not possible. If Members also think that there cannot be any genuinely fair and free competition, then regulation through legislation should be considered.

Thank you, Mr President.

MR CHEUNG HON-CHUNG (in Cantonese): Mr President, there are at present government regulation on matters like the quality of service and charges of many public utilities, including the ferry companies, the China Light and Power Company, the China Motor Bus Company (CMB) and the Kowloon Motor Bus Company. Regulation of commercial enterprises has its merits and demerits. Many companies will reinvest the profits they make to expand their equity capital and hence further increase their returns. So they are getting double benefits and this situation, however, has not been regulated. I think it is most regrettable that the Kowloon-Canton Railway Corporation and the Mass Transit Railway Corporation are not subject to any regulation. In a highly commercialized society like Hong Kong, protecting the interests of large investments can hardly be criticized, but is it fair to the other companies that those companies which are partly owned by the Government are not subject to regulation?

Before any decision on the regulation of public utility companies can be reached, we should first look at their rights and obligations. The rights of these companies include the granting of franchise and a guaranteed profit. These are used by many companies to keep on enlarging their profits. For instance, the profit from the development of CMB's depot is not accounted for by the company as permitted return. That obviously is very unfair and in such case, CMB has not fulfilled its obligations. If the relationship between rights and obligations is not understood, government regulation will be meaningless.

It is unfair to allege arbitrarily that the Hong Kong and China Gas Company (the Gas Company) has monopolized the domestic water-heating and cooking fuel market. It is necessary to wait for the Government's response in a report before any decision can be made as to whether regulation should be imposed. That is the wise thing to do, or else we would be acting too rashly.

The original motion "urges the Government to promptly study and respond to the Consumer Council's Report on Assessing Competition in Domestic Water-heating and Cooking Fuel Market". I agree to that. We should conduct a detailed study and discuss the content of that report before drawing any conclusion. It is indeed unfair to the Gas Company if a decision to legislate to regulate the company is made now.

It has been pointed out in Dr the Honourable LAW Cheung-kwok's amendment that the Gas Company has taken up more than 50% of the domestic water-heating and cooking fuel market. That really is inaccurate. The Gas Company has clarified this point and asserted that its market share is 40%, with the rest being taken up by electricity and liquefied petroleum gas. Besides, can a market share of 50% be judged as monopolization? Consider for instance the airlines, supermarkets and big chain stores which may have taken up more than 50% of the market share. Can it be said that they have monopolized the market and should therefore be regulated? I think there is a need for clarification. The success of Hong Kong has all along been based on an active non-interventionist policy.

Finally, I would like to reiterate that as far as general principles are concerned, I would lend my support to the regulation of public utility companies. However, as regards the details, there are still loopholes in the legislation that should stopped. These include the possibility of boosting capital investments to increase returns and hence indirectly raising the level of guaranteed profit, as well as the sale of land. Also, it is unfair to the society that the two railway companies are not subject to any regulation. Lastly, I think this Council should only make a final decision after the Government has responded to the Report published by the Consumer Council.

These are my remarks.

MR TSANG KIN-SHING (in Cantonese): Mr President, the Governor's policy address this year clearly stated that the Hong Kong Government has a "commitment to open markets and fair competition. "Is this an administration policy, which approximates a golden rule, universally applicable? However, as far as regulation of the Hong Kong and China Gas Company (the Gas Company) is concerned, the so-called principle of "open markets" and "fair competition" is really selective. It is merely a disguised way to deceive people.

At present, the share of the Gas Company in the market of domestic water-heating and cooking fuels is 51%, which is greater than the 37% occupied by liquefied petroleum gas (LPG) in cylinders and the 12% occupied by piped LPG. According to statistics in 1994, around 1 200 000 residential units were supplied with coal gas. The figure represented nearly half of Hong Kong's residential units.

What is worrying is that the Gas Company has under its control nearly half of the gas fuel market and its share in the energy supply market will continue to grow. Its dominant position in the market will also continue to grow. Experience in the past ten years or so shows that the market shares of LPG in cylinders and piped LPG have consistently dropped. The market share of LPG in cylinders had dropped from 49.5% in 1981 to 27% in 1993; while that of piped LPG had declined from 9.3% in 1981 to 7% in 1993. Looking into the future, the growth of the market for coal gas will continue with the demolition of old buildings for redevelopment. Both the Gas Company and the Government can expect an even higher rate of consumption for coal gas and will be delighted when that happens.

Mr President, as "smart" consumers, are we in a position to choose freely? The answer is negative. It is very unlikely that we can do so, unless we will move out or emigrate and not dwell in public housing or Home Ownership Scheme units; choose not to cook with direct fire; or are willing to sweat and exercise our muscles through carrying LPG cylinders. Otherwise, there is no way we can switch to other substitutes even when the Gas Company frantically increases its charges one day, in the absence of a regulatory system.

"Prevention" is always better than "cure". In view of the even-expanding market share of the Gas Company, unchallenged by any competitors, regulation is the only way to protect the consumers. Unfortunately, the Gas Company has always been free from regulation of any kind. The Government has never introduced legislation to regulate it, the consumers have not been able to regulate it, and the Consumer Council has no right to effectively regulate it.

In response to the report published by the Consumer Council, the Gas Company pointed out on paper that the present price level of coal gas is competitive, and its level of price increase is only half of inflation, being one of the lowest among public utility companies. The Gas Company said its rate of return is comparable to those of the enterprises of the same category, and its dividend yield is the lowest compared with the other public utility companies. Why should it be afraid of regulation if the Gas Company is one which has always valued its competitiveness, its excellent productivity, its effective marketing strategy, its high level of customer service, its practice of not making unjustified profits and its emphasis on investments? To say regulation would result in increased operating costs and higher risks faced by shareholders, thereby driving investors away and prices up, is over-reacting and an under-estimation of its own capabilities. Have those regulated public utility companies, such as the three railway companies, the three bus companies, the two electric companies and Hongkong Telecom, not been able to make profits and reasonable price adjustments amounts after being regulated? Have the share prices of those listed public utility companies experienced fluctuations because of regulation?

From the position of the Gas Company, it is of course better to have "no regulation" than "regulation". However, regulation is not meant to penalize the successful investors. Rather, it is there to more effectively balance the interests of consumers. As the saying goes: "If all your life you have had a clear conscience, you need not fear a knock at the door at midnight."

Mr President, legislation is needed to regulate gas fuel suppliers effectively. I think the Government can generally refer to the kind of regulation imposed on the two electric companies. It can sign "scheme of control" agreements with all gas fuel suppliers to require the relevant companies to submit to the Government for approval development plans for the next five or ten years. And the Government may actually monitor the procurement of fuels, network development plans, financial plans and service quality of such companies so as to fully protect the interests of consumers.

As regards profits and charges, I am against the adoption of any "profit control models" similar to those currently applied to the two electric companies. This is because profit controls would turn out to be "profit guarantees" and they may provide a chance for the investors to obtain high profits through increasing their assets. I propose that the Government should introduce legislation to regulate gas fuel suppliers. At the same time, it should consider controlling the prices or, perhaps like the ferry companies, every price increase application would be treated separately. A price increase should require the approval of the Executive Council and should be submitted to the Legislative Council in the form of subsidiary legislation.

With these remarks, I support the Honourable LAU Chin-shek's motion.

MR CHENG YIU-TONG (in Cantonese): Mr President, nowadays do most Hong Kong people have to "worry over firewood and food"? I can tell you, Mr President, that they do not have to "worry over firewood" as firewood is no longer used as a fuel in Hong Kong. But they have to "worry over food" because presently there are at least 110 000 unemployed workers and 70 000 underemployed workers in Hong Kong. Whereas it is good to see that people need not "worry over firewood", it is all the more disturbing to see that they have to "worry over coal and food". By "coal", it does not mean the "coal" some unlucky person got hauled over, but the "coal" of "coal gas", which means the fuel costs of lighting and cooking.

Just as the advertisement of the Hong Kong and China Gas Company Limited (the Gas Company) says "Towngas for every home", according to the study report of the Consumer Council (CC), the Gas Company's position in the piped domestic fuel gas market has come to a monopolistic situation of all households using piped fuel gas, over 80% use the coal gas; in the private property sector, the percentage is up to nearly 90%. The Gas Company is already monopolizing the market and, with more new housing estates replacing old ones, the dominant position of the company will certainly stronger by the day. With unfair competition in the market and the absence of government price control over the Gas Company, leaving its price adjustment free from scrutiny and approval, the level of charges has gone so high as a result that the cost of living of the people was directly pushed up.

Chinese people are used to cooking with visible flame. Thus, electricity is not an adequate replacement for fuel gas. By law, the storage of LPG is under strict regulation. These all contribute to the favourable position of the Gas Company. Moreover, technical problems involved in opening up the gas supply network and in switching to natural gas make it difficult to realize these options in the near future. Hence, the Gas Company is virtually dominating the market and has secured a monopolistic position. Would it be unreasonable for the Gas Company as a public utility that monopolizes the market to be regulated by the Government? Is the situation unreasonable for the Gas Company or is it unreasonable for members of the public? It would be wishful thinking to rely solely on the self-restraint of businessmen to guarantee that the charges and price adjustments will be made in the interests of the public. The electricity companies which are competitors of the Gas Company are subject to government regulation. So what makes the Gas Company so exceptional that it can be exempted from regulation? This really cannot stand to reason.

While the Gas Company has been stressing that the rate of its price increases was below that of inflation, it has concealed the fact that the range of increases far exceeded that of the increases in costs. Over the past 10 years, the charge for the Gas Company has increased by 42%, whereas the operating costs during the same period have increased by just 13%.

On the major premise of safeguarding the interests of the public, it is imperative for the Government to regulate enterprises of a monopolistic nature. The focus of regulation for the Gas Company proposed by the CC is on the setting of price ceilings and not the restriction of its profit margin. It shows that the CC does not intend to undermine the principle of free competition by putting a restriction on the Gas Company's profit margin. With the Gas Company's present market share and the sound foundation it has established, even if it is to be regulated, there is no doubt that it can still maintain an enviable profit margin. Since the business of the Gas Company is going well, why should it fear government regulation?

For the above-mentioned reasons, the three Members from the Hong Kong Federation of Trade Unions will support the motion put forth by the Honourable LAU Chin-shek to "regulate the Gas Company". As to the amendment motion put forth by Dr the Honourable LAW Cheung-kwok, whilst we have reservations on some of the wordings, we are of the view that "having a market share of over 50%" is not a yardstick for judging whether there is a monopolistic situation. However, having considered that it contained the concept of regulating the Gas Company, we shall therefore support the amendment motion of Dr LAW Cheung-kwok at the same time.

Mr President, these are my remarks.

MR LEE WING-TAT (in Cantonese): Mr President, I would like to highlight only a few points as my response.

Today, quite a number of colleagues have talked about free competition in the market of fuel supply. In fact, during the last Session of this Council, the Panel on Economic Services had held one or two discussions concerning the Hong Kong and China Gas Company (the Gas Company). I remember that many colleagues tended to accept the current market share of the Gas Company. However, whether the market share of the Gas Company is 40% as stated by the Gas Company itself of 50% to 60% as described by Dr the Honourable LAW Cheung-kwok, it is on the rise and a monopoly has begun to emerge. This is a natural monopoly. Many colleagues have talked about free competition. But let us think about it. This idea is as absurd as building another electricity company in Hong Kong Island to compete with the Hongkong Electric Company and building another electricity company in the Kowloon Peninsula to compete with the China Light and Power Company.

On the other hand, I hope Members will note that in 1992, the Housing Authority (HA) actually considered the feasibility of allowing the competition of liquefied petroleum gas (LPG) in the redeveloped area of Tin Wan Estate because many LPG companies had criticized the HA for not allowing them to enter the market to compete. After a feasibility study, the HA camp up with a conclusion which was very simple: it was not viable. The reasons are as follows. First, land would be occupied if central LPG equipment were to be installed near the public housing estate and land is a precious resource in Hong Kong; secondly, the problem of risk put the installation of such equipment under certain restrictions; and thirdly, the residents did not accept this kind of installation. According to my understanding, therefore, the HA had basically given up this idea. In other words, in the future, residents living in newly built public housing estates will have to accept towngas unless they use LPG in cylinders. Given this development trend, it can be foreseen that the residential housing market share of coal gas will increase rapidly rather than decrease. I hope my colleagues, in considering this issue, will not be too theoretical and talk about free competition.

In addition, due to an incident of LPG explosion on Tsing Yi Island several years ago and other safety problems, residents in private housing estates are quite resistant to the installation of LPG storage depot in their estates. I expect that more and more residents will urge for the removal of LPG storage depot in their estates. If so, that will certainly help boost the market share of the Gas Company.

I have just heard the opinions of some colleagues. For instance, the Honourable CHAN Kam-lam from the Democratic Alliance for the Betterment of Hong Kong asked whether restriction to competition could be relaxed. We had discussed this idea but found that it was not quite feasible. For instance, we discussed whether legislation prohibiting for LPG along or across roads could be amended so that pipelines for LPG could be installed along or across main roads. But as everybody knows, LPG is heavier than air. In case a leakage occurs, LPG we sink and accumulate and thus will entail greater danger. Although one LPG company had tried to dilute LPG in order to alleviate the risk of explosion, it was not successful yet. So, unless this problem can be solved, the recommendation of lifting the ban on the laying of pipelines for LPG along or across roads will not be feasible. I believe the Gas Standards Office will not approve of this recommendation either unless the safety problem is solved.

Some colleagues have also suggested that a common distribution network will solve the problem. But this method may not be feasible. After conducting a study, the China Light and Power Company said that the generation of electricity by means of natural gas obtained from the South China Sea would not be possible until after the year 2000. And this technology can be applied in residential gas fuel supply only after it has gone through development for a period of time. So, we might have to wait for 15 or 20 years. Are we prepared to wait for so many years before we study whether this concept is practicable? I think this cannot be a solution for the current problem.

Some Members mentioned the possibility of helping new competitors to enter the market. I think the Government will not support this idea because this will go against the Government's practice.

Just now some Members have also mentioned whether a decision should be made only after the Government has made its response. Sorry, Mr Gordon SIU, I am a pessimistic person. I think the Government 's conclusion would be probably that competition still exists. I remember back in 1992-93, when debates concerning the capacity of our container terminals were held, the market share of Hong Kong International Terminals was 53% and the market share of Modern Terminal was 30%. The then Secretary for Economic services, the Honourable Mrs Anson CHAN, still said that there was competition and there was no problem in pricing. I have heard many of such examples. Even though the market share of the Gas Company is now more than 40%, the Government still insists that there is competition in pricing and regulatory control is unnecessary. So I can put forth the Government's conclusion on the behalf of Mr SIU because the same conclusion will come up in a month or so.

As the problem has surfaced now, why not face up to it but wait for the Government's conclusion? The Democratic Party, after an in-depth consideration, is of the opinion that this problem will not be solved if we still indulge in the so-called natural concept of free competition. We therefore support the Honourable LAU Chin-shek's motion.

Thank you, Mr President.

MR JAMES TIEN (in Cantonese): Mr President, in many countries, large-scale investments such as public utilities are operated by the government. The public utilities in Hong Kong are, however, operated by private companies. Since investment in such business involves huge sums of money and returns are spread over a long period, not many companies are interested in making this kind of investment. For Hong Kong to be similarly provided with this kind of public utility services, the problems involved are whether: there is market competition, the charge increase is justifiable, the rate of return is reasonable and more investment will be put in each year. Let us consider the situation of the Hong Kong and China Gas Company (the Gas Company) in the light of these four points. Is there competition in the market? Members have already expressed a lot of opinions on this point. In the domestic water-heating and cooking fuel supply industry, the Gas Company is taking up 40% of the market, the electricity companies 30% and Liquefied Petroleum Gas 30%. That means the Gas Company has not monopolized the market. Although there is no monopoly, but if its market share increases in the future, it will be in a better position to raise charges. However, will it help the situation if another gas company is set up to compete with it? We can look at similar cases in other trades, such as the container terminals. Earlier on, the Honourable LEE Wing-tat mentioned there were two or three companies in the business, virtually constituting a monopoly. Another example can be seen in the supermarket business. The two large supermarket chains in Hong Kong can also mutually adopt a uniform price policy. Therefore, the argument of market competition really cannot stand. Even if a new gas company is set up to reduce the market share of the existing Gas Company, prices will not necessarily drop. This is the first point.

Secondly let us look back at the rates of increase in the charges of the Gas Company over the past 10 years. The charge was increased from 11 cents per megajoule in 1985, to the present 15 cents per megajoule. The average annual rate of charge increase was 4%, which was half the inflation rate over these 10 years. This shows that the rate of charge increase of the company has been absolutely reasonable. Certainly, Members may well say that the profit of more than $1 billion per year made by the Gas Company is excessive. Such profit margin was brought about by an increase in productivity. If Members think that such a profit margin is still excessive and that any extra profit made as a result of enhanced productivity should be returned to consumers, it is a point of view taken from a totally different angle. In fact, the assets of the Gas Company have increased from $1.2 billion in 1985 to $5.6 billion this year. In these 10 years, the Company has invested in many new projects in Hong Kong and naturally it will get a higher rate of return, bringing in a profit of more than $1 billion.

Dr the Honourable LAW Cheung-kwok mentioned that the internal rate of return of the Gas Company at 15 points is too high. Compared with other public utility companies in Hong Kong, that rate is not high at all. However, Dr LAW said that the rate of return of some companies in the United States was only about 4%. I am not familiar with the situation over there, but since Dr LAW could quote that figure, he must have done some research on it. If that is the case, why do these companies not come swarming into Hong Kong to open up the market here? They can come here to invest at any time and the Hong Kong Government has not prohibited them from so doing. However, with all factors calculated, they have decided not to put their investment here. This is ample indication that there must be some other factors behind their decision to earn a 4% return in the United States rather than reap a return rate of 15% from operating a gas company in Southeast Asia or in Hong Kong. They must have their own economic considerations.

The Honourable Henry TANG mentioned that we would discuss the matter at a meeting of the Economic Services Panel because the Government had not submitted its report and the Honourable LAU Chin-shek had proposed this debate simply on the basis of the study made by the Consumer Council. I concur with the view of Mr TANG. I hope we will draw a conclusion only after the Government has made its report to the Economic Services Panel and after Members have discussed the matter.

Mr President, with these remarks, I oppose the motion.

MR IP KWOK-HIM (in Cantonese): Mr President, in opposing the Honourable LAU Chin-shek's motion and Dr the Honourable LAW Cheung-kwok's amendment, the Democratic Alliance for the Betterment of Hong Kong (DAB) has expected that this will invite criticisms from other Members supporting the motion or the amendment. They would say that the DAB is disregarding the consumers' interests and allowing the Hong Kong and China Gas Company (the Gas Company) to corner the market and reap huge profit.

Yet, such criticism is unfair. Neither can we agree to the Honourable Fred LI's argument that regulation should be imposed regardless of the operator's performance and that price control will lead to lower prices.

The DAB is of the opinion that the success of Hong Kong's economy has been built on our free market system. Should a private firm which can fully make use of the environment to efficiently run its business and win over consumers be penalized or be regulated by the Government? The Gas Company is not a franchised utility. Moreover, according to the Consumer Council's report, coal gas is more competitive than liquefied petroleum gas (LPG) and electricity due to technological factor, Hong Kong people's cooking style and safety consideration, and is preferred by consumers. Other fuel suppliers, therefore, find it difficult to compete with coal gas. It is not because the Gas Company has deliberately created any market barrier that leads to the current situation. If the Government sets a precedent of imposing legislative control on a non-franchised company, it will have a negative impact on our existing investment environment and send a wrong message to the commercial operators that enterprises which have successfully obtained a sizable market share will be penalized and this will dampen their willingness to invest.

Secondly, the DAB also queries whether regulation through legislation may lead to lower prices, service improvement and achieve the objective of safeguarding the consumers' interests. The DAB understands that the motive behind the motion and the amendment proposed by Mr LAU Chin-shek and Dr LAW Cheung-kwok respectively is their worry that the Gas Company will put up prices at will in the future if regulation is not imposed today. Because of this worry, they have proposed to impose regulation through legislation as a preventive measure. But in fact, compared with LPG, the price of coal gas has decreased during the past 10 years. At present, LPG in cylinder is 60% more expensive than coal gas, while electricity is 30% more expensive than coal gas. So the DAB is more concerned rather that regulation through legislation might on the contrary induce the Gas Company to ask for a franchise. At the current stage, the Gas Company should not be regarded as a monopoly although it has the potential to become a monopoly. The Government should therefore pay full attention to its operation. However, careful consideration should be given as to whether or not regulation or control should be imposed on it.

Mr President, the DAB is of the opinion that the Government is now obliged to ensure that the market remains open and to introduce competition so as to break the current situation that there is only one dominant player in the market. And in doing so, it will improve service quality and prevent any vicious price increase. The international telephone market is an obvious example. Initially there was only one operator. Starting from last year, three new telecommunications companies have join in. In order to solicit customers and scramble for the market, these companies lowered their tariffs one after another, in addition to the implementation of various new measures to improve service quality. In this regard, the elimination of market barriers and the introduction of healthy competition should be the way to maximize the benefits of the consumers.

The DAB does not think that our opposition to the motion means that we no longer care about the consumers' interests. We have to emphasize that the DAB is the first political group that has set up a consumer interests concern group and the first one to undertake inspection in all supermarkets in Hong Kong to look for expired food items. Three comprehensive surveys of this kind have been carried out so far.

Mr President, the DAB agrees that any monopolistic enterprise or any enterprise which has potential to become a monopoly should be subject to a certain degree of control in order to ensure that the consumers can get suitable and quality service at a reasonable price. But we do not think that it is the right time to regulate the Gas Company through legislation.

With these remarks, I oppose Mr LAU Chin-shek's motion and Dr LAW Cheung-kwok's amendment.

SECRETARY FOR ECONOMIC SERVICES (in Cantonese): Mr President, I have listened carefully to the views expressed by Members on the Honourable LAU Chin-shek's motion and Dr the Honourable LAW Cheung-kwok's amendment. Let me first thank Members for their valuable views. These views will certainly have a positive role to play in the Government's future assessment of the Consumer Council's report.

First of all, let us examine what perspective the report has adopted towards our philosophy. The Government's philosophy is to allow market forces to determine the allocation of resources. We believe that this should result in the greatest benefit to the community. Experience has shown that a free and fair market is the best way to promote competition and efficient use of resources on the one hand and reduce costs and prices on the other. Of course, the Government recognizes the need, at times, to protect the individual consumers from abuse of market power. The Government has never feared to adopt appropriate measures to protect the public interest where a monopolistic situation exists and when intervention is really necessary. The Consumer Council's report in fact makes five recommendations. The report recommends:

First, that a "common carrier" gas distribution system should be adopted; that is, the gas distribution network should be opened up for the use of different suppliers of the same type of gas;

Second, that the use of natural gas should be encouraged;

Third, that the Hong Kong and China Gas Company (the Gas Company) should be regulated before a "common carrier" system becomes operational;

Fourth, that developers should be encouraged to install three-phase electricity supply in new housing developments, so that consumers can choose between gas and electric water heating after occupation; and

Finally, that an Energy Commission should be established, with responsibility for co-ordinating, monitoring and regulating the energy sector.

This report has far-reaching implications not only for the gas supply industry, but also the whole subject of energy policy for Hong Kong. For instance, if the Government is to set up an Energy Commission to fully co-ordinate, monitor and regulate the energy sector, it will be necessary to consider many questions before a decision could be made. As regards the concept of a common carrier system as recommended in the report, the Government will definitely have to look at similar systems that are being considered or have been implemented in other countries, and examine the benefits this system brings to the local people as well as other things. Regarding the supply of natural gas, some Members are concerned that this might be something very remote. But in fact natural gas has come to Hong Kong and there are suppliers willing to consider supplying this gas fuel. Because of the far-reaching implications of the report, as soon as it reached the Government, we invited comments on the report from the general public and other interested parties and had received by the end of September comments from people and organizations from all sectors, including District Boards, engineers, architects, tertiary institutions, developers, fuel gas suppliers, power companies and appliance importers. The Economic Services Panel of this Council had an initial discussion on the report on 8 November. However, the Government cannot possibly make a hasty decision today without carefully considering the views of different parties. But I can promise Members that we will consider different views and then publish a detailed Government Response to the report in early 1996.

Mr President, allow me to express my views on the motion and the amendment. First of all, the amendment. Mr President, while I can agree with Dr LAW Cheung-kwok's view to the extent that the Government should consider encouraging new suppliers to enter the gas fuel market, I have great reservation regarding his proposal that the Government should introduce legislation (the key word is "legislation") to monitor the Gas Company. As regards Mr LAU Chin-shek's motion, while the Administration can agree with Mr LAU that the Government should respond promptly to the Consumer Council's report, we cannot support his proposal that the Government should introduce legislation at this stage to regulate domestic fuel suppliers and their tariffs. At the moment, there are six liquefied gas fuel suppliers other than the Gas Company in Hong Kong. Until the Consumer Council's report has been considered, the Government certainly cannot consider introducing legislation to regulate all the seven (which include the Gas Company) gas fuel suppliers.

Mr President, the Government will give Members a full report after studying the pros and cons of relevant policies. Also, I suggest that, if possible, we let the Consumer Council and the Gas Company have an opportunity to give a detailed presentation of their views at the next meeting of our Economic Services Panel. Thank you, Mr President.

PRESIDENT: Mr LAU Chin-shek, do you wish to speak? You have five minutes to speak on the amendment.

MR LAU CHIN-SHEK (in Cantonese): Mr President, first of all, let me point out that I support the principle of fair trading, and would urge the Government to legislate for its implementation as soon as possible. However, I cannot fully support Dr the Honourable LAW Cheung-kwok's amendment because it only asks for government regulation of the Hong Kong and China Gas Company (the Gas Company) but not suppliers of other fuel gas such as liquefied petroleum gas (LPG). I feel that this will be unfair to some consumers because for gaseous fuels, especially those supplied through central pipelines, the option of switching does not exist unless a common carrier can really be adopted in the future. Presently, the choice for coal gas or LPG is not with the consumer. When you move into a flat, the decision on using coal gas or piped LPG has already been made by the developer. You cannot choose to use LPG or coal gas by pressing a button at will. Should you want to switch to another kind of fuel in future, it will be technically impossible. Gaseous fuel is a very special commodity. Even if the Government has imposed regulation on the Gas Company to make its tariff and service quality more reasonable, people who are using piped LPG will not be able to switch to coal gas on their own initiative because the building in which they are living has not been installed with pipes for the supply of coal gas. Presently, there are 23 public housing estates and Home Ownership Scheme estates still using central piped LPG in Hong Kong, which means there are totally more than 200 000 households using piped LPG. So if regulation is imposed on coal gas only and not on LPG, it will be an obvious neglect of the interests of these over 200 000 households.

Mr President, there have been some remarks in the debate that I find disappointing. Although quite a number of colleagues emphasized that they were concerned about consumers' interests, actually they were speaking for the public utilities and the Gas Company. Whose interests should we protect in the first place, the consumers' or the public utilities'? This is a question that a fully elected Legislative Council should seriously ponder.

Mr President, I so submit. Thank you.

Question on Dr LAW Cheung-kwok's amendment put.

Voice votes taken.

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

Mr Frederick FUNG claimed a division.

PRESIDENT: Council shall proceed to a division.

PRESIDENT: Honourable Members may wish to be reminded of certain Standing Orders. I do not wish to remind Members here and then, but I heard no declaration of interests during the debate on the motion and the amendment. I assume that no interests needed to be declared during the debate. But Standing Order 65 provides, inter alia, that a Member shall not vote upon any question in which he has a direct pecuniary interest. In other words, a direct pecuniary interest however incurred, occurred or acquired, for example, even as a consultant to the gas company or to any domestic gas supplier, might be considered to be an interest in connection with either the Hong Kong China Gas Company or any other domestic fuel supplier, which disqualifies a Member from voting.

PRESIDENT: Will Members please register their presence by pressing the top button in the voting units on their respective desks and then cast their votes by pressing one of the three buttons below?

PRESIDENT: Two short. Before I declare the result, Members may wish to check their votes. Are there any queries? The result will now be displayed.

Mr Frederick FUNG, Mr CHAN Wing-chan, Miss CHAN Yuen-han, Mr CHENG Yiu-tong, Mr CHOY Kan-pui, Dr LAW Cheung-kwok, Mr Bruce LIU, Mr MOK Ying-fan and Mrs Elizabeth WONG voted for the amendment.

Mr Allen LEE, Mrs Selina CHOW, Mr NGAI Shiu-kit, Mr Edward HO, Mr Ronald ARCULLI, Mrs Miriam LAU, Mr CHIM Pui-chung, Mr Henry TANG, Dr Samuel WONG, Dr Philip WONG, Mr Howard YOUNG, Mr James TIEN, Mr CHAN Kam-lam, Mr Paul CHENG, Mr CHEUNG Hon-chung, Mr David CHU, Mr IP Kwok-him, Mr Ambrose LAU, Mr LO Suk-ching, Miss Margaret NG and Mr NGAN Kam-chuen voted against the amendment.

Mr Martin LEE, Mr SZETO Wah, Dr LEONG Che-hung, Mr Albert CHAN, Mr CHEUNG Man-kwong, Mr Michael HO, Dr HUANG Chen-ya, Miss Emily LAU, Mr LEE Wing-tat, Mr Eric LI, Mr Fred LI, Mr James TO, Dr YEUNG Sum, Mr WONG Wai-yin, Mr LEE Cheuk-yan, Mr Anthony CHEUNG, Mr Albert HO, Mr LAU Chin-shek, Mr LEE Kai-ming, Mr LEUNG Yiu-chung, Mr SIN Chung-kai, Mr TSANG Kin-shing, Dr John TSE and Mr YUM Sin-ling abstained.

THE PRESIDENT announced there were nine votes in favour of the amendment and 21 votes against it. He therefore declared that the amendment was negatived.

MR FREDERICK FUNG (in Cantonese): Mr President, I pressed the "Aye" button when I cast my vote just now, but the machine automatically indicated "Abstain".

PRESIDENT: I am sorry, Mr FUNG, I have already declared the result. Do you have a Member verifying that you had actually pressed the "Aye" button or the "No" button?

MR FREDERICK FUNG (in Cantonese): Mr President, I pressed the "Aye" button when I cast my vote just now, but the machine automatically indicated "Abstain".

MR FREDERICK FUNG (in Cantonese): I can only ask the Members sitting next to me whether they saw me press the "Aye" button. Earlier on, when Members said "Aye", I could only hear two voices, which were Dr the Honourable LAW Cheung-kwok's and mine.

PRESIDENT: Mr FUNG, the print-out shows that you voted for the "Ayes".

PRESIDENT: Mr Mok Ying-fan?

MR MOK YING-FAN (in Cantonese): I think there is no problem now because earlier on I saw the Honourable Frederick FUNG pressed the "Aye" button but "Abtain" was indicated instead, and so I asked whether he had abstained or voted for the amendment. However, there should be no problem now.

PRESIDENT: Mr LAU Chin-shek, you are now entitled to reply and you have four minutes out of your original 15 minutes.

MR LAU CHIN-SHEK (in Cantonese): Thank you, Mr President. I would like to stress one point and that is, regulation is not a form of punishment. It is entirely reasonable to regulate the market which supplies fuel that everyone needs and do something on a company which increase its charges at will. I think regulation will make a public utility company accountable and responsible to consumers who will, in turn, be charged at more reasonable rates and provided with better services.

Some Members said that as the Hong Kong and China Gas Company (the Gas Company) was not making exorbitant profits and there had been no problem so far, regulation would not be required. This point was raised by the Honourable Mrs Selina CHOW and some other Members who argued that we might as well introduce regulation when the Gas Company did make exorbitant profits. As I have pointed out time and again, 10 years ago shareholders of the Gas Company earned $1.5 for every $10 paid by the customers, and now shareholders gain $3 out of every such $10. Can we call this reasonable?

Mrs Miriam LAU said, "You behave like a judge who makes a judgement without hearing the evidence." After the Consumer Council has made public its report, the Gas Company was given ample opportunities to express its views and contact legislative councillors. The opinions of many legislators today are, in fact, almost identical to what the Gas Company had told me in their lobbying exercise. With the passing of such a long period of time, am I really acting as if I am making a judgement arbitrarily? She also said that many publicly-run companies in foreign countries has been privatized, but she did not point out that even after privatization, regulation was not removed. Regulation is still in place to regulate the market.

At first, I did not intend to make any reference to the Democratic Alliance for the Betterment of Hong Kong (DAB). But since the Honourable IP Kwok-him said thus we had criticized them, it would not be nice if I do not say something, thus not living up to the accusation of criticizing them. I notice a problem and that is, the Honourable CHAN Kam-lam of the DAB has never mentioned coal gas as a public utility but only referred to it as an enterprise. I think this is a very ambiguous attitude. How can a public utility like the Gas Company be an enterprise? Secondly, you have all along been misleading us by equating regulation with profit control. I have never mention in my speech that regulation meant profit control. Nor did the report of the Consumer Council state that regulation was to be effected through profit control. It only mentioned price control. We may consider imposing price control, or requiring the matter to go through the Executive Council or the Executive Council as well as the Legislative Council. In this connection, please do not mislead us. Some people, including the Honourable Ambrose LAU sitting next to me, remarked that such regulation would have an enormous impact on a free economy, and then said that a decision would be made after the study report was completed. In fact, he has already decided not to accept this motion and it is only an excuse to say that he would wait for the report. Please frankly say so if you oppose the motion or do not support it. There is no need to be evasive by saying that a decision would be made after the completion of the report.

Some people, in view of the economic depression and the steady increase in the unemployment rate this year, have been clamouring for a freeze on all fee increases by public utilities. But if we do not support the regulation of public utilities, such as coal gas, how can we effect a freeze in the increases? Is our endeavour to freeze the charges of public utilities a whole-hearted or half-hearted effort?

Mr President, these are my remarks. Thank you.

Question on Mr LAU Chin-shek's motion put.

Voice votes taken. THE PRESIDENT said he thought the "Ayes" had it.

Mr LAU Chin-shek claimed a division.

PRESIDENT: Council shall proceed to a division.

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

PRESIDENT: Still one short of the head count. Before I declare the result, Members may wish to check their votes. Are there any queries? The result will now be displayed.

Mr Martin LEE, Mr SZETO Wah, Dr LEONG Che-hung, 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 James TO, Dr YEUNG Sum, Mr WONG Wai-yin, Mr LEE Cheuk-yan, Mr CHAN Wing-chan, Miss CHAN Yuen-han, Mr CHENG Yiu-tong, Mr Anthony CHEUNG, Mr CHOY Kan-pui, Mr Albert HO, Mr LAU Chin-shek, Dr LAW Cheung-kwok, Mr LEE Kai-ming, Mr LEUNG Yiu-chung, Mr Bruce LIU, Mr MOK Ying-fan, 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 NGAI Shiu-kit, Mr Edward HO, Mr Ronald ARCULLI, Mrs Miriam LAU, Mr CHIM Pui-chung, Mr Eric LI, Mr Henry TANG, Dr Samuel WONG, Dr Philip WONG, Mr Howard YOUNG, Mr James TIEN, Mr CHAN Kam-lam, Mr Paul CHENG, Mr CHEUNG Hon-chung, Mr David CHU, Mr IP Kwok-him, Mr Ambrose LAU, Mr LO Suk-ching, Miss Margaret NG and Mr NGAN Kam-chuen voted against the motion.

Mrs Elizabeth WONG abstained. THE PRESIDENT announced that there were 31 votes in favour of the motion and 22 votes against it. He therefore declared that the motion was carried.

UNEMPLOYMENT ASSISTANCE SCHEME

MISS CHAN YUEN-HAN to move the following motion:

"That, in view of Hong Kong's escalating unemployment rate, the worsening unemployment problem, the increasing financial hardship confronting the unemployed workers, and the failure of the current Comprehensive Social Security Assistance Scheme to relieve their immediate need, this Council urges the Government to set up an Unemployment Assistance Scheme and to provide those unemployed persons who are in need of assistance with an amount no less than one-third of Hong Kong employees' median income."

MISS CHAN YUEN-HAN (in Cantonese): Mr President, I move the motion standing in my name in the Order Paper to set up an Unemployment Assistance Scheme.

In view of Hong Kong's escalating unemployment rate, the worsening unemployment problem, the increasing financial hardship confronting the unemployed workers, and the failure of the current Comprehensive Social Security Assistance Scheme to relieve their immediate needs, I think it is necessary for the Government to set up an Unemployment Assistance Scheme and to provide those unemployed persons who are in need of assistance with an amount no less than one-third of Hong Kong employees' median income.

Unemployment problem getting more serious

The unemployment problem, which has been worsening continuously, is so serious now that the Hong Kong Government must address the issue squarely. In less than a week after the Governor convened the second summit meeting on employment, the Government announced that the latest unemployment rate had further risen to 3.6%, which is an all time high over the past 11 years. Being a Member from the grass-roots and a person working in a trade union, I absolutely cannot accept the explanation of the Government Economist, Mr TANG Kwong-yiu, who said that the unemployment rate had stabilized and that the increase was only due to sampling errors. I think this is nothing more than an excuse to camouflage the incompetence of the Government.

Who is to blame for the unemployment problem?

My view is that the Government should largely take the blame for the plights that workers are in today. All along, the Government has no long-term industrial policies, labour policies and manpower training policies in place to facilitate the advancement and transformation of the Hong Kong economy, and to assist the manufacturing workers to adapt to social changes and acquire new technology and new knowledge to enable themselves to switch to work in other industries successfully. On the contrary, the Government has always given way to the short-term interests of employers by importing an enormous pool of foreign workers and allowing employers to suppress workers' wages. This has unquestionably struck further blows to the "wage earners" and subjected workers to difficulties.

Plights of unemployed workers

Hong Kong is a society which is utterly devoid of social security. It is not uncommon that "workers work so strenuously that they turn from sturdy to frail and finally into beggars". It is generally the mentality of the "wage earners" coming from the grass-roots to "store up firewood in sunny days to prepare for rainy days". This is because all along Hong Kong has been lacking in a well-established social security system and so the grass-roots cannot be "cared for when they grow old", "cured when they fall ill" and "safeguarded at times of unemployment". The "wage earners" know perfectly well all along that they have to count on themselves rather than the Government. Therefore, it is vitally important for all "wage earners" to preserve their "rice bowls", which workers have largely depended on to have their livelihood and lives safeguarded.

Over the past decade or so, Hong Kong was fortunate to have "sunny days", characterized by a sustained growth in the economy and plenty of job opportunities. Unemployment did not pose any problem at the time. Workers worked industriously and lived frugally. They toiled extremely hard night and day and managed to eke out a living. However, confronted today with economic restructuring, a market crammed with foreign labour, high inflation and a persistently increasing unemployment rate, workers are living in straitened circumstances they have never experienced before. Without the support of the society, unemployed workers are compelled to brush aside their dignity and take out loans from relatives and friends and even from loansharks. Many employed workers can only swallow the insult in the face of unscrupulous suppression from some employers in order to "keep their rice bowls" such that the livelihood of their families will not be threatened. For Hong Kong people, who are so used to standing on their own feet to earn a living, we can imagine the great psychological pressure and pressure of livelihood that they endure when they lose their jobs.

Rice bowls broken, jobs lost, livelihood threatened, and dignity shattered

Successive case of suicide and family tragedies, a drastic increase in the number of crimes and an increasing number of applications for public assistance are telling us that the serious unemployment problem has created all kinds of social crises. An alarm has also been sounded for the entire community of Hong Kong. If this problem is not attended to squarely, the Hong Kong society will have to pay a formidable price for it!

Why do we have to introduce unemployment protection?

In short, unemployment protection is our right. Article 6 of the 1966 International Covenant on Economic, Social and Cultural Rights stipulates the following: "..... recognize the right to work, which includes the right of everyone to the opportunity to gain his living by work which he freely chooses or accepts and will take appropriate steps to safeguard this right."

In consideration of the following five points, I think it is now highly imperative for Hong Kong to set up an unemployment protection system.

As a result of the continued economic restructuring, unemployment has persistently worsened. Unemployment has transformed from a short-term problem to a long-term and structural one. The Government must not turn a blind eye to it. To say that the unemployment rate will drop within a short period of time and it is, therefore, unnecessary to introduce unemployment protection is just talking nonsense.
　
A disparity between the rich and the poor and an inequitable wage system have long existed in the community of Hong Kong. Many "wage earners" have, in fact, "failed to store up enough firewood in sunny days to prepare for rainy days". They are put in an even more appalling situation once they become unemployed. One can imagine the fairly heavy pressure of livelihood that they are made to bear without unemployment protection.
　
The workers' right to work should be safeguarded and unemployed workers should also be respected and allowed to lead a dignified life on humanitarian grounds. Unemployment assistance enables unemployed workers to tide over their difficulties without losing their dignity.
　
In order to uphold social justice and narrow the gap between the rich and the poor, the Government should assume the role to redistribute wealth and encourage the society to collectively tackle the social problem of unemployment.
　
The introduction of unemployment protection can stabilize the society and promote economic development.

In consideration of the above, the setting up of an unemployment assistance scheme should brook no delay so that unemployed workers will be provided with immediate financial assistance and that they will have certain safeguards in time of unemployment and will not become isolated and cut off from assistance.

The unemployment assistance proposal

The Constitution of the International Labour Organization stipulates "the prevention of unemployment, the provision of an adequate living wage and the organization of vocational and technical education and training."

For this reason, I think a reasonable unemployment assistance scheme should serve as:

a short-term measure: We suggest that unemployment assistance be granted for a period of no more than six months at most.
a transitional measure: Its purpose is to assist the unemployed to end their unemployment by seeking employment again. The unemployed will not be allowed to remain unemployed endlessly.
a non-indulgent measure: The assistance is granted in an effort to encourage the unemployed to stand on their own feet and take active steps to "seek jobs" so that they will not have to depend on public assistance to make ends meet.
a developmental measure: The attitude adopted towards manpower resources should underscore development, recognition and training. The unemployed should be given support to rejoin the labour market.
a positive measure: To enable all sectors in the community to take a positive attitude towards unemployment, rather than leave the unemployed on their own.

In this connection, I put forth this unemployment assistance proposal as it incorporates the said merits and is worth the consideration of this Council.

Under this proposal, applicants are required to meet three criteria to be eligible for unemployment assistance.

Applicants must have worked in Hong Kong continuously for one year or more before submitting their applications.
Those who have been unemployed for one month and registered with the Labour Department to seek employment will be accorded priority in their application for the assistance and assistance will be granted if they remain unemployed for two months.
Applicants are required to make a declaration of their assets. Their disposable assets cannot exceed $116,000 (being Hong Kong employees' average wage in March 1995, which is $9,700, multiplied by 12 months).

The assistance to be granted will be an amount equivalent to one-third of the median wage. If we base the calculation on the median wage in March 1995 and that is $8,600, the amount is around $3,000.

With the implementation of this proposal, if applications are received from 60% of those eligible for the assistance at a time when the unemployment rate stands at 4%, it is estimated that one year after the implementation of the scheme, the expenditure will roughly be some $800 million. Even if the unemployment rate has continuously worsened to 10%, the estimated expenditure will only be some $2.16 billion. Judging from the foreign exchange and the surplus reserves that the Hong Kong Government now amasses, I think this proposal, which costs such a small amount and which is conducive to resolving the most pressing problem of unemployment in Hong Kong, has a special meaning and a definite cost-effectiveness. It is worthwhile for Members of this Council and the Government to consider implementing this proposal.

This proposal, I believe, will not produce the effect of "nourishing laziness" or adversely affect the economy. It is because under this proposal, the proposed unemployment assistance provides only an amount of no less than one-third of the median wage and the period for it to be granted is six months. I think such assistance, which is just a small amount and is granted for a short period of time, will not have too big an impact on the work incentive of employees. Those who may be affected are workers earning a monthly income of less than $3,000, who account for 2.5% of the total workforce. Some of these workers may become work-shy because of this $3,000 unemployment assistance. But as the assistance is granted only for a short period of time, it is envisaged that the impact will be extremely slight. Therefore, the concern that this proposal will be "nourishing laziness" is unfounded.

Besides, from an economic point of view, the granting of unemployment assistance will promise two advantages. First, it will help unemployed workers to tide over their difficulties and will be conducive to maintaining stability in society, hence providing a good environment for economic development. Secondly, it can stimulate the overall demand in society. As the unemployed have a very high marginal propensity to consume, the assistance that they are granted, though a small amount, will be very important for them. They will certainly spend it, thus producing a positive effect on consumption in society.

As a matter of fact, it is an insult to the unemployed to say that unemployment assistance will "nourish laziness". Are they unwilling to find a job? No. They are just unable to find one. They are reluctant to seek employment not because of their eligibility for unemployment assistance, but because their confidence in finding a job and their work incentive are both dampened as a result of successive setbacks they faced in job interviews when looking for employment. Therefore, an important principle that we have to consider to prevent the unemployed from falling into long-term unemployment is to help the unemployed build up their confidence, seek employment and rejoin the labour market as early as possible.

In consideration of humanitarian grounds and the principle of solidarity and mutual assistance among members of the community to care for the poor, I once again urge the Government to set up an unemployment assistance scheme.

With these remarks, I hope colleagues in this Council will support the motion.

Question on the motion proposed.

PRESIDENT: Mr Fred LI and Mr Frederick FUNG have given notice to move amendments to this motion. As Members were informed by circular on 17 November, under Standing Order 25(4) I shall ask Mr Fred LI to speak first, to be followed by Mr Frederick FUNG; but no amendments are to be moved at this stage. Members may then debate the main motion as well as the two amendments listed on the Order Paper together.

MR FRED LI (in Cantonese): Mr President, the unemployment rate of Hong Kong has reached 3.6%. Everybody in Hong Kong clearly recognizes the gravity of this problem, except the Government Economist. We may find that some relatives or friends around us are in the sorry plight of unemployment. The Democratic Party is always concerned about the grass-roots. We are dedicated to serving grass-roots and helping the unemployed. We are standing on their side. This has always been our stance. It was, it is, and it will continue to be so. On this major premise, we are not different from the Hong Kong Federation of Trade Unions, the Democratic Alliance for the Betterment of Hong Kong, the Hong Kong Confederation of Trade Unions or the Hong Kong Association for Democracy and People's Livelihood. What we are discussing today is not whether we should help the unemployed workers, as this is never a question to the Democratic Party. For sure, the unemployed should be helped. The question is how to help them.

How should we help the unemployed workers? There have been many suggestions. The setting up of an Unemployment Assistance Scheme to help the unemployed tide over the difficulty is the prevailing suggestion. The idea is well-intentioned and we absolutely support the idea of assisting the unemployed. However, to give financial support to the unemployed, we must find the most effective and expeditious way to do so. The establishment of an Unemployment Assistance Scheme is not the best way to help the unemployed and we also believe that the administrative cost will be quite high and the fund itself may be abused. We are of the opinion that the setting up of an Unemployment Assistance Scheme will also entail many insurmountable technicalities.

The Democratic Party believes that assistance can be promptly provided to the unemployed just be making some modifications to the exiting Comprehensive Social Security Assistance (CSSA) Scheme. Although there are still problems in the CSSA Scheme and we have noted that an overall review on this scheme is necessary, yet the payment distribution mechanism of the CSSA is an existing executive department which has already been staffed and has set up its offices throughout the territory. As its network of payment distribution is quite comprehensive, it is not necessary to establish another assistance system. With appropriate modifications to the CSSA system, assistance can be provided effectively.

The first question we have to ask is: what are the problems in the existing CSSA Scheme? I believe we all know that the biggest problem is the low rate of payment, the low assets assessment ceiling and the belated payment of assistance.

Hong Kong has never had any specific assistance scheme set up for the unemployed. Currently unemployment assistance can only be available through the CSSA Scheme. The applicant has to submit his application to the Social Welfare Department (SWD), which will then instruct the applicant to register for work with the Labour Department within three days. If the Labour Department cannot find any job the for the applicant within a month, then the applicant will be eligible for CSSA payment. However, the applicant still has to go through an assets assessment. The total value of disposable assets of an able-bodied singleton must not exceed $26,650. For a family, the total value of assets of each family member must not exceed $17,750. In addition, the applicant must have resided in Hong Kong for at least one year. During the seven months from January 1995 to July 1995, the number of unemployed workers applying for the CSSA has increased by 33% to 6 700 and this figure is on the rise.

In practice, this scheme cannot cover all those unemployed people mainly because the assets assessment is so stringent that many who are really in need are not eligible simply because they still have a meagre sum of savings in the bank. Further, the amount of payment is too small to meet the needs of an adult.

To suit the remedy to the problem, therefore, the Democratic Party proposes to increase the CSSA payment for the unemployed, that means the CSSA payment obtainable by the able-bodied adults. We propose to relax the ceiling on disposable asset and to improve the payment procedure so that the unemployed can obtain the quickest and the most suitable form of assistance.

We recommend that the CSSA payment for able-bodied individuals should be increase to $2,750 a month. This figure was derived from Dr McPHERSON, who was commissioned by the Welfare Panel of this Council in 1994 to study the issue and with whom the Welfare Panel had conducted numerous discussions on the question. We have computed that this is the minimum amount of money to meet the most basic daily expenses in order to afford a dignified life.

In addition, we suggest that the ceiling on assets should be relaxed and raised to $96,000. The current CSSA ceiling on assets is too restrictive. The current disposable assets of an individual applicant is limited to $26,650 only. The figure we propose is $8,000, the median wage, times 12 months. We also request that the SWD should work out a clear code of practice so as to improve the situation where delay in processing applications for CSSA with respect to unemployment may occur.

As for the recommendation by the Hong Kong Federation of Trade Unions to set up an Unemployment Assistance Scheme or an emergency unemployment fund, even if it does not have to go through all the legislative procedures, it will take a long period of time just to establish a new organization for assessing the applications and distributing payments. Please note that what we are talking about and discussing is how to help the 110 000 unemployed workers now. If we have to wait for a long time, the solution will become too remote. In fact, there is already an existing executive department for the implementation of the CSSA Scheme. Should the proposed Unemployment Assistance Scheme be managed by another administrative agency, we are worried that the administrative cost will be quite high. So we do not think this is an economical or an effective way to help the unemployed workers.

The purpose of setting up an Unemployment Assistance Scheme is to help the workers. We certainly support his objective, yet we cannot but point out that there are other more convenient and effective methods to achieve the same end.

I do not know whether Members from the business sector will support the motion and the amendments put forward today. But it will be most regrettable if they eventually oppose both the motion and the amendments. As the business sector has earned profits in Hong Kong, they must share part of the social commitments. As the Chinese saying goes, "Those in the same boat should help one another." I hope they can lend a supporting hand to those in need.

I hope colleagues will consider the Democratic Party's proposal. I so submit.

THE PRESIDENT'S DEPUTY, DR LEONG CHE-HUNG, took the Chair.

MR FREDERICK FUNG (in Cantonese): Mr Deputy, the local unemployment rate has successively broken new records over the past year, reaching the highest level in these 11 years. The unemployed workers inevitably encounter many financial hardships in their daily lives. According to some unemployed workers contacted by the Hong Kong Association for Democracy and People's Livelihood (ADPL), they have to spend $10 to $20 everyday on buying newspapers to look for jobs. They also spend money on transport when travelling to and from the Labour Department and going to job interviews. With these burdens adding onto the necessary expenditure on the two or three daily meals, life becomes increasingly hard for them. The longer they remain unemployed, the greater the economic burden grows. If they have family members to support, the pressure is even more heavy. Unemployment not only brings financial problems, it is also psychologically or mentally upsetting to a certain extent. For example, they would think they are the idle members of the family, or start to blame themselves for failing to find a job to support the family and begin to question their own ability and lose confidence. The many social problems brought about by unemployment should be solved and addressed by the Government immediately.

Regarding financial assistance for the unemployed, the ADPL propose the provision of short-term unemployment assistance by the Government to meet the necessary expenses of the unemployed during the period of their job hunting. The Government has claimed that the unemployed could apply for Comprehensive Social Security Assistance (CSSA) to alleviate their plight. Under the present system, however, the unemployed can only apply for the monthly CSSA payment of $1,210 (the rate in the year 95-96) from the Social Welfare Department (SWD) if they fail to find a job one month after registering with the Labour Department. The SWD has to examine the applicant's financial situation to determine his eligibility. But the records show that up to May 1994, there were only 4 060 cases of unemployed people receiving CSSA and the figure only increased to 5 675 in May 1995. In fact, many unemployed people are not eligible for CSSA because they live with their family and other members of the family are still having a job. The present CSSA, cannot help the jobless to improve their financial situations.

The setting up of an Unemployment Assistance Scheme is an expedient measure. Some people hold the view that the provision of unemployment assistance would raise the unemployment figure and encourage the unemployed to reply on the assistance, thus becoming inactive in their job hunt. The ADPL thinks that such worries are unnecessary as the cruse of the matter lies in how the Scheme is operated. The Government can impose restrictions on the recipients of assistance, such as the duration of the entitlement and the eligibility for assistance, so that the jobless will not stop their job finding because of the unemployment assistance. In this connection, the ADPL would like to make a few proposals.

Firstly, to be eligible for assistance, the applicant must be: (1) involuntarily unemployed those not in the workforce such as retired persons and housewives are not covered by the Scheme because they are not involuntarily unemployed; (2) normally employed in the past two years and have been out of work for at least three months (during which time they should have registered with the Labour Department); (3) having an income if no more than $15,000 to $20,000 in their previous job (anyone who has been earning more than this ceiling will not be eligible for assistance).

The ADPL proposes there should be no family income test for the Scheme so that applicants can receive the financial assistance without delay. As for the amount of assistance, it is proposed that from the fourth month of unemployment an applicant can get a monthly assistance of $3,000, which is about one-third of the median wage, from an ad hoc group formed by the Labour Department and the Social Welfare Department, for a maximum of six months. Our proposal is very similar to that of the Honourable Miss CHAN Yuen-han and the differences in details are not important. In principle, our proposal is basically the same as what Miss CHAN Yuen-han has said on the original motion. If the recipient still has difficulties and re-applies for assistance after six months, it should be referred as an individual case to the SWD, which will determine whether unemployment assistance should be continued or the applicant should be advised to apply for CSSA.

I suppose you may query whether the Government has adequate funds to support such a Scheme. I can tell you that up till the end of June this year, we have a surplus of about $150 billion, and the assets of the exchange fund have a total value of $450 billion, a rise of over 10% from the total value as at the end of last year. We believe Hong Kong is fully capable and in sound condition to provide unemployment assistance for a short duration.

Now, I would like to talk about my view and the ADPL's view on the amendment moved by the Honourable Fred LI of the Democratic Party. The proposal of the Democratic Party is to raise the level of CSSA for an unemployed person to $2,750, but the applicant has to pass an income test. I think this proposal can only solve the problem of those unemployed people who are single or the sole breadwinners of their family. The ADPL cannot agree with this proposal which has so many shortcomings. The proposal of the Democratic Party suggests solving the unemployment problem under the CSSA Scheme, showing the Party's failure to highlight the problem and to come up with a solution designed for the problem. With the general view still considering the present CSSA as a kind of relief and charity aimed at helping the elderly, the weak and the disabled. (while we may not agree with this viewpoint but the public do actually think so), I therefore do not consider this as a good proposal.

According to the proposal of the Democratic Party, applicants for unemployment assistance under CSSA have to go through a means test. It will take some time before the test can be completed. In view of the complexity of the means test process, it should be waived if the unemployment problem is to be addressed as soon as possible. Also, for some families such as those with four members, two or three of whom are in the workforce, if only one of them is out of a job, it is basically impossible for such a family to qualify for CSSA payment under the present system.

Lastly, I hope our colleagues from the business sector as well as the Government will not have a misconception that our proposed Unemployment Assistance Scheme will create a group of "idle people". As what Miss CHAN Yuen-han has said, the proposed unemployment assistance will be given for a short-term and governed by certain conditions so that on one hand, the Scheme can help those in need, and on the other hand, those concerned about the Scheme creating "idle people" can put their minds at ease. I therefore urge all our colleagues, especially those from the Democratic Party, to support the Unemployment Assistance Scheme. Thank you, Mr Deputy.

MRS ELIZABETH WONG: Mr Deputy, I rise to support the amendment moved by the Honourable Fred LI to the original motion. Basically, people who are out of work want work, not unemployment benefit. Lest we should slip unaware into a welfare state. We care for the welfare of the people. We are a very compassionate society and our society should do our best to help those who are in need immediately and to assist them financially. I think the Comprehensive Social Security Assistance Scheme is long overdue for a big overhaul, and I think also it is high time we adopted the recommendations of our venerable Professor MacPHERSON. I look forward to the Government's early implementation of this and I hope today we get the Government's concrete response to this request. Furthermore, I suggest that the fund for retraining of people should be better deployed by more imaginative matching of training people out of his job with the relevant employment and employers concerned. I also suggest that the existing retraining fund should be similarly augmented for such purposes.

Mr Deputy, as amiably explained by the Honourable Fred LI, we need to help people who are out of a job immediately and I think his proposals are eminently sensible because these proposals are capable of being speedily implemented. They can be best built on the existing system to achieve the objective of helping those out of work. Delayed action is delayed help. We need not delay, we need to act now. Thank you.

MR ERIC LI (in Cantonese): Mr Deputy, I had lunch (not breakfast) today with several independent Members. We talked about the motion debate today as well as the debate on the allocation of funds for the Mandatory Provident Fund Scheme to be held at the Panel on Financial Services on Friday. These two debates do not seem to be related but they do have some connections. We have a very simple suggestion which we hope that the Government and Members of this Council will consider. To be brief, we support raising the Comprehensive Social Security Assistance (CSSA) payment but we incline to consider the CSSA and unemployment assistance separately as the nature of the two are different. We do not wish to see that a retirement protection scheme, in whatever form, cannot be established by 1997 and even beyond. However, from the stands that many Members of this Council have taken publicly, we can see that no matter whether they discuss the unemployment problem or retirement protection, they will invariably go back to the matter of raising the CSSA payment and place both issues on a par. Therefore, a theory is still a theory and despite all the arguments we have, we may not be able to explain clearly. It seems that if the Government wants to respond positively in this respect, it must make a special effort to improve the CSSA.

I want to take this opportunity today to bring out the following point again. When proposing to implement the Old Age Pension Scheme, the Government promised to inject $10 billion for the establishment of a retirement protection scheme. But when the Government cancelled the Old Age Pension Scheme, it wanted to withdraw the $10 billion secretly. I feel that if the Government really has the sincerity to carrying out a retirement protection scheme or help the unemployed who need to apply for the CSSA, it should not withdraw the $10 billion that it promised. Other than allocating part of the money to the mutual insurance fund for the retirement protection scheme, I believe most of the remaining amount should be allocated to the Lotteries Fund to improve the CSSA payment in the next three years. However, I feel that details about how the money is to be used, such as the assessment criteria, the way to relax the conditions and the amounts to be paid out can be decided after the Social Welfare Advisory Committee has finished the overall review early next year. This suggestion of mine allows the Government to show its honesty and that it will not go back on its words at this critical moment. This suggestion will also add to the Government's stake in the funds allocation discussion this coming Friday and give the political parties intending to cast a dissenting vote a new cause to think carefully whether to veto the Government's proposal.

For many years, I have always held a firm belief in Hong Kong people's spirit of self-reliance and self-confidence which is exactly the driving force behind their determination to overcome all difficulties and succeed in pushing the economy ahead. Any suggestion to allow people to reap without sowing or to obtain tax-payers' money without proving their financial needs will not have my support. Therefore, although the intention of the Honourable Miss CHAN Yuen-han's original motion is good, I find it hard to render my support.

As regards the Hong Kong Federation of Trade Unions or any other workers' unions making their own efforts to set up an unemployment fund or organize fund-raising activities, I feel that this is a good target to pursue and should be encouraged. And I hope to show my support afterwards. I also feel that such actions conform to the general practice of trade unions in other countries. As for the Honourable Frederick FUNG's amendment, I cannot support it for the same reason. But I find the Honourable Fred LI's amendment highly agreeable with regard to its principle and direction. There are many reasons for that and I agree to the points that the Honourable Mrs Elizabeth WONG has just made. However, since I am the chairman of the Social Welfare Advisory Committee, and as the overall review of the CSSA ─ which also has an important part to play ─ has yet to be finished, it is impossible for me to express my views. This is because if I take a particular stand, it will jeopardize the objectivity of the future review work and it will also be unfair to the whole Committee. Therefore, with Mr Fred LI's understanding, I have no choice but to abstain.

MR JAMES TIEN (in Cantonese): Both the Liberal Party and the business sector are very concerned about the present unemployment problem. One of the reasons is of course that with a 3.6% unemployment rate, it means that the business sector itself is also having some problems. With such a large number of unemployed people, it shows that the economy is sluggish, a lot of businesses have gone bankrupt and some businesses are shrinking so that the number of unemployed is increasing. On the other hand, as we have a large number of unemployed people, the general consumption power is weakening, hence there are less people going shopping and dining out, and in turn the operation and sales of the business sector are also affected. From the above reasoning, we can see that the business sector is equally concerned about the problem of unemployment. However, let us ask ourselves this: Are all the bosses unscrupulous employers?

At present, there are 3 million employed people and 110 000 unemployed people. Are the bosses of these 3 million employed people all unscrupulous employers? Is it true that the community would become more balanced only after a redistribution of wealth and so on? Speaking for myself, I do not agree with this.

Turning to the motion today, both the Honourable Miss CHAN Yuen-han and the Honourable Frederick FUNG are saying that as the money concerned comes not from the business sector, and that it is merely an expenditure of the Government, Members should support the motion! As a matter of fact, we can see from the example of the United States that once the door or the tap for things like unemployment relief is opened or turned on, it is very difficult for it to be closed or turned off. It might sound reasonable now just saying that a person would be entitled to unemployment assistance when he is unemployed for three months and that the assistance which is as much as one-third of the median wage would only be provided for six months. Many years ago, when the United States first introduced unemployment assistance, it was also very reasonable. But once this door was opened, when the next batch of Congressmen were sworn in, they had to fight for something anyway. So the three-month period of unemployment for eligibility of assistance became two months and then subsequently one month; and the six-month payment period became one year and then changed to what it is in the United States today, a perpetual one. The "one-third" median wage level may also be increased progressively. I wonder whether the community and the Government would have the resources needed to pay for that at the end of the day. Another adverse consequence is that under these circumstances, many of those marginally employed would feel that it would be a better idea not to work.

In Hong Kong today, people like to be self-reliant and such situation would not occur. During the period from 1985 to 1995, when the economy was quite good, there were plenty of opportunities to change jobs, and workers or employees were more or less able to save up some money. While they have savings, I wonder if they really need assistance from the community immediately once they become unemployed. I think this idea would not be supported in view of our Chinese tradition and custom. Our Chinese custom is that one tries with his own efforts first, and then seek help from his family members and his friends and then as a last resort, the community. We are still of the view that the community should be the last resort.

Both the Liberal Party and the business sector feel that in today's Hong Kong community, we have to help people who are in need of help. As to what it means by people in need, there may be many different views amongst us. The business sector is of the view that people badly in need are those who are in predicament, we do not think that all those who are unemployed are in predicament. A person who has been unemployed for three months could be the former taipan of a bank and he could be very rich. If you give him some $2,000, he might just take the money as well. Would this not affect those who are really in need so that they end up getting less?

For this reason, the Liberal Party will support neither the motion moved by Miss CHAN Yuen-han nor the amendment moved by Mr Frederick FUNG.

The amendment moved by the Honourable Fred LI puts us in a very difficult position. We had been studying it for quite some time, and it was not until 5 o'clock this afternoon that we reached a decision. The main reason is that we feel we can support raising the Comprehensive Social Security Assistance (CSSA) payment. However, it would be a special move to raise the payment for the unemployed under the CSSA Scheme to $2,750 without mentioning the payment for other people such as the elderly or the disabled. The Liberal Party tends to support the idea of increasing the payment for all CSSA recipients (namely the 150 000 recipients) from $1,800 to $2,500 or $2,750. But we do have reservations about raising the payment just for those unemployed. However, this is not the most difficult part between us. The most difficult part is that in my discussions with Mr Fred LI, he insisted that the ceiling for assessment should be raised to $96,000, whereas the Liberal Party thinks that it is too high. As for the Government's $26,000 ceiling, many colleagues are of the view that it is low, and the Liberal Party also thinks that it is low. The Liberal Party had actually made the point during the debate in the last Session that we also hoped to raise this ceiling to $35,000 or $40,000. Of course, there was not any basis for setting those figures, as we are not saying that by setting it at $40,000, a certain number of people would benefit. We just believe that it should be raised step by step so that the Government will be able to cope with it financially. Our view is that Mr Fred LI's proposal to raise it to $96,000 would make almost all the 110 000 unemployed eligible to receive the assistance. Should all of them be entitled to it, the means test would be meaningless and would be made the same thing as the unemployment assistance Miss CHAN Yuen-han is now proposing. For the above-mentioned reasons, the Liberal Party has been deliberating it for quite some time and, with regrets, we have to oppose it. Thank you, Mr Deputy.

THE PRESIDENT resumed the Chair.

MR CHOY KAN-PUI (in Cantonese): Mr President, with 110 000 workers unemployed, the situation has indeed reached an alarming stage. As representatives of public opinion, how can we pretend nothing has happened? To help the unemployed workers out of their worsening economic difficulty, the Government needs to come up with plan for providing temporary and permanent solutions for them. In the short-run, financial assistance can indeed provide them with an immediate relief when they need it most. However, in doing so, we should bear in mind that Hong Kong is different from those European or American countries. Unlike those countries, Hong Kong is not a welfare state in which workers may get unemployment benefits when they become jobless. Of course, Hong Kong still adopts a low tax rate system, while the said countries levy heavy taxes to provide protection in terms of Comprehensive Welfare for their people. Basically, Hong Kong cannot compare to those countries in terms of social security. Unless we have a thorough change in our system, there is no need for us to establish an unemployment assistance scheme in addition to the existing Comprehensive Social Security Assistance (CSSA) Scheme. What we should do is, basing on what we have now, to raise the amount of standard CSSA payment to address a real need. But to satisfy the immediate needs of the unemployed, timely action is required. The said assistance must be raised immediately. We must not wait, as the Governor said in his policy address, till next year to raise some of the assistance or to conduct a comprehensive review of all social security schemes. We should not entice or encourage people to apply for the assistance mentioned, because it is after all a negative approach to deal out financial assistance. A positive approach to take is to provide and create more job opportunities for them. In this way, not only individual unemployed workers but also the community as a whole will benefit.

Mr President, with these remarks, I support Mr Fred LI's amendment. Thank you.

MR CHIM PUI-CHUNG (in Cantonese): Mr President, personally I am very pleased that this question has been put forward for discussion. I agree that the matter should be discussed as it is an issue that everybody is concerned about. I do not mind whose motion or amendment it is that is carried. What I intend to do is take this opportunity to present views for Members of this Council. Since there was full election this year, we now have more Members who tend to support the grass-roots. Together, such Members have 40 votes odd, against 10 to 20 votes from the other Members. With such a substantial support for the grass-roots, Members siding with the grass-roots should include in their consideration the overall framework of Hong Kong. They should adopt an attitude of cutting one's coat according to one's cloth. They should understand that 1999 is not Doomsday. Rather, it marks the beginning of another stage.

Whether or not we have faith in the social system and the system of the future Special Administrative Region, most of us will eventually be staying behind in Hong Kong. In the circumstances, it is of paramount importance that we hold an unbiased attitude. We should hold ourselves responsible for "issues" that arise rather than for "the political party" or "our own goals". We should treat everything as a social responsibility. So, I agree that urgent care (not "relief", but "care") should be given to the numerous unemployed. However, I hope that at the same time as the issue is put forward, the means to raise money to cover the expenditure is also mentioned. Undeniably, people often talk about the government surplus of more than $100 billion. We do understand that the Government has such an amount of surplus in hand and we are proud of this. If not for that amount of surplus, I am sure we would not be so "boastful" whenever we go. Now, I have this proposal to make. Since we need to take care of unemployed workers, Mr President, I suggest that the Government levy a monthly surcharge of $1,000 on each imported worker and domestic helper (at the moment there are 100 000-odd of them). In other words, the Government will have an extra revenue of at least nearly $2 billion annually, (Assuming there are 150 000 domestic helpers, a surcharge of $1,000 would generate $150 million each month. In addition, there are 10 000-odd imported workers. Together, the monthly surcharge would add up to $160 million, which means $2 billion annually.) Using this $2 billion to take care of the unemployed would be a fairer proposal as it involves raising money rather than just spending it. I would not oppose to proposals to care about people or to spend money. But specific means to "raise funds" should also be put forward. Why do people only know how to spend money but fail to come up with ideas to make money? You might say that is somebody else's responsibility to find out how to make money, but would it not be quite unfair?

I hope Members representing workers at the grass-roots would not create an antagonistic mentality in the society. We must understand that the Chinese Government meant to let capitalism survive in Hong Kong when it proposed the concept of "one country, two systems" for Hong Kong. Too strong an inclination towards "equal distribution of wealth" would make life even more deplorable than that under communist rule. Why then raise any objection against the Chinese Government at all? So do not act in such a way that only those things that would make one popular are given more attention. Such actions may of course win support from some people. In the long-run, however, I hope everyone can assess the issue with a rational attitude of seeking truth from facts.

We understand that there is horse-racing this evening. At present, the money staked in each race (I must declare my interest here: I do not bet on horses but I pay much attention to news concerning the society) amounts to nearly $150 million on average. Each race generates $30 million revenue for the Government and the Jockey Club. Where does the money come from? Of course there are those who would say: "One will surely stay poor if one does not gamble; and one will surely lose if one does so one should take chances." This is where social education comes in. The Government should educate the public more on such matters and given them more guidance that they should save up more and refrain from taking part too often in these gambling activities, or "games", which is sheer euphemism. Hence, in case they become jobless or are confronted with other livelihood problems, and need relief from society, they would be in a better position to take care of themselves.

Last night, the television programme "Tuesday File" documented a report about 30 people sharing a flat. It aroused my thoughts. I encourage everybody to do something for the grass-roots, but we must strike a balance. The good thing about Hong Kong is that we can "cut our coats according to our cloth". We are not encouraging government exploitation of the working class, but we need to understand that the social system of Hong Kong is different from those of European or American countries, which adopt a high tax rate policy. When one talks about the good things of foreign countries, one needs to consider as well the unique position of Hong Kong. We hope the Government can put forward solutions to the problem and study them with the relevant colleagues. One should not create social conflicts for one's own benefits.

Mr President, with these remarks, I will abstain later on.

MR LEUNG YIU-CHUNG (in Cantonese): Mr President, the continual rise in unemployment in Hong Kong has reached on alarming stage. The unemployment rate just released by the Government has risen from 3.5% last month to 3.6% at present. The number of unemployed has exceeded 110 000. However, the Government Economist still thinks that the rise is due to a statistical discrepancy. I think this opinion is absolutely ridiculous. I hope the Government can stop deceiving itself as well as others. Now is the time to find some quick solutions to help the unemployed, whose livelihood has been adversely affected, to tide over their difficulties.

As the saying goes, "Once on shore, pray no more". I think this is exactly what the Hong Kong investors do. In times of economic boom, workers "toiled day and night". They shed blood and sweat for the proposerity of Hong Kong. However, when an economic depression strikes, the investors would say, "I am not reluctant to take care of people from the grass-roots, but if I were to take care of them, I would need money. Where comes the money?" I think this kind of remark is a tongue-in-cheek one. If they are reluctant to take care of the grass-roots, they should not claim that they care. But if they do care, they should have the determination to minimize the gulf between the rich and the poor now existing in Hong Kong. In short, the rich are reluctant to provide even the minimal amount of financial support for the grass-roots. Many of our friends from the business sector often say, now that there are more Councillors from the grass-roots in the Legislative Council, these Councillors often stir up troubles, advocating free lunch and thereby discouraging investors from investing in Hong Kong. Is that really the case? Indeed, as Councillors representing the grass-roots, we feel that resources in the society should be reasonably distributed. We are not saying that everybody's money should be evenly distributed. Investors who said the above have nevertheless exposed their true nature.

Some people have argued that social welfare "would provide so much assistance as to spoil people". If that were the case, it would be just a kind of illness arising out of insufficient social education and social resources. But even if that happened, we should not "make a sacrifice in order to avoid the trouble".

I want to stress that a prime objective and responsibility of a government should be "full employment". But regrettably, the Hong Kong Government just sits there and does nothing, resulting in a greater supply of labour than there are job vacancies. Meanwhile, the disparity between the rich and the poor is very serious. Without the cover of social welfare, how can those belonging to the vulnerable grass-roots support themselves? The Universal Declaration of Human Rights clearly states: "All human beings are born ... equal ...". They have "the right to life ..." to a member of the community, can we just sit there with our arms folded and ignore their problems?

Let us look at the present social welfare position in Hong Kong. The level of Comprehensive Social Security Assistance (CSSA) payment is way below that which would "spoil people". Why? Data provided by the Social Welfare Department (SWD) show that between 1980 and 1991, Hong Kong's expenditure on social security amounted to only 0.5% to 0.6% of the Gross Domestic Product. The percentage was 30 to 40 times smaller than the 15% to 25% spent in advanced Western countries! In addition, if measured against the standards laid down by the International Labour Organization in 1952, not even one single social security item, in particular the item on unemployment protection, meets those standards. The international standard for unemployment protection is set at not less than 45% of the median wage, which should be $3,825 on the basis of a median wage of $8,500 in Hong Kong now. However, the CSSA payment the SWD is giving to the unemployed is only $1,210. Even the $1,490 proposed in the policy address, when compared with the international standard set, is far too small. Indeed, judging from the amount of CSSA payment, those people and their families who live on it must be leading a miserable life. The phenomenon has been widely reported in a number of newspapers. I just cannot understand why the Hong Kong Government has chosen to ignore these reports, and instead indulge in making such cold-blooded comments as "people on CSSA have more than enough money to spend".

Now some colleagues are proposing to raise the CSSA payment from the present amount of $1,210 to $2,750. I think this proposal, as the Honourable Miss CHAN Yuen-han has pointed out, would not be able to relieve the pressing needs of our workers. Nor can it be a long-term solution to assist unemployed workers.

As we all know, the current CSSA payment by the Government involves a number of stringent restrictions. For example, an applicant's assets have to be assessed. As a result, only those who are in extreme poverty are "qualified" to receive CSSA after being stripped of all their personal dignity and that of their family members. What is more important is that in the CSSA Scheme, the income of a household is treated as a basic unit. Individual members of a family who are unemployed simply cannot and are not qualified to receive unemployment relief from the CSSA. In the circumstances, it is impossible to relieve the pressing needs of the unemployed or help them face future problems if just the upper limit of the CSSA payment is raised. Therefore, I think the Government should set up an unemployment assistance system. In addition to providing assistance to the unemployed in real financial terms, the system will also enable us to provide the unemployed with additional services or support more quickly and more easily. Examples of such services or support are vocational training and job placement service. So, we need not worry about the possibility of "nourishing the idle".

MISS MARGARET NG: Mr President, if I am making a short speech in this debate it is not because I do not consider the subject important, or that I do not feel strongly about it. On the contrary, it is because I trust my colleagues in this Council would have discussed the pros and cons fully and emphatically.

Mr President, let me just make a few points. First I think it must be accepted as a fact that the present unemployment situation is a serious and urgent problem requiring immediate relief. Secondly, Hong Kong owes its success to a diligent workforce whose enjoyment of the fruits of our prosperity has been very modest indeed. The community cannot stand aloof now that workers are experiencing real difficulties. Speaking as a member of the professional sector which as a whole has in the past years been able to enjoy a greater measure of Hong Kong's economic success, I certainly cannot stand aloof. Thirdly, political wisdom alone would tell us that a large workforce faced with persistent unemployment and no relief is bad for social stability. On this alone, even the most clinical of economists among us should not recommend the Administration to give no relief.

The question is, what should be done to help? The answer must be something swift and of immediate effect with the minimum of bureaucracy. On the other hand, I fully appreciate that in addressing the burning need of the moment we should not bring in fundamental change without thorough consideration and consultation. It is in this regard that I am reluctant to support the motion of the Honourable Miss CHAN Yuen-han. Setting up an unemployment assistance scheme may or may not be right for Hong Kong in the future, but it is undeniably a fundamental change in the direction of our economic policy. We must be given the time and opportunity to study and debate all the implications of such a change before coming to a view. It is only fair to our constituents that we seek their views before deciding. We do not have the time now since the need is urgent.

However, Mr President, out of an abundance of caution, I would suggest that any relief we propose now must be only a temporary measure open to review at the end of a definite period. We are, after all, justifying a special solution to a very special situation. The financing of such relief should be by a separate earmarked fund to avoid any serious impact on other welfare provisions. I believe the money can be found from our ample reserves and the parameters safely set up if our indubitably able Financial Secretary were to put his mind to it.

For the same reasons I have stated, neither am I able to support the amendments of the Honourable Fred LI and Honourable Frederick FUNG. Both proposals impact seriously on the existing Comprehensive Social Security Assistance Scheme and have as yet unexplored long-term implications. The only advantage, which I admit is a very attractive one, is that they can be implemented without undue delay.

Mr President, a burning need cannot be warded off with deliberations on fine points. I would urge the Administration to look for and find the most appropriate immediate relief. If a satisfactory proposal does not come up soon, then I believe more and more people, myself included, will become more inclined to support one or the other of the proposals today.

MR YUM SIN-LING (in Cantonese): Mr President, the original motion says that the current Comprehensive Social Security Assistance (CSSA) Scheme is unable to relieve the pressing needs of the unemployed workers. However, in the document on the new scheme distributed by the Honourable Miss CHAN Yuen-han, it is stated that the unemployed workers can only apply for this Unemployment Assistance after they have been unemployed for one month, and they can only obtain the payment after they have been unemployed for two months. I do not think that the process of this new scheme is much faster than the CSSA Scheme. In fact in a small number of CSSA cases, it only took a little more than one month for the unemployed workers to obtain the payment. So it is not a matter of whether the two schemes can provide immediate relief to the unemployed workers, nor can we say that the establishment of the new Unemployment Assistance Scheme will enable the unemployed workers to obtain assistance more quickly. Such being the case, a better approach would be to improve the guidelines for the CSSA Scheme to enable a more efficient assessment process and payment of assistance to the unemployed who are in need.

In regard to the unemployed who are in need, the Honourable Frederick FUNG has specifically deleted the words "and to provide those unemployed persons who are in need of assistance with an amount". I can hardly agree as there are indeed some unemployed persons who do not need any assistance. What is more reasonable about the CSSA Scheme is that it takes into consideration the family background of the applicants before providing other kinds of assistance. Some people may query, "Is it unfair when some people obtain assistance while some people do not?" But if we disregard the different levels of income of different persons before they become unemployed and provide them all with an equal amount at one-third of the median wage rate, this can also be regarded as another kind of unfairness. Besides, from the point of administrative costs, the incorporation of unemployment assistance into the CSSA Scheme can save administrative costs.

Also, I would like to point out that in Canada, for example, unemployment assistance is based on the unemployment insurance paid by the employees during their employment period. In the United States, a person can only obtain unemployment assistance if the income he received within the year prior to his being laid off reached a certain level. There are of course other kinds of assistance offered for the unemployed. If we are going to incur more administrative costs to separately deal with unemployment assistance, we should conduct a more detailed study on the subject and formulate an unemployment assistance scheme which is suitable to the environment of Hong Kong, that is, it should be compatible with the local taxation system and other social welfare benefits. Otherwise, it will not function so well as the CSSA, which can take account of other kinds of welfare benefits. Moreover, when there is a need to change the computation method for any payment adjustment in the future, the CSSA will take into account other items and any increase in the Consumer Price Index. However, the independent unemployment assistance scheme is only pegged to the median wage rate. This will restrict the computation method for any payment adjustment in the future.

Mr President, with these remarks, I support the amendment moved by the Honourable Fred LI of the Democratic Party. Thank you.

MR CHEUNG MAN-KWONG (in Cantonese): Mr President, there is in fact only one focus in today's debate, and that is to render assistance to the unemployed people. The Democratic Party, the Democratic Alliance for the Betterment of Hong Kong (DAB), the Hong Kong Federation of Trade Unions (FTU) and the Hong Kong Confederation of Trade Unions (CTU) are in unison on this issue. The crux of the issue lies in the method only. So let us look at the Unemployment Assistance Scheme proposed by the mover, the Honourable Miss CHAN Yuen-han. After careful scrutiny, we feel that we must highlight some points that we have discovered.

First of all, only her slogan, instead of a proposal, is seen so far. Her slogan about the Unemployment Assistance Scheme was put forth long before she was elected Legislative Councillor. Her slogan has been chanted for three months and her motion has been mentioned for a whole month. Unfortunately, although we tried very hard to study her proposal, we could not find any mention in her proposal about the applicant's eligibility, ceiling of assets, entitlement period and its relationship with the Comprehensive Social Security Assistance (CSSA) Scheme. As a result, quite a number of Members who would like to take part in the debate find that there is nothing which they can based on to consider or respond to the proposal. When Miss CHAN Yuen-han's motion of Unemployment Assistance Scheme was initially proposed, it was almost an empty motion and a mere slogan. This has created a lot of difficulties for Members to discuss the issue. I feel this is an irresponsible act.

Secondly, I would like to point out that the content of her motion changes all the time and the proposed assistance level also keeps on increasing. In order to get a clear picture of her proposed Unemployment Assistance Scheme, I have tried to ask for more information from the DAB through my assistant during the past few days. The process has been laborious. Our Democratic Party's Research Unit wrote to Miss CHAN on 13 November a copy of the letter has been retained and asked for information about her proposal and further details. Yet we did not receive any reply. Two days ago, we called her assistant and asked about the details of Miss CHAN's proposal again. But her assistant told us that they did not have any written statement on their stand. What they had were some basic principles: the assistance level should be one third of the median income, the ceiling assets is $66,000, the entitlement period is six months, and the applicant should have employment in the previous year. Worried that there might be changes, we telephoned again to confirm yesterday. To be fair to them, we also faxed our proposal to her assistant who promised that if there was any change, we would be immediately informed. But at 5 pm today, I was surprised to find a revised version of her proposal placed in front of me. To my surprise, the assistance level is raised to $3,000 and the ceiling of assets is also increased overnight by $50,000 to $116,000, while the application procedure is somehow the same as the one proposed by us, which is based on the CSSA Scheme. An empty proposal became yesterday's old-version proposal which is then transformed to become the new version put forth today. This gives us an impression that the plan is worked out rashly and is shallow. Once again, it shows that the Member concerned is irresponsible. How are the other Members going to take part in the debate and respond to it? We were not provided with this avalanche of figures until today. Should a serious debate in this Council be so arranged? Mr President and Honourable colleagues, we should bear in mind that once this motion is carried, it will have a great bearing on the taxes affecting millions of Hong Kong people and on various financial commitments, although the Democratic Party also agrees to these commitments. Also, there are other questions such as: how do the unemployed people obtain the assistance and what would be the amount? It is surprising for us to see that a Legislative Councillor from a responsible political party has changed her proposal on unemployment assistance time and again in the course of moving her motion. Sometimes, this makes me feel that this motion debate is imprudent and ill-considered. Our confidence in the mover and even her organization ─ the FTU or DAB ─ is thus undermined.

Mr President, for Miss CHAN Yuen-han's proposal, not only its submission process reflects a lax attitude, but the calculation of the figures is also a crude one. I must point out here that there are two different criteria for calculating the ceiling of assets and the assistance level. The basis for computing the ceiling of assets is the average wage, which is $9,700, while the assistance level is based on the median wage, which is $8,600. Actually, these are two different figures. How can the other Members, in such a hurry, verify these figures and respond, not to mention support the motion? I am quite at a loss. Besides, even if the assistance level is based on one third of the median wage $8,600, there is still the problem of miscalculation in her proposal because one third of $8,600 should be $2,866. The proposed figure, however, is rounded up to "about" $3,000 without any ground. For a serious proposal, every calculation should be very clear, as it should entail a formula requiring this Council's approval for allocation. It is strange that the word "about" is added there to boost the figure to $3,000. Is this some sort of bargaining in the market? I feel that we are now in the marketplace instead of debating in the Legislative Council. This further dampens my confidence.

The more serious drawback of Miss CHAN Yuen-han's proposal, as many people have pointed out, is that it is time-consuming and overlapping in structure. Our precious time will be wasted over and over again during the process from legislation to the establishment of the relevant agency, recruitment of personnel and the final assessment. She has indicated that it is an urgent need which is as pressing as a fire singeing one's eyebrows. If the fire is singeing one's eyebrows and one has to wait for a year or so to make these arrangements, the fire will spread to one's hair and even the whole body. By that time, how can the difficulty of the unemployed workers be relieved? I am really puzzled. Given this situation, I urge her to support the system proposed by the Democratic Party because it is the quickest, the most expeditious and will benefit the workers immediately. Further, it is simpler and more reasonable.

Mr President, these are my remarks.

MR LEE KAI-MING (in Cantonese): Mr President, my speech will be very brief. I support the original motion moved by the Honourable Miss CHAN Yuen-han primarily because it aims at setting up an unemployment assistance scheme to provide temporary assistance for the unemployed. In fact, we can see that people who are out of work would feel greatly troubled by the idea that they have to apply for public assistance. They would think that public assistance is a kind of relief for the poor. The setting up of a temporary unemployment assistance scheme, therefore, would allow them time to become psychologically prepared. And after they have obtained unemployment assistance for some time but still cannot find a job, they can then apply for public assistance. That would be psychologically more acceptable to them.

Furthermore, it is an obligation of the society to offer assistance to those who are out of work involuntarily. Even Covenants No. 44 and No. 102 of the International Labour Organization have specified that relief should be offered to the unemployed. These two Covenants have been implemented in the United Kingdom, though there are reservations for Hong Kong.

Finally, concerning the figures proposed by Miss CHAN Yuen-han, the Honourable CHEUNG Man-kwong said that her calculation was not precise. However, her basic principle is that the rate of assistance should be fixed at one-third of the median income. This figure is to me acceptable.

I so submit in support of the original motion.

MR AMBROSE LAU (in Cantonese): Mr President, the economic development of Hong Kong is now at a crossroads. Not only our business sector and the labour sector but also the whole international business community are watching. Should the unemployment problem now Hong Kong is facing be solved with fundamental measures that generate long-term as well as immediate effects? Or should we implement piecemeal, stopgap measures such as the Unemployment Assistance Scheme and then turn a blind eye to the need of stimulating production and improving Hong Kong's investment environment? If the former route is chosen, our economy will be able to tide over the difficulties and continue to develop on a healthy scale. If we adopt a negative attitude and choose the latter route, then our economy will be reduced to a plight with our fiscal reserves decreasing and the investment environment deteriorating.

Mr President, the reason why I have to point out at the outset that the Hong Kong economy is at a crossroads is to urge Honourable colleagues in this Council to debate on the setting up of the Unemployment Assistance Scheme with broad and prudent views. The upward trend of unemployment now Hong Kong is facing and the hard times now experienced by the unemployed workers are really a problem that should not be stalled or ignored. We must, first of all, find out the source of this serious unemployment problem before we can work out measures that will produce long-term as well as immediate effects.

The current unemployment problem is the inevitable consequence of serious mistakes made by the Government when formulating its economic development strategy. Over the past few years, the average inflation rate experienced by western industrial countries has remained at 2.5% while the inflation rates of the other three Little Dragons in Asia have been 3% to 5%. However, the inflation rate of Hong Kong has reached as high as 9%. The increase in costs has led to an exodus of the manufacturing industry. In the past 10 years, more than 300 000 workers were eliminated from this rapidly declining industry. Although 40 000 posts had been created in the service industry during the same period, yet in recent years, we saw 20 000 returned emigrants and 50 000 new immigrants from mainland China every year. These people also need jobs and as a result, the service industry is unable to take on any more workers.

Mr President, if this perpetual upward trend of unemployment cannot be resolved, the Unemployment Assistance Scheme will probably become a long-term system. In western countries, their social security system is in line with their high tax system. In Hong Kong, however, we enjoy low tax rates. Where the tax revenue does not increase and the Unemployment Assistance Scheme becomes a long-term system, how can the unemployed people survive once our fiscal reserves are depleted?

In my opinion, the Government is obliged to lend a helping hand to those unemployed people who are in need. Yet the proposed Unemployment Assistance Scheme should only be a contingency measure instead of a long-term system. In the long run, the Government, while trying to maintain low tax rates, should vigorously curb inflation and adopt policies which support and are favourable to economic transformation. Further, it should nurture a manufacturing industry which is competitive and a novel kind of service industry.

Mr President, I agree that we should assist those unemployed people who are in need. But the Honourable Fred LI's motion of "relaxing the ceiling of disposable assets" and the Honourable Frederick FUNG's motion of "granting CSSA payment which should not be lower than one third of the median income of Hong Kong employees to people who have been unemployed for more than three months" are not sensible ways of spending the public money to effectively assist those unemployed workers in need. I therefore suggest that the Government should quickly consider ways to assist those unemployed people who are in need. These ways should help them tide over the difficulties and yet should not affect their eagerness to look for a new job.

Mr President, these are my remarks.

　 MR LEE CHEUK-YAN (in Cantonese): Mr President, at present, not only has the unemployment rate in Hong Kong risen to its highest in 10 years, but the span of unemployment has also become increasingly longer. Basically, since April this year, the unemployment rate announced by the Government has become increasingly higher and people have felt more and more strongly the threat of unemployment. In the past, employees at the intermediate level had more stable jobs and they might think that unemployment assistance was not necessary. As the chance of unemployment for them was slim, they therefore thought it not necessary to establish an unemployment assistance system. However, the society has changed. The economic structure is unstable and is transforming all the time; industries are moving north and many big organizations are laying off their employees. People used to think that if one works in a big organization, one will enjoy a very stable life. But suddenly, the Hong Kong Telecommunications Limited, for example, has rendered 1 000 employees redundant and others are also to be displaced naturally. That shows that big organizations are gradually "streamlining" themselves. With the advent of new technology, manpower will certainly be gradually eliminated. That is what we have been worrying about and we believe it will become a fact. The unemployment problem will be one which the community of Hong Kong will not be able to do away with for quite a long time and therefore it is very important to discuss the question of unemployment assistance today.

However, just now when I listened to Members' speeches, I felt very confused. I believe the public would feel even more confused. The Democratic Party has commented that distant water could not put out a fire close at hand and therefore the Comprehensive Social Security Assistance Scheme should be managed well. The Honourable CHEUNG Man-kwong has criticized the unemployment assistance plan proposed by the Hong Kong Federation of Trade Unions from a technical point of view. The Hong Kong Association for Democracy and People's Livelihood (ADPL) has proposed an amendment of three to six months. But I would like to ask the Democratic Party, the ADPL, the Hong Kong Federation of Trade Unions and the Hong Kong Confederation of Trade Unions, to which I belong, a question. Since we are all closer to the grassroots, should we lend our support to an unemployment assistance system and stop struggling with one another as to which is the best plan? Just now I have listened very carefully to the speeches made by Members from the Democratic Party. Its only argument is that distant water cannot put out a fire close at hand. I would like to ask this question: what about a long-term system? We believe that a good unemployment assistance system cannot be set up properly within a short time; but I would like to ask, what kind of a long-term system are we seeking? If we agree that there should be an unemployment assistance system in the long run, should we have a satisfactory Comprehensive Social Security Assistance Scheme in the short run? I think we can discuss that; but I hope that after today, no matter what the voting results may be, we can sit together and discuss in detail whether we need an unemployment assistance system in the long run. If we think there is such a need, we can then work out a plan which everyone will accept.

Earlier on, I said I was very confused. I have involved myself in this confusing situation and have put forward a proposal of the Hong Kong Confederation of Trade Unions. However, that really is a long-term rather than short-term plan. This plan shows that we regard the concept of unemployment assistance as highly acceptable. But people may ask, how shall we obtain the funding? Where will the money come from? Let us look at the examples of many countries in the world. Actually they have implemented a contributory system, an insurance system for the community. The idea is like taking out an insurance policy. The method we suggest is for the Government to set aside some money to set up an unemployment insurance fund. What follows is just like the Old Age Pension Scheme, contributions will be made by both employers and employees. For instance, the employees will contribute 0.5% to 1% per month and the employers will contribute 1% to 2% per month. We can discuss about these figures later, but I think this level of contribution will be sufficient. After one has made contributions for a year, one will be entitled to obtain compensation for involuntary unemployment amounting to 50% of one's median wage for a maximum of six months. Also, during the unemployment period, the Labour Department should act as a co-ordinator and assist the unemployed to find a job. The unemployed should also report the progress of their job-seeking process to the Labour Department every month. If the Labour Department is committed to solving the unemployment problem and works hard to assist the unemployed in finding jobs, the Government should not need to pay too much from the unemployment insurance fund. It is believed that resistance to the unemployment insurance assistance system comes mainly from government officials and businessmen. The reasons put forward by the opposition are merely focusing on the following three points:

"nourishing laziness";
hampering the economy; and
people can help themselves with their own savings.

The accusation of "nourishing laziness" 　

This is a very harsh accusation because its basic presumption is that people are lazy by nature and they will refuse to work if they can obtain $3,000 or $4,000. That is a distorted portrayal of human nature and that is also an insult to the hardworking Hong Kong people. To the labourers who are accustomed to labour, the sufferings of unemployment entail not only the pressure of making ends meet, but also the pains of having nothing to do and the lowering of self-esteem. They will not forgo any chance to work for a few thousand dollars instead because they want to prove that they are leading a useful life. Certainly, there may be a few who will take advantage of loopholes in the law and will make every effort to use the weaknesses of the system to their advantage, but we cannot reject the system only because of a possible abuse by a small number of people. The majority of those who are unemployed as a result of economic restructuring wish to find jobs. It is only that there are not enough job opportunities in the society. How can we put the label of "laziness" on these people who are mainly victims of involuntary unemployment and refuse to provide them with assistance? Furthermore, we can design a mechanism which exhibits the following features:

only those who are laid off or are affected by the winding up of businesses can obtain assistance;
those who wish to obtain assistance have to register under the Job Matching Scheme of the Labour Department; and
those who have obtained assistance for six months should be subject to a review to see why they are still unemployed.

Will social welfare hamper the economy?

Actually, this plausible argument is put forward in order to oppose unemployment insurance and the system of assistance as a whole. We must notice that in many places, there is no direct correlation between the success of the economy and the condition of social welfare in those places. Many people have cited the case of Britain and said that the British economy has not performed well because of Britain's social welfare system. But we should not forget that Japan and Germany have better social welfare systems than Britain, yet their economies have also been very successful.

The idea of self-help by means of savings

This idea is to give a helping hand to the unemployed only after they have used up their savings. But can we actually allow them to keep a small amount of savings so that they may have a basic sense of security?

Due to the limit of time, I cannot present all my arguments. But I would reiterate lastly that what we want is a sense of security in maintaining our living and I would therefore support an unemployment assistance system.

MR CHAN WING-CHAN (in Cantonese): Mr President,

Unemployment a major social problem

Government cannot just stay aloof

We have to admit one fact and that is unemployment is not just a personal problem of individual unemployed workers, but an issue which concerns all the people of Hong Kong. Therefore, to face up to unemployment squarely, the Government should take emergency measures to assist the unemployed who are in need so that they will not be trapped in a helpless state of economic predicament.

We also have to admit another fact and that is the persistently high unemployment rate in Hong Kong. It is absolutely not a short-term variation. Nor does it betoken a mismatch of jobs. It is a long-standing problem and a structural one. In view of this long-standing unemployment problem, the Government must implement social policies to address the hardships faced by the unemployed.

If the Government still insists that it is unnecessary to take any measure to help unemployed workers to tide over their difficulties on the pretext that unemployment is merely a short-term and temporary problem, I will regard this government as an irresponsible government.

Unemployed workers living on their meagre savings

Prompting family tragedies one after another

I believe that Members will recall the case in which a family of three living in Nam Cheong Estate committed suicide because the husband and wife, who had both been unemployed for a long period, ran up debts amounted to tens of thousands of dollars.

A survey recently conducted by a workers' organization showed that unemployed workers have thought of killing themselves in times of long-term unemployment or when their meagre savings are used up. It is even more worrying to learn that some workers have frankly admitted that they would consider taking the risks to engage themselves in illegal activities. The wages of workers in Hong Kong, particularly low-income workers, have all along been suppressed. Even in the 1980s, when the economy of Hong Kong was markedly thriving, there was no increase in real terms in the wages of manufacturing workers and what is worse, negative growth was recorded. Their wages are only enough to cover the basic living expenses. Such being the case, how can they "store up grains in preparation for hunger"? Many cases have been brought to the attention of the Federation of Trade Unions where unemployed workers in the low-income group are indeed living in abject poverty. The traumas they face are heart-rending!

Mr President and honourable colleagues, I think some Members may sympathize with the plights of unemployed workers when hearing about their stories but some, I believe, may still be indifferent. It is natural that they have such reaction because they do not come from the grass-roots and they, therefore, cannot feel the distressful situation.

The bill that some people pay for a meal often equals the income and expenses of an unemployed worker's family for one whole month. The housing allowance drawn by some people, including government officials, is equivalent to the family income of an unemployed worker for six months or even one year. In this connection, it is only natural that you do not understand the difficulties of unemployed workers at all.

Yet, while such reaction is natural, it does not mean that it is "reasonable". That you do not feel the predicament of unemployed workers does not mean that they are not suffering it. Nor does it mean that they do not need immediate financial assistance. We, as Members of this Council, have to face up to the sufferings of the general public with a view to relieving the people of their difficulties. Only in so doing can we aptly describe ourselves as acting in the name of the people.

"Unemployment Assistance" serves as relief from hardships

Effectiveness is undeniable

I fully support the motion moved by the Honourable Miss CHAN Yuen-han.

Government officials and some Members of this Council have denied the effectiveness of Unemployment Assistance and are unduly worried about the Unemployment Assistance. In think their worries, which are uncalled for, only reflect that they are going against the interests of the grass-roots. I have two points to raise:

First, they are concerned that Hong Kong will follow the path of a "welfare state". My view is that the setting up of an Unemployment Assistance Scheme will not make Hong Kong a "western welfare state".

Statistics show that social security expenditures in the west account for a fairly large proportion of the Gross National Product, amounting to 21.8% in France; 13.1% in Britain and 10.6% in the United States. The social welfare expenditure in Hong Kong in 1992-93 only accounted for a mere 0.95% of the territory's Gross Domestic Product in 1992, a figure which indeed pales in comparison. In this connection, Hong Kong is a long way from being a western welfare state. Judging from the economic status of Hong Kong at present, there should not be any big problem even if our social welfare expenditure is increased by several times.

The problem now in Hong Kong is not excessive provision of welfare services, but inadequate welfare provision.

Secondly, they are concerned that the introduction of Unemployment Assistance will cripple the economy. We all know that the development of an economy can be affected by a wide range of factors, such as political environment, economic policies, military expenditure, business behaviour, consumption patterns of the people and so on. There is no direct causal relationship between unemployment security and economic development. In Japan and Germany, for instance, the social security expenditure is comparable to that in Britain and the United States and yet they have shown far better economic performances. Those who hold the one-sided opinion that the economy will be crippled by the introduction of Unemployment Assistance are actually "taking the consequence for the cause" and are losing sight of the reality of economic and social development.

All in all, my view is that the granting of Unemployment Assistance will not lead Hong Kong onto the path of a "welfare state".

MR CHAN KAM-LAM (in Cantonese): Mr President, I believe no one will deny that in Hong Kong, a 3.6% unemployment rate is alarming. In view of the present predicament, it is most important for the Hong Kong Government to, on the one hand, prescribe the right medicine to relieve the pressing need of unemployed workers and on the other hand, identify the real causes of the high unemployment rate in order to find a long-term solution to the problem.

Erroneous policies of the Government sowed the seeds of unemployment

Mr President, in my view, the past economic policies and human resources policies of the Government were erroneous in that the Government had persistently neglected the importance of manpower training and remained indifferent to the natural contraction of the manufacturing sector between the end of 1980s and the early 1990s. The Government has placed undue reliance on the service industry to absorb unemployed workers released from the manufacturing industry. As a result, the service industry has borne the brunt of the present economic slowdown and workers have lost the backing of the manufacturing industry which used to provide workers with stable employment opportunities. So the Government is actually the real culprit in bringing about today's high unemployment rate of 3.6%.

Increase Comprehensive Social Security Assistance (CSSA) payment to relieve pressing need

The Government must not just sit there watching the more than 100 000 unemployed workers. The Democratic Alliance for the Betterment of Hong Kong (DAB) is of the view that the existing CSSA system already provides financial assistance for the unemployed. Statistics of the Social Welfare Department showed that in the first 10 months of the year, there were as many as 7 800 cases where CSSA payment was granted on unemployment ground, which marked a significant increase of almost 100% when compared with the same period last year. This shows that the financial hardships faced by the unemployed have become increasingly serious.

In fact, as early as the middle of this year, the DAB already suggested a contingency proposal to address the financial hardships faced by the unemployed. Under this proposal, we suggested relaxing the asset ceiling imposed on unemployed workers applying for CSSA to a level of six times the median wage or equivalent or by making modifications on the basis of the asset restriction as applied to the normal old age allowance. At the same time, it was suggested that the standard CSSA rate should be raised to $2,500 per month. The Honourable Fred LI's amendment is, as a matter of fact, very similar to DAB's proposal at that time despite minor differences.

However, in view of the persistently high unemployment rate, the DAB thinks that the Government should actively consider further providing unemployed workers with short-term financial assistance by setting up an unemployment assistance system to provide persons who have been unemployed for over six months with financial assistance for a period of not more than six months. However, recipients of unemployment assistance must pass stringent assessments in respect of the level of assets. If a person has been unemployed for more than six consecutive months, he or she will be required to register under the Job Matching Programme run by the Labour Department. The unemployment assistance rate should be set at one third of the median wage.

Formulate long-term policies to provide employment opportunities

Mr President, the DAB thinks that unemployment assistance, by nature of its limited amount, can only provide a temporary relief for the unemployed. In the meantime, we also hope that the Government will review this policy on a regular basis to ensure that resources of our society are used effectively. Over the long run, the Government must study ways to improve the competitiveness of Hong Kong to provide more employment opportunities.

I think the Government can consider granting appropriate tax concessions to employers by, for example, allowing employers to deduct from taxes an amount, being their expenses incurred in employees' wages multiplied by a certain factor, in an effort to encourage employers to take on workers laid off in severance cases or unemployed workers.

In fact, in times of economic development and structural charges, the neighbouring countries of Hong Kong had also encouraged the business sector to invest in the manufacturing industry by granting various tax concessions and subsidies to the manufacturing industry and so the business sector had been able to provide ample employment opportunities. Under the circumstance, the unemployment rate in those countries has been kept below 2% and the manufacturing industry can continue to play definite role in the economy. I believe it is worthwhile for the Government to draw on the experiences of these countries.

Address squarely the problem of new immigrants and evaluate the supply of labour

Meanwhile, as there are close to 50 000 new immigrants coming to Hong Kong each year, if we assume that one third of them will join the labour market of the territory, that will mean more than 10 000 people joining in every year to compete with local workers who have acquired only a low level of skills. Now, the Government must evaluate afresh as early as possible the supply of labour in Hong Kong in the next few years. It should try hard to improve the skills of local workers and explore new employment opportunities or else a high unemployment rate will persist and, the fact that the growth of workers being faster than the growth of job vacancies will invariably be the explanation given by the Government to account for the continuation of our unemployment problem.

With regard to retraining, the DAB hopes that the Employees Retraining Board (ERB) will direct its attention to the quality of its retraining programmes. Otherwise, while there is increased investment from the Government in the ERB, the resources being invested may not actually be of genuine help to workers to switch to work in other industries.

Mr President, the reasons for the high unemployment rate are manifold. Among other things, the Hong Kong Government has shown a persistent lack of long-term policies and so indeed, the Government cannot shirk its responsibilities now. However, the DAB cannot agree with any proposal which calls on the Government to generously dish out breakfasts, luncheons and dinners simply to rectify its past mistakes. Otherwise, when the transient ecstasies subside, not only will the problem remained unsolved, but there may also be consequences far beyond our imagination.

With these remarks, I support the motion of the Honourable Miss CHAN Yuen-han.

MR MICHAEL HO (in Cantonese): Mr President, the debate today is not about whether assistance should be given to the unemployed because most Members, I believe, would agree that there is such a need. What we are discussing now is actually which method and what kind of policy arrangement will help to alleviate the difficulties of the unemployed most speedily and effectively.

An effective plan of unemployment assistance should not only guarantee the unemployed with the provision of their basic necessities, but should also encourage them to get a new job.

Generally speaking, a plan to assist the unemployed should satisfy the following two principles. First, unemployment assistance should guarantee the unemployed and their families with the provision of their basic necessities. The proposal put forward by the Democratic Party has the family as the unit of reference. The unemployment assistance plan proposed by the Hong Kong Association for Democracy and People's Livelihood has the individuals in mind and does not aim at providing any kind of assistance for the family members of the unemployed. The Hong Kong Federation of Trade Unions (FTU) has amended their proposal several times and I am not sure whether their proposal in its present form has the family or the individual in mind. If we look at point number three of the proposal put forward by the Honourable Miss CHAN Yuen-han, it states that applicants should declare that the value of their assets does not exceed $116,000. That being the case, my understanding is that the proposal also has the individual and not the family in mind. According to the proposal of the Democratic Party, even though only the head of the family is unemployed, the income and value of assets of the other family members should also be taken into account. That is, we hope to increase the upper limit on the value of assets owned by the unemployed to $96,000, while the upper limit on the value of assets owned by the other family members can be specified. In this way, the upper limit on the value of total assets of the family can be indirectly increased. If the unemployed can prove that their family members have not given any assistance to maintain their living, they can apply for Comprehensive Social Security Assistance (CSSA) for single persons. I would like to point out that the present rate of CSSA for single persons, which is $1,200, should really be increased. Our proposal to increase the rate to $2,700 is more realistic.

The second principle is that unemployment assistance should serve the purpose of encouraging the applicants to re-enter the labour market. We have made this proposal because we hope that if the unemployed wish to renew their application after they have received CSSA payments for six months, they will be required to participate in the Employees Retraining Programme and the Job Matching Scheme.

Some critics think that if the rate of the CSSA for adults is increased, that would raise the question of whether the rates of the other categories of assistance should be increased at the same time. The established stance of the Democratic Party is that all the rates of the CSSA should be reformed according to the recommendations of Professor MacPHERSON's Report and that the rates should be increased to a reasonable level. For instance, the CSSA payment for an elderly living alone should be increased to $2,750 and the rate of assistance for single parents should be increased to $2,950.

Finally, I would like to point out that if an independent unemployment assistance fund is to be set up in Hong Kong, details of the policy and financial arrangements have to be discussed thoroughly. In many Western countries such as the United States and Britain, the unemployment assistance system is actually part of the social security system. It was written in my draft speech that the Hong Kong FTU had not explained in detail the funding arrangements they had in mind. This draft speech was actually written yesterday. Today when the parliamentary group of the Democratic Party was discussing the issue, our discussion was based on the information obtained from the Hong Kong FTU through the telephone yesterday. I shall not repeat what the Honourable CHEUNG Man-kwong has mentioned earlier, but I can tell you that when we discussed the issue today, we were still making comparisons with the proposed scheme of the Hong Kong FTU as of yesterday. When we discussed the issue today, we were still carefully discussing how we should present our views today and how to compare the two proposals. It was really a surprise to find this piece of paper on my desk some time after five o'clock. I have learned from the experience of an amendment of legislation last time that I must never leave my seat during a debate, as a piece of paper may be placed on my desk and the latest news may come out at any time. Originally, we intended to compare our proposed figure with the $66,000 upper limit on the value of assets, which we learned was proposed by the Hong Kong FTU yesterday. Our proposal should clearly have been better. To our surprise, amount has been raised today for people to see. Suddenly, at the eleventh hour, our advantage has been stifled.

Mr President, I would also like to respond to one point. In fact, if we are really going to provide unemployment assistance or unemployment allowance, why should we provide that for just six months? Why do we have to go back to the CSSA after six months? Assuming that the rate of CSSA remains unchanged, if we are to provide unemployment assistance for six months and then switch to the CSSA Scheme after this six-month period, the recipients' income will thus be reduced by half. If we agree that the unemployed need immediate assistance, why not support the proposal put forward by the Democratic Party? I hope Members will reconsider the matter. If we think that unemployment situation has already reached a stage which needs immediate attention, we hope that actions can be taken quickly. And the initiative that can be taken most speedily is to make adjustments on the basis of the current CSSA Scheme.

Mr President, these are my remarks.

MR CHENG YIU-TONG (in Cantonese): Mr President, during the last few decades, the economy of Hong Kong has been growing rapidly. However, the Hong Kong Government only attributes this success to the active non-interventionist economic policy that it has been pursuing for years and ignores that this is also the result of the efforts made by millions of Hong Kong people. Today, the economic restructuring of Hong Kong has forced hundreds of thousands of workers who have once contributed to our society out of the labour market into the plight of involuntary unemployment. Some of them are unable to maintain their living and have attempted to commit suicide. For many of those who could barely make their ends meet cannot even maintain their basic living now and their prospects are extremely deplorable. We can say that this is something brought to them by the Government's active non-interventionist policy. They really have the Government to thank. 　 In order to solve the unemployment problem, it is necessary to have a whole range of long-term measures to stimulate the economy so as to promote full employment. However, while this long-term strategy is being implemented, contingency measures should also be put in place to alleviate the seriousness of the problem. The most urgent task at the present moment is to extend a helping hand to the unemployed in order to assist them in tiding over the difficulties.

The large group of unemployed people all have the ability to work. Moderate financial support will help them re-enter the labour market so that they can continue to contribute to the economic development of Hong Kong. This is undoubtedly beneficial to both the individuals as well as the entire community.

The need to provide protection to the unemployed is an unquestionable fact. The question is just how to provide assistance. The Honourable Miss CHAN Yuen-han proposes the establishment of an independent Unemployment Assistance Scheme, while the Honourable Fred LI proposes to increase the Comprehensive Social Security Assistance (CSSA) payment for the unemployed. After comparing the concepts of these two proposals, I am totally in support of Miss CHAN Yuen-han's motion. It is because the setting up of an Unemployment Assistance Scheme at the present stage will indeed be more appropriate to the existing need and it is more in line with the practical situation of Hong Kong. In regard to the amendment of the Honourable Frederick FUNG, it is very similar in concept to Miss CHAN Yuen-han's proposal but only differs in some minor details. So I cannot see why I should oppose.

I am going to explain below why the setting up of an Unemployment Assistance will be more suitable to the present need:

The concept of Unemployment Assistance is different from that of the CSSA
The aim of the Unemployment Assistance Scheme is to provide financial assistance to the temporarily and involuntarily unemployed people in society. However, the assistance is not merely to help maintain their standard of living but, more importantly, to help them to find another job. To put it in simple terms, nowadays it costs $5 to buy a copy of newspaper and $10 for two copies. Assuming that one spends about $300 per month to look at the recruitment advertisements in the newspaper in addition to travelling and other expenses, one really has to spend a certain amount of money before one can get a job. The Unemployment Assistance is, through the payment of a cash allowance, to help the unemployed to set their mind at ease in actively looking for a job, to relieve them from the worries of their livelihood and to set up a safety net for them. In fact, it is just like a springboard for the unemployed to return to the labour market. To the Government, it is definitely an expenditure for greater returns.
The CSSA, on the other hand, is a protection of livelihood for those who cannot help themselves in our society. It is a kind of welfare relief for the long-term care of a group of people living in hardship. But the Unemployment Assistance is short-term, traditional, non-reliant, developmental and positive in its approach. It is obvious that the CSSA and the Unemployment Assistance are different in nature, in their concepts as well as their objectives. Thus, it is incomprehensible why those who are in involuntary short-term unemployment have to be incorporated under the CSSA Scheme.
Different nature of assistance
To a lot of unemployed people, the psychological pressure of obtaining the CSSA payment is very great, because the CSSA recipients have been labelled and misunderstood by the community as "parasites" in society. Although I totally disagree with this kind of remarks, the unemployed still feel some pressure in obtaining the CSSA. To the unemployed workers, unemployment has already brought to them a lot of mental distress. They will often find themselves useless and will completely lose their self-confidence. Coupled with the labelling that the CSSA recipients get from society, this will be an even greater blow to their self-respect. On the contrary, to help the unemployed under the name and the concept of Unemployment Assistance will not impede their dignity.
Meanwhile, assessment of applications for the CSSA has now used the family as a unit and the procedures are rather complicated. In order to be successful in the application for the CSSA, the family members must sign and testify that they are unable to provide financial assistance to the applicant. We have some union members who came to our union offices and complained that their sons refused their requests of signing in their application forms indicating the inability to support them. I can totally understand how their sons feel. It is very hard for a son to do this and he will feel extremely bad signing in his father's application form to testify that he cannot or has no ability to support his father. Only through such application procedure which almost requires a severance of family ties that a meagre amount of relief barely enough for subsistence can be obtained. But the applicant and his family members will as a result lose their dignified living. What is disappointing is that Members from the Democratic Party has seriously attacked Miss CHAN Yuen-han's Unemployment Assistance Scheme on its technicalities. But they dare not express their stance towards unemployment assistance. Do they really want to reject the Unemployment Assistance Scheme by unpholding the CSSA? Does the Democratic Party want these temporarily and involuntarily unemployed people to continue an undignified living under this CSSA system, which has already been fully attacked by the community at large?
As a matter of fact, unemployment protection is a kind of social security to which every member of our society should be entitled. If the Government can understand and accept the views of the grass-roots and immediately set up a well-conceived Unemployment Assistance Scheme, not only that the economic development of Hong Kong can be promoted, but the general morale can also be boosted.

Mr President, I so submit.

MR LEE WING-TAT (in Cantonese): Mr President, I will speak on the Honourable Miss CHAN Yuen-han's proposed Unemployment Assistance Scheme. As the Honourable CHEUNG Man-kwong has said, we only received the paper today. I have spent two hours and made some calculations. Basically I have found three big loopholes in this Scheme. First, the Scheme assumes that a worker is out of work and under this Scheme, the worker will probably receive only six months' emergency unemployment assistance in two years. Why? This is because according to this Scheme, after he has received the assistance for six months and he is still out of work, he will then have to apply for the Comprehensive Social Security Assistance (CSSA). Nevertheless, there is no mention in the proposal about raising the upper limit on the assets of the CSSA applicants. In other words, the upper limit is still maintained at the present level of some $20,000. This ceiling will exclude most of the unemployed workers from the safety net. According to the calculations based on Miss CHAN Yuen-han's proposal, an unemployed worker will receive a total of $17,202 in assistance in two years, or $716 per month on average. If the Government adopts the Democratic Party's proposal and raises the CSSA payment to $2,750 per month, then the total assistance obtained by an eligible unemployed worker in two years will be $66,000. I hope that Miss CHAN Yuen-han and our friends in the Hong Kong Federation of Trade Unions (FTU) will check whether the unemployment assistance that they suggest is really as much as they have imagined? The answer is no. In fact for some workers, six months later they will be penniless and their lives will be even tougher. Our suggestion, as compared to the two-year cycle proposal of the FTU, is actually 3.8 or even 4 times that of the unemployment assistance.

Secondly, concerning the eligibility, Miss CHAN Yuen-han has suggested that the recipients of the unemployment assistance have to register with the Labour Department to look for jobs. If a recipient turns down a job offer referred by the Labour Department three times without reasonable explanations, then his unemployment assistance will be suspended. However, since Miss CHAN has not given any explanation, it is very hard to determine what such eligibility is and it may even become a very stringent restriction as there is no definition on how it would be considered a refusal to a job referred by the Labour Department. If the pay of the job is very low - which often is the case with the jobs posted in the Labour Department - and he has to choose, he will be forced to choose a very low-pay job. And if he turns down an offer three times, he will lose the unemployment assistance. In fact, although this is certainly not Miss CHAN Yuen-han's subjective wish, objectively the unemployed workers will be forced to take a very low-pay job; otherwise, he will lose the unemployment assistance as well.

Thirdly, there is no mention of what is to be done after a worker has obtained the unemployment assistance for six months and he is still out of work but he is not eligible to apply for the CSSA. By that time, he will be left with nothing. How is he going to support himself? Does it mean that he will have to live off his past gains? All these questions have not been answered in the proposal.

Mr President, I feel that the debate today is not about how to help the unemployed. Many colleagues have pointed out the current social phenomenon in their speeches. I agree. But in many speeches, only empty slogans are chanted and people are not debating on substantial contents as regards which proposal is better, which one is worse, which one is faster, which one is slower, which one can keep the administrative procedures to the minimum, and which one can give the workers not only short-term but also long-term assistance. It is as though we are debating on a name to decide which one is the best. Of course, the name of Unemployment Assistance is very attractive. If a labour union leader rejects the name of Unemployment Assistance, that will be like committing political suicide. It would be like the democrats rejecting democracy, they are committing political suicide as well. But when we discuss this specific proposal, there have to be substantial contents for the public to discuss.

Mr President, another point I want to bring out is that when we debate on this kind of social welfare or social security system such as unemployment assistance, we have to consider many factors. The social security systems in many countries are contributory. But it seems that Miss CHAN Yuen-han has not mentioned this point in her proposal. Is it feasible over the long run? We have not debated and neither has there been any extensive debate in the society on that matter. Is it that we, the Democratic Party, do not want to debate on it? No. When Miss CHAN Yuen-han was campaigning for her election in August, she already put forward this idea. If after winning her seat in September, she immediately put this proposal forward, we would have a month's time to debate, and the unemployed workers, other employees and the business sector would also be able to debate calmly on what plan is the best. And today, there would be no need for that many questions. I am really at a loss as to what this proposal is. Up till now, I am still unable to piece together such a fragmented proposal to form a complete picture. Mr President, I have mixed feelings about this issue. As a leftist in the Democratic Party, sometimes I find it hard to oppose such slogans or proposals. But the trouble is that if we endorse an empty slogan or proposal, that will be unfair to everyone. Thank you, Mr President.

MR IP KWOK-HIM (in Cantonese): Mr President, the Government has recently announced the current employment situation. The figures show that the rate of underemployment has dropped slightly but the figure of unemployment has reached a new high over the past 11 years. The unemployment rate has risen to 3.6% and over 110 000 people have become unemployed. The current unemployment problem is not just troubling the grass-root level or the middle-aged. The age of the unemployed tends to decline. Right now, unemployment has also become a problem for the graduates of our tertiary institutions. According to the preliminary result of a survey conducted by the City University of Hong Kong on the employment situation among the graduates, about 10% of the graduates could not find a job within six months upon graduation. That is about 3% or 4% higher than the figures in similar surveys conducted in the past few years. Another survey also reveals that over a quarter of the employed youngsters aged between 18 and 35 are worried that they may lose their jobs subsequent to a possible layoff exercise by their companies in the coming year. When the economy is developing in a normal course, rarely will youngsters aged below 40 worry about the problem of unemployment. These figures reflect that the unemployment problem currently haunting Hong Kong not only is not improving, but is in fact worsening.

The Governor held the second Summit Meeting on Employment two weeks ago. Nevertheless, the result of the meeting mirrors again the fact that the Government is actually at its wits' end on this problem. Unemployment will seriously affect the emotion of a person, undermine his self-confidence and put his economic well-being in jeopardy. Unless the Government thinks that the unemployed and their families should obtain assistance only when they are on their bones, otherwise, the Government should set up an unemployment assistance scheme to relieve their immediate need so that they would not have to "live in hunger". The number of unemployed people applying for the Comprehensive Social Security Assistance (CSSA) from the Social Welfare Department soared from 5 000 in January this year to 7 800 in October, representing an increase of almost 56%. This signifies that there is a real need to offer financial assistance to the unemployed.

I have just heard the Democratic Party criticizing the Honourable Miss CHAN Yuen-han's proposed scheme. The Democratic Alliance for the Betterment of Hong Kong (DAB) holds that this proposed scheme is serious and has been carefully thought through. However, the scheme has been described as perfunctory and swaying all the time. The DAB finds this criticism totally unacceptable. In view of the escalating unemployment rate, I hope that the Democratic Party will support the comments and views of Miss CHAN Yuen-han regarding unemployment assistance scheme.

I so submit in support of the original motion and the amendment moved by the Honourable Frederick FUNG and in opposition to the amendment moved by the Honourable Fred LI.

MR WONG WAI-YIN (in Cantonese): Mr President, I just want to make a simple comparison between the proposal made by us, the Democratic Party, and the one made by the Democratic Alliance for the Betterment of Hong Kong or the Hong Kong Federation of Trade Unions to tackle with the current severe unemployment situation.

As the Honourable Miss CHAN Yuen-han has mentioned in her speech, it is necessary to relieve the "immediate need" of the unemployed. And it is exactly because we can see the "immediate need" of the unemployed that we hope to introduce new rules to help the unemployed. We hope to do so by using the simplest procedures, the most direct means and the least administrative measures or laws. That is why we are proposing to make use of the procedures and criteria for the application of assistance under the current Comprehensive Social Security Assistance (CSSA) Scheme. We are proposing to help the unemployed by relaxing the criteria and raising the amount of assistance. However, the emergency unemployment assistance proposed by Miss CHAN Yuen-han may be a new concept and a new measure, which may or may not require legislation. But in her proposal, a new fund will have to be set up and additional civil servants required to handle the payment of this assistance. So, it seems the Unemployment Assistance Scheme proposed by Miss CHAN may not actually serve the purpose of relieving the immediate need of the unemployed.

Secondly, for some workers who have been unemployed for a long time, their families naturally face considerable hardship. We of course very much hope that the assistance they get may minimize the impact on their livelihood when unemployment strikes. As quite a number of colleagues have pointed out just now, the latest figures in respect of the ceiling on disposable assets and the amount of assistance in Miss CHAN's proposal, which we received yesterday and at 5 pm today, exceeded those contained in Miss CHAN's earlier proposals. They also exceeded those which we, the Democratic Party, proposed. Let us deal with the issue of disposable assets first. Our proposed ceiling for this is $96,000, whereas that proposed by Miss CHAN now is $116,000. The two figures are similar. As already pointed out by the Honourable James TIEN at the beginning of his speech, the 110 000 unemployed workers have basically been included in the safety net for obtaining CSSA. I do not think their eligibility to the CSSA would be affected whether $96,000 or $116,000 is used in the calculation. What I would like to talk about now is the amount of assistance. Miss CHAN is proposing an amount of around $3,000. Our calculation indicates that the amount should be some $2,800. We suggest using the amount recommended in the MacPHERSON Report, plus an allowance for inflation, that means around $2,750. It appears that Miss CHAN's proposed amount is greater than our proposed amount. However, please remember that the CSSA represents a standard rate only. Rent allowance has not be included. That means those who receive the standard CSSA of $2,750 are in fact entitled to rent allowance, making the total allowance obtainable greater than the amount in Miss CHAN's proposal. Moreover, we are talking about long-term benefits, rather than an allowance that will cease after six months. This has already been pointed out by the Honourable LEE Wing-tat. Under Miss CHAN's proposal, the unemployed can only obtain the assistance for six months. Also, under her proposed Unemployment Assistance Scheme, the ceiling on disposable assets is $116,000. Nevertheless, she has not proposed to raise the ceiling when the unemployed workers apply for the CSSA after six months. If this ceiling of $26,650 is not raised, many of the unemployed may not be eligible to apply for the CSSA. That is to say, after six months, many of them would be unable to obtain either the CSSA or unemployment assistance. How are they going to support themselves? It seems this issue has remained unresolved.

Mr President, I would like to go on to talk about the lack of dignity for those living on the CSSA. The Honourable CHENG Yiu-tong has been saying that there is indeed a lack of dignity. In the past, I also criticized the meagre amount of CSSA payment which indeed fell short of giving any dignity to whoever living on it. But if we raise the total amount obtainable, it would come close to the amount of unemployment assistance proposed by Miss CHAN. Moreover, I have stressed that there is an additional sum in the form of rent allowance. In particular, I want to mention one point. Mr CHENG Yiu-tong said being put on emergency unemployment assistance seemed to sound better than being put on the CSSA. The former name seemed, he said, to accord more dignity. I really cannot understand this. As far as providing service to the community is concerned. Wherever necessary, the Government or the community should have a duty to help them out of their difficulty. Rather than arguing which assistance scheme has a better name, we should concentrate on letting them lead a more dignified life. Thank you, Mr President.

MR BRUCE LIU (in Cantonese): Mr President, the Honourable James TIEN of the Liberal Party, who is sitting right in front of me, just opposed the Unemployment Assistance Scheme on the grounds that a reasonable proposal, especially like the one proposed by the Honourable CHAN Yuen-han, though reasonable at the outset, would risk becoming unreasonable and turning into a heavy burden in future when new Members of the next of future sessions continue to add to it other arrangements. Therefore, this reasonable proposal must be nipped in the bud. If this argument is accepted, there will be no point in raising any reasonable proposal in this Council in future.

I think social policy should aim at tackling social problems. Therefore, the Hong Kong Association for Democracy and People's Livelihood (ADPL) is against the Honourable Fred LI's amendment because it is not directly addressing the problem.

Firstly, the Comprehensive Social Security Assistance (CSSA) has the implication of charity. In contrast, the Unemployment Assistance Scheme or the amendment proposed by the Honourable Frederick FUNG is a way to which we resort to help the unemployed tide over their difficulties.

Secondly, the CSSA is a long-term assistance. The eligible person or family for CSSA may need the relief provided by a long-term assistance. However, the Unemployment Assistance Scheme is a short-term emergency measure to assist the unemployed to look for jobs. 　 Thirdly, the CSSA is aimed at helping different target groups, including single person, family members, the elderly and disabled, but our proposed unemployment assistance is only aimed at providing assistance for the unemployed. In understand that many Members from the Democratic Party came from a social work background, and if they wish to use the CSSA as a quick fire-fighting measure, the present CSSA policy must be twisted for it to be effective. The idea is to exploit some "legal loopholes", for example, by the applicant making a declaration that other family members will not provide any financial assistance to him in order to be eligible for the CSSA. Such "legal loopholes" exploitation is not a preferable way to help solve the livelihood problem of the unemployed.

Mr President, the criticisms that the Honourable CHEUNG Man-kwong and the Honourable Michael HO levelled against Miss CHAN Yuen-han have gone over the line, prompting me to say a few words. They only raised some technical arrangement problems to negate the goal and the idea of an Unemployment Assistance Scheme, without answering the Honourable LEE Cheuk-yan's question. Does this Council support the concept of "unemployment assistance" and this new Scheme?

When I listened to the speeches of the Democratic Party in this Council today, I almost thought that they were drafted by the Liberal Party. If the Democratic Party considers the proposal of Miss CHAN Yuen-han to be unclear, why are there no criticisms from the Democratic Party on our proposal which has already been given to them for information a long time ago? Our proposal is both specific and practical, and can also answer the queries of the Democratic Party on technical arrangement. The answer to my question is that deep down in their hearts they actually do not support the concept of "unemployment assistance" and this new scheme.

I hope the Members from the Democratic Party would truly support this new "unemployment assistance" scheme. Therefore, if the amendment of Mr Fred LI is later negatived, I said "if", then I hope the Democratic Party will hold an emergency meeting to lend its support to the original motion of Miss CHAN Yuen-han or the amendment of Mr Frederick FUNG.

These are my remarks.

MR ALBERT CHAN (in Cantonese): Mr President, I did not intend to speak at first. But after listening to the Honourable Bruce LIU's speech, I cannot help it. It surprises me that the Hong Kong Association for Democracy and People's Livelihood (ADPL), as a self-proclaimed organization to represent the grass-roots and which will establish itself as a political party, has actually said that the Comprehensive Social Security Assistance (CSSA) is in nature a relief to people but the unemployment assistance as proposed by the ADPL is not. Such a statement is an insult to the dignity of the people currently receiving the CSSA and a degradation of their existence or of them as human beings. He treats them as some pathetic people who need to receive the CSSA and he means to give them alms. If there are still Members from the ADPL who are yet to speak, I hope they can confirm later on whether or not what Mr Bruce LIU has said represents the ADPL's stand? If it is, then I hope that the ADPL will convene an emergency parliamentary group meeting later on and make a public statement to apologize to the CSSA recipients.

I am not the Democratic Party's spokesman on this very policy. However, in our parliamentary group meeting today to discuss the proposals of different parties, we felt that the proposal put forth by the ADPL was not worth our criticism. Therefore, none of our many spokesmen has spoken much on the so-called establishment of an unemployment assistance fund put forth by the ADPL. However, as Mr Bruce LIU has requested, I shall try to point out what is wrong with the ADPL's proposal based on my personal understanding and hope that they can make a self-examination.

In a nutshell, they are proposing to set up another sizeable government department, and that will incur tremendous financial expenditures. In fact, they "look good in posture but not in reality". The posture is that they appear to be looking after the unemployed, but the content is even more conservative than what is proposed by the Hong Kong Federation of Trade Unions (HKFTU), and the assistance to be offered to the unemployed is even less. For these reasons, it is difficult to support an alternative that is not as "speedy, good and desirable" as the Democratic Party's proposal to help the unemployed. I hope that when Members discuss these policies they will not just shout empty slogans. It is not like the political atmosphere in the sixties now and shouting slogans is meaningless. We have to look at the actual circumstances and the specific policies and, above all, we have to find out what actual impacts will there be on the beneficiaries of any particular policy, and I think this is the most important thing. Just now when those Members from the DAB spoke, they did not respond to the criticisms the Democratic Party passed upon them. As to the difference in policy, what is the difference between the Democratic Party and the DAB or the HKFTU? Neither did they respond to this. We hereby invite the Honourable Miss CHAN Yuen-han to respond to the questions of whether it is the most direct and the speediest means and is offering the largest amount of assistance when she replies later on. Thank you, Mr President.

SECRETARY FOR EDUCATION AND MANPOWER (in Cantonese): Mr President, I should like first of all to assure this Council that the Government is concerned about the recent rise in unemployment rate and fully appreciates the difficulties which people face when they are unemployed. We need to do everything we can to help them to re-enter the workforce. This is the assistance which the unemployed need most. And this is a mission which the Government is committed to.

The latest employment situation

Some Members have pointed out that our current unemployment rate of 3.6% has hit the highest point in the past 11 years. That is true. But let us not forget that our economic fundamentals remain strong, with an annual growth rate of 5% and a continued notable increase in total employment. The unemployment situation is not reflective of any particular long-term fundamental weakness in our economy. It is rather a product of two major phenomena uniquely characteristic of Hong Kong's labour market and economy. First of all, the labour force has outgrown the number of employed workers. Second, there is a "mismatch" in the form of the co-existence of a considerable number of both the unemployed and job vacancies in the labour market. The Government had explained this point on various occasions before and I do not intend to repeat it here.

Stepping up employment service

However, we recognize the need to provide assistance to those affected by the recent sluggish employment market. Since the beginning of this year, we have made it our top priority to help the unemployed to get work. I believe that this is what they want more than any thing else. We have therefore strengthened our employment service to job seekers.

The Labour Department provides a free placement service to help employers recruit staff and to assist job seekers in finding suitable employment. During the period from June to October 1995, the Local Employment Service of the Labour Department as a whole has placed 10 978 job seekers in employment as against 7 620 for the same period last year, representing an increase of more than 44%.

An important initiative in our employment service is the Job Matching Programme (JMP), which started as a pilot project in April this year. The JMP, an enhanced job placement service for unemployed workers aged 30 and above, is now available at all nine offices of the Local Employment Service of the Labour Department. It is a service which I would commend to both employers and the unemployed. The JMP is a much more focused service as it involves the provision of in-depth interviews and counselling to identify suitable jobs for placement of job seekers. Where there are training needs, arrangements are made for the registrants to attend tailor-made retraining courses as appropriate.

Since the start of this programme, 4 536 job seekers have been registered and 2 936 have been given job offers, representing a success rate of 65%. To further enhance the effectiveness of the service, we intend to computerize the JMP. We have already earmarked resources for this. I am confident that with computerization, we will manage to do even better.

We have also spared no efforts in approaching employers for information on their vacancies, as well as organizing job bazaars, seminars and briefings to facilitate placements. We have also been advising employers to set realistic job requirements in recruiting staff. These endeavours have started to bear fruit, as some major employers are now willing and have taken on workers who would have been excluded under their previous recruitment criteria. We will continue to drive the message home that all artificial barriers to employment should be removed.

Employees Retraining

Some Members made reference to the Employees Retraining Scheme. Let me stress again that the Scheme was set up primarily to provide suitable retraining courses to equip workers, especially those who have been displaced by the economic transformation with the requisite skills to change career successfully. The Employees Retraining Board (ERB) provides classroom training and on-the-job training programmes through its network of 52 training bodies. At present, there are 162 courses to choose from, ranging from job search skills, job-specific skills, general skills and skills upgrading. As the ERB's training programmes are very popular, it is necessary to ensure that the unemployed do not have to wait too long to get into a retraining programme. Quite rightly, priority is given to those who are out of jobs to attend ERB courses. All they need to do is to walk in and to register for a course. 　 The ERB was established in 1992 and has continuously reviewed its training courses. New courses have been added while less popular courses have been dropped. We need to take stock of our activities to ensure that the programme are effective in helping our workers to upgrade their skills or to gain new skills. We are working closely with the ERB to commission a consultancy study to review the direction, strategy and management structure of the Scheme.

Vocational Training Council

Apart from retraining, we consider it equally important that we provide a system of technical education and industrial training best suited to Hong Kong's ever-changing needs. The Vocational Training Council (VTC) has been making valuable contributions in this area. We will take the opportunity of reviewing the Employees Retraining Scheme to also commission a consultancy to undertake a review of the VTC's programme of activities. Both this and the ERB study will be completed early next year. The structure will provide useful information and recommendation to enable the Government in the formulation of manpower development policies for the next 5 or 10 years.

Benefits to the unemployed

Finally, I would like to turn to the rights and benefits which are available to workers under the Employment Ordinance. These entitlements are important particularly to workers facing financial insecurity. These benefits include wages in lieu of notice, severance and long service payments. Normally, one month's salary are paid in lieu of notice. Severance payment is payable to workers who have two years' service and are made redundant. Those who have five years' service and are dismissed for reasons other than redundancy are entitled to long service payments. Both severance payment and long service payment are paid at the rate of two-thirds of the monthly wages for each year of service. Employees who are owed wages, wages in lieu of notice and severance payment by their insolvent employers may also apply for ex-gratia payment from the Protection of Wages on Insolvency Fund. All these provisions have evolved through a long series of improvements over the past years. They are regularly reviewed in consultation with the Labour Advisory Board to ensure that they are in the best interests of both employers and employees.

Conclusion

Mr President, the Government does not support the idea of an Unemployment Assistance Fund. As I said earlier, it is work which our people want. We should focus our energy in helping the unemployed to get back into the workforce as quickly as possible. For those unemployed who are in financial difficulties, the Government provides assistance through the Comprehensive Social Security Assistance Scheme, which the Secretary for Health and Welfare will speak on. Thank you, Mr President.

SECRETARY FOR HEALTH AND WELFARE: Mr President, we have the greatest sympathy for the hardship and trauma faced by the unemployed, many of whom may be facing unemployment for the first time in their working lives.

I think we know what these people want and it is not a cash hand-out. They want jobs, and it has just been explained by my colleague, the Secretary for Education and Manpower. That is precisely what we are trying to provide. However, we also need to look after those in need. At the end of the day, if new employment were not found, our safety net is firm and remains in place. The Comprehensive Social Security Assistance (CSSA) will always provide the ultimate support to meet basic needs, and indeed we have recently proposed significant increases in CSSA payments to adults including those who are unemployed.

Mr President, the motion and the amendments proposed to it all refer to a failure of the current CSSA Scheme to relieve the immediate financial needs of the unemployed. Failure implies the Scheme is not doing something it was supposed to do. But the CSSA Scheme was not designed to meet the immediate needs of the unemployed regardless of their financial means. Unemployed persons can and do receive CSSA payments, but they do so only if their income is unable to meet their recognized needs and if the value of their assets does not exceed the permitted limit.

I have explained many times before in this Council, but it bears repeating again today, that the CSSA provides no more than a safety net for those unable to support themselves financially for whatever reason, whether it be old age, disability, illness or indeed unemployment. The Honourable Fred LI suggested in his speech that we should simplify the current procedures for processing CSSA applications by unemployed persons so that assistance could be given more speedily. We agree with this suggestion and are urgently examining our procedures. Nevertheless I can assure the Honourable Member that for those in genuine financial need CSSA can be provided very quickly, sometimes within one or two days of application.

The level of payments in the CSSA scheme are set to cover all 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 educational expenses of children and other specific needs of an individual or his or her family. Medical treatment for recipients at public clinics and hospitals is free. On average, a family of four now receives $8,610 per month and a single person receives $2,650 which is, as a matter of interest, about 30% of the median wage.

The Unemployment Assistance Scheme proposed in the motion seeks to provide unemployed persons who are in need of assistance with a certain level of income. The motion does not suggest how it is to be judged, whether such person are in need of assistance. But the Honourable Miss CHAN Yuen-han has suggested today in her speech that an unemployed person should be eligible for assistance only if he or she has savings below $116,000. We must ask ourselves whether it is reasonable to ask taxpayers to provide financial support to a person who may have $116,000 in savings, bearing in mind that some of those taxpayers in lower-paid jobs may not even have such a high level of savings themselves. In addition to that $116,000 of savings the person concerned may also have a spouse or other relatives living with him who may have even higher value assets and savings. This, I understand, would be disregarded since the proposed savings limit would be assessed on an individual rather than on a family basis. It should be noted that in the CSSA Scheme the asset limit is applied on a family unit basis.

Another question this proposal prompts is why an unemployed person should be allowed to keep such a level of assets and yet receive public financial assistance in the form of unemployment assistance payments, whereas the old, the disabled and the young are allowed to retain only a lower level of assets before becoming eligible to receive public assistance in the form of CSSA Scheme payments?

On the other hand, the Honourable Frederick FUNG's amendment seeks to delete the test of giving unemployment assistance only to those who are in need, and imposes a time limit for the period during which assistance payments can be made. Under this proposal, an unemployed person could receive assistance regardless of the level of savings he may have and regardless of his actual needs. If such a person had savings it seems reasonable to me to expect part of those savings to be used to meet his daily needs before expecting others in the community, who may well be less well off, to provide him with an income through the taxes they pay. It is also not clear what the position would be if the person remained unemployed after having received assistance for six months.

Of course some countries do have unemployment benefit schemes, but these are in almost all cases schemes to which employers and/or employees contribute over time. Our CSSA Scheme is a non-contributory welfare payment system. As I have said before, it should not be hi-jacked to perform a role that it was never intended to play. The Honourable Fred LI's amendment would mean breaking with the central philosophy of the CSSA Scheme by providing a payment at a level raised artificially higher than that needed to address basic needs. A standard rate of $2,750 for an unemployed adult would also be higher than that now provided for the elderly, for children and for people with a disability. This could only be justified in terms of the CSSA Scheme policy, if we were satisfied that the real needs of the unemployed were that much greater than the needs of these other vulnerable groups. I am not satisfied that such a case can be made, nor do I believe that the CSSA Scheme is the right vehicle to use to address a perceived need for unemployment benefits.

In his speech today, the Honourable Fred LI has clarified that his proposed CSSA rate for unemployed adults is based on the recommendations made in Professor MacPHERSON's report of June 1994. I recently explained to this Council on 2 November why we cannot accept the recommendations in that report, which is based on a different philosophy. In short, we believe the CSSA should seek to meet basic needs only rather than seek to maintain a certain lifestyle. Among other things, our current review of the CSSA Scheme is examining the level of assets a person should be able to hold while being eligible for CCSA payments. I note the recommendation made by the Honourable Fred LI that this asset limit should be raised to $96,000 per person. While not wishing to pre-empt the outcome of the current review, this would appear to be high for a single person. But it is not that much higher than the current CSSA asset limit of $71,000 which would apply to an unemployed person living in a family unit of four persons.

Since we have no statistics on the level of assets generally held in Hong Kong, the impact of any major relaxation of this eligibility criteria is particularly difficult to assess in financial terms, but any major relaxation could obviously expand considerably the numbers of people becoming eligible. All the recommendations arising from the CSSA review, including that on the asset limits, will be set out for Members early next year with all the background information to support a fully-informed debate on them.

Mr President, the Administration therefore urges Members to think very carefully before supporting the motion or either of the two proposed amendments. There is no justification for an Unemployment Assistance Scheme nor for massive increases in the level of CSSA payments. Thank you.

PRESIDENT: As I said at the beginning of this debate, two Members, Mr Fred LI and Mr Frederick FUNG, have submitted separate amendments to this motion and their amendments have just been debated together with the motion. I now call upon Mr Fred LI to formally move his amendment first so that Members may take a vote on it.

MR FRED LI's amendment to MISS CHAN YUEN-HAN's motion:

"To insert "(CSSA)" before "Scheme"; to delete all the words after "this Council urges the Government to" and substitute with the following:

"immediately increase the standard rates of CSSA to $2,750 for the unemployed as well as to relax the limit of disposable assets under the Scheme so as to benefit more unemployed persons".

MR FRED LI (in Cantonese): Mr President, I move that Miss CHAN's motion be amended as set out under my name on the Order Paper.

Question on Mr Fred LI's amendment proposed.

PRESIDENT: Miss CHAN Yuen-han, do you wish to speak? You have a total of five minutes to speak to the two amendments.

MISS CHAN YUEN-HAN (in Cantonese): Mr President, in regard to the two amendments, as I am working in the same direction as the Honourable Frederick FUNG, I will support him. But as to the Honourable Fred LI's amendment, I have a few comments. The speeches delivered by some colleagues from the Democratic Party just now have really taken me by surprise. I thought that I was confronting some government officials and stubborn capitalists. I am not referring to the Liberal Party but am only talking about some stubborn capitalists. From their speeches, I feel that they have not pointed out the crux of the problem. Are they in support of the Unemployment Assistance Scheme? This has not been mentioned. There are instead remarks like "The scheme is only available today", "There have been some changes in these few days", and "You said such and such things before March". These sound like the response that we used to receive from the government officials or some stubborn businessmen when our party and the Democratic Party held negotiations with them. That is how I feel. I am also very disappointed.

The Democratic Party has all along indicated that with regard to people's livelihood, it shares the same stance with our Federation of Trade Unions (FTU), the Democratic Alliance for the Betterment of Hong Kong (DAB), the Hong Kong Association for Democracy and People's Livelihood or the workers on the street. But it really makes me extremely disappointed today. To put it in one extreme, in this Chamber today, I think the government officials are the ones who are sitting most comfortably, as I have been observing the Secretaries and find them feeling rather at ease.

Mr President, as a matter of general direction, if the Democratic Party recognizes that the unemployed workers are now in difficulty, I very much hope that they will put aside their prejudices, get away from the technicalities, and then ask and think whether they are in support of an emergency assistance for the currently unemployed workers. If they are not satisfied with the specific content of the scheme, they can move a new motion and we can debate on this subject on 6 December. The Honourable CHENG Yiu-tong has originally planned to move a motion concerning "the legislation giving local workers priority of employment" on that day, but we can give way to them. If they agree, they can move a motion debate so that we can discuss the specific content of the scheme. I hope they can give me a reply afterwards. Since it seems that they do not have an opportunity to express themselves, I feel that it might be unfair to them.

If they agree that the unemployed workers at present are facing great difficulties and we want to find the quickest, the best and the most desirable way to help them (as what the Honourable Albert CHAN has said), I very much hope that they will listen to me. In fact at present, it takes a month for any unemployed worker to apply for the Comprehensive Social Security Assistance (CSSA). We would also like to tell the Honourable YUM Sin-ling that our scheme also takes one month. Our proposed period is one to two months. Actually, we have a problem and that is we are taking a lax approach. If the Democratic Party really moves a motion later concerning the specific content of the Unemployment Assistance Scheme, Members can then discuss all these questions. I think this is not a big problem, because practically the new scheme is as efficient as the CSSA. If I am being imperious, I would say that the CSSA is even less efficient than the new scheme, because the former requires an assessment of assets. Assessment is necessary. But what I suggest is a self-declaration of assets. How can any assessment be faster than a self-declared statement? What I am saying is, if Members want to go to a dead end, give tit for tat during the debate and give up the unemployment assistance that we should fight for the unemployed workers, I can also do the same. Mr Albert CHAN said, "Hey! You are now insulting the CSSA recipients. You seem to say that they have no dignity." I hope that Mr CHAN will not take unnecessary pains to go to a blind alley. I believe that many of those from the social work sector in the Democratic Party know that the Government has been criticized by the existing CSSA recipients for not giving them any dignity. Quite a number of seminars have often emphasized "leading a dignified life". That is exactly their criticism of the Government that the CSSA has not given them any dignity. Therefore, I reckon that if the Democratic Party really wish that the unemployed people in Hong Kong can have an emergency assistance scheme within a short period of time, please support me.

Honourable colleagues, I hope the Democratic Party's opposition to my motion today is not because that I am a member of the FTU or the DAB or that I am pro-China. If it is, then how can they ever justify their decision to the many unemployed people outside this Chamber who expect this motion to be adopted by this Council today?

Originally, I wanted to express other views in my speech today. As a matter of fact, in regard to the CSSA, what we have been discussing now is about increasing the amount of payment to the unemployed workers only. But what about the elderly? Will it be unfair to the elderly if we do not increase the amount of payment to them as well? I have always supported raising the CSSA payment to the level of one-third of the employees' median income. And I do not restrict this to the unemployed workers but include all the CSSA recipients. If only the unemployed workers are covered, I wonder why the elderly and some disabled people cannot receive the same amount? I would like the Democratic Party to respond to that.

Also, I want to raise a question on the rights of the unemployed workers, that is, how to protect the rights of the unemployed? Following the arguments just put forward by the Democratic Party, I should be quite disappointed. I hope that honourable colleagues can support me when casting their votes.

PRESIDENT: In order to be fair to Members, Members who have not spoken previously in the joint debate may speak now. Does any Member wish to speak?

MR LEE WING-TAT (in Cantonese): Mr President, according to Standing Orders, it seems that we did not have such a practice before. In a Motion Debate, no further debate will be allowed once the Member who moves the amendment and the mover of the motion have spoken. Kindly advise which Standing Order were you referring to when you made such an arrangement?

PRESIDENT: I have to inform Members that according to Standing Orders, although I have handled a debate on a motion with the amendments in a joint debate, Members who have not spoken in that debate have the right to claim the floor. If a Member stands up to claim the floor, I have to give the floor to him or her.

MR LEE WING-TAT (in Cantonese): Mr President, the procedures of a Sitting are very important. Should this arrangement hence become part of the procedures, perhaps each and every party would leave a lot of Members to stay until then to speak in the debate. Mr President, it is hoped that you would give a clear instruction as to whether such an arrangement should be followed in future proceedings of the sittings. Thank you.

PRESIDENT: I have ruled that this is my interpretation of the right of a Member to claim the floor in a joint debate of the motion and the amendments.

MR JAMES TO (in Cantonese): Mr President, allow me to give the Honourable CHAN Yuen-han a brief response. I hope she will not stereotype anybody, nor act on behalf of the Federation of Trade Unions or the Democratic Alliance for Betterment of Hong Kong in attaching a label to the the Democratic Party, alleging that the Democratic Party would certainly say no to the motion concerned, it would be like alleging that I will oppose her ideas simply because she is a female. Our rationale is not like that. The Democratic Party has expressed very clearly what our expectations and demands are. We think that our proposal is better, that is where our opinions differ from theirs. As to whether we should choose unemployment assistance or Comprehensive Social Security Assistance, it all depends on the substantial contents. Our colleagues have in fact explained the two plans clearly and in detail, as well as what our concept is. Never should we applaud an empty plan and then say we will wait until next time to debate on it. False labelling would do not good in our debate on a substantial question.

MR MARTIN LEE (in Cantonese): Mr President, I would like to urge the Honourable Miss CHAN Yuen-han not to worry about the partisan question. In fact, if we think that her plan proposed today is better than ours, we would not have moved an amendment at all. Frankly speaking, being the leader of our party, I, too, very much hope that all parties could work together. Now, many people would like to refer to us as the "Liberal Democratic Party". Would it not be nice if we three Parties could join hands together? As such, therefore, please do not be upset by this amendment.

DR YEUNG SUM (in Cantonese): Mr President, perhaps the Honourable Miss CHAN Yuen-han does not understand our attitude towards the Comprehensive Social Security Assistance hitherto. Just now she questioned us in a loud voice whether we were going to just help the unemployed with $2,750 and ignoring the elderly and others who are in need. With regard to this question, I think every Member here understands too well that we have all along been urging the Government to raise the basic assistance to $2,750, and not merely caring for the unemployed. This is commonly known, only Miss CHAN Yuen-han knows nothing about our demand in this respect. Even before she has been a Member of the Council, she should have learnt about the Democratic Party's demand for an increase in the rate of Comprehensive Social Security Assistance, for this is just basic knowledge of current affairs.

Moreover, she asked us to look only at the conception and not to bother about the content. I just cannot imagine how she could have asked us to make a decision in this way. How can the content be ignored? How can the spirit be separated from the body? If we were only to support the concept now and to find subsequently that the content is not acceptable to us, then we might be accused of being contradictory again. We are very prudent and we are very responsible Legislative Councillors. We will not support the concept only, for the content could make a great difference.

In addition, there is also a fundamental point which the Honourable LEE Cheuk-yan has also mentioned earlier on. In societies in general, unemployment relief is generally contributory, but the Federation of Trade Unions has not mentioned in any way about contribution this time, they only talked about tax revenue. The problem is, tax revenue and contribution are two totally different matters. I do feel it strange that they did not mention contribution when they talked about unemployment relief. They should have made more effort to study this aspect. Thank you, Mr President. 　

MR JAMES TIEN (in Cantonese): Mr President, just now you have already ruled, but still I cannot understand. Would you please reconsider it a bit? According to past practice, the Member who moves an amendment would have the last chance to speak after the debate on the motion has been concluded. However, if the new arrangement were to be followed, after the Official has spoken, the mover of the amendment has also spoken, you could still rule that those members who have not spoken could speak. If they were also to speak for seven minutes, does that mean that in the motion debates to come, after both the Officials and we Members have replied, we could still speak on the amendment for a few minutes? I request you to reconsider this issue, please.

PRESIDENT: I have to inform Members that in this case I have done some anticipatory thinking. I was considering, with the Clerk, what might happen if some Member, after Mr Fred LI formally moved his amendment, claimed that he had the right to speak if he had not spoken before. And I have come to the decision that that Member does have the right to claim the floor to speak for seven minutes.

MR EDWARD HO: A point of order.

PRESIDENT: I have ruled then. Are you challenging that? If you are challenging, please state your points, then let me collect all the points that you are making and if necessary suspend the sitting for a moment before I give you my final reply.

MR EDWARD HO (in Cantonese): Mr President, according to Standing Order 28(3), "In the Council, the mover of a motion may reply after all other Members present have had an opportunity of speaking and before the question is put". Just now the Honourable CHAN Yuen-han has made her reply, in other words, she has replied after all other Members present have had the opportunity of speaking. Unless, Mr President, you have let her reply by mistake just now, otherwise we should take it that you did believe that other Members already had the opportunity to speak. I think we should not proceed with the debate any more. Thank you, Mr President.

PRESIDENT: Mr Edward HO, would you please repeat the Standing Order?

MR EDWARD HO: Standing Order 28(3). 　

PRESIDENT: Miss CHAN will have another opportunity to make the reply. That was not her reply. That was her speech on Mr Fred LI's amendment. But since we are treating the motion and the two amendments as a joint debate, she was speaking on both amendments within five minutes which was the House Committee's recommendation.

MR RONALD ARCULLI: Mr President, I have not actually looked at Standing Orders, but I can perhaps understand that you would not make such an indication without having at least considered it in some detail. But my understanding is Members' queries this evening are essentially due to the fact that Members, at least in the last Legislative Session, were under the impression that the reason why we have a joint debate in case of amendments to a motion of more than one was to ensure that all Members would speak on the motion and any amendments. And there was no suggestion at that time that subsequent to all that Members may claim, although they have not spoken, to speak when an amendment is moved. That might not be contrary as it were to the written rules of Standing Orders, but that is certainly the convention, as I understand it, Mr President, that this Council has adopted. And I just wonder whether in your deliberations you would take that convention into account, or whether our understanding of that convention is in fact erroneous. Thank you, Mr President.

PRESIDENT: Mr Ronald ARCULLI, the arrangement for Members whether or not to speak or to claim the right to speak, is not for the President to enforce. Even if there is agreement amongst all Members that at certain times no speeches ought to be made, if a Member has as of right to speak on a question, I cannot rule him out of order. So your matter perhaps should be tackled within the House Committee.

DR PHILIP WONG: Mr President, Standing Order 25(5) reads: "When no more Members wish to speak the President or Chairman shall put the question that the amendment be made to the Council or the committee of the whole Council for its decision." It implies that before you asked Mr Fred LI to move his amendment, you assumed that no more person wished to speak. Am I right?

PRESIDENT: Dr WONG, I only asked Mr Fred LI to move the amendment. I did not put the question on the amendment. Subsequent to the moving, I proposed the question on the amendment and then invited Miss CHAN Yuen-han to speak and she had the right to speak as she had not spoken on the amendments when moving her motion. As a result, other Members who had not spoken earlier in the joint debate had the right to speak after I had proposed the question on Mr Fred LI's amendment. Shall I proceed?

MR SZETO WAH (in Cantonese): I hope that Members of the Democratic Party would not speak any more. According to our understanding, once the mover of a motion has made his/her speech in reply, no further speech should be made. In addition, since we have quite a number of Members who have not spoken earlier on, if we speak now, it would seem that we are trying to defeat others by headcount, therefore, I urge our Party Members not to speak any more.

Question on Mr Fred LI's amendment put. 　 Voice votes taken.

THE PRESIDENT said he thought the "Noes" had it. 　 Mr LEE Wing-tat claimed a division 　

PRESIDENT: Council shall proceed to a division.

PRESIDENT: Will Members please register their presence by pressing the top button in their voting units 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. Are there any queries? The result will now be displayed.

Mr Martin LEE, Mr SZETO Wah, Dr LEONG Che-hung, 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 YEUNG Sum, Mr WONG Wai-yin, Mr Andrew CHENG, Mr Anthony CHEUNG, Mr CHOY Kan-pui, Mr Albert HO, Mr LO Suk-ching, Mr SIN Chung-kai, Mr TSANG Kin-shing, Dr John TSE and Mr YUM Sin-ling voted for the amendment.

Mr Allen LEE, Mrs Selina CHOW, Mr Edward HO, Mr Ronald ARCULLI, Mrs Miriam LAU, Mr Frederick FUNG, Mr Henry TANG, Dr Philip WONG, Mr Howard YOUNG, Mr James TIEN, Mr LEE Cheuk-yan, Mr CHAN Kam-lam, Mr CHAN Wing-chan, Miss CHAN Yuen-han, Mr CHENG Yiu-tong, Mr CHEUNG Hon-chung, Mr IP Kwok-him, Mr LAU Chin-shek, Mr LEUNG Yiu-chung, Mr Bruce LIU, Mr MOK Ying-fan and Mr NGAN Kam-chuen voted against the amendment.

Mr Eric LI, Mr Ambrose LAU and Mr LEE Kai-ming abstained.

THE PRESIDENT announced that there were 22 votes for the amendment and 22 votes against it.

9.24 pm 　

PRESIDENT: I wish to suspend the sitting for a few minutes.

9.33 pm

PRESIDENT: In accordance with the relevant principle on which the casting vote is exercised, that is, Speaker Denison's decision of 1867: "That, where no further discussion is possible, decisions should not be taken except by a majority", I now exercise my casting vote in the negative. The result now is 22 votes for the amendment, 23 votes against. I declare the "Noes" have it.

PRESIDENT: Now that we have disposed of Mr LI's amendment, Mr Frederick FUNG may formally move his amendment now so that Members may take a vote on it.

MR FREDERICK FUNG's amendment to MISS CHAN YUEN-HAN's motion:

To delete "and to provide those unemployed persons who are in need of assistance with an amount" and substitute with "to provide persons who have been unemployed for more than three months with no more than six months of assistance amounting to".

MR FREDERICK FUNG (in Cantonese): Mr President, I move that Miss CHAN's motion be amended as set out under my name on the Order Paper.

Question on Mr Frederick FUNG's amendment proposed and put.

Voice votes taken.

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

Mr Frederick FUNG claimed a division. 　

PRESIDENT: Council shall proceed to a division. 　

PRESIDENT: Will Members please register their presence by pressing the top buttons in the voting units 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. Are there any queries? The result will now be displayed.

Mr Frederick FUNG, Mr CHAN Kam-lam, Mr CHAN Wing-chan, Miss CHAN Yuen-han, Mr CHENG Yiu-tong, Mr CHEUNG Hon-chung, Mr IP Kwok-him, Mr Bruce LIU, Mr LO Suk-ching, Mr MOK Ying-fan and Mr NGAN Kam-chuen voted for the amendment.

Mr Allen LEE, Mrs Selina CHOW, Mr Martin LEE, Mr SZETO Wah, Mr Edward HO, Mr Ronald ARCULLI, Mrs Miriam LAU, Dr LEONG Che-hung, 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 Philip WONG, Dr YEUNG Sum, Mr Howard YOUNG, Mr WONG Wai-yin, Mr James TIEN, Mr LEE Cheuk-yan, Mr Andrew CHENG, Mr Anthony CHEUNG, Mr CHOY Kan-pui, Mr Albert HO, Mr LAU Chin-shek, Mr Ambrose LAU, Mr LEUNG Yiu-chung, Mr SIN Chung-kai, Mr TSANG Kin-shing and Dr John TSE voted against the amendment.

Mr LEE Kai-ming and Mr YUM Sin-ling abstained.

THE PRESIDENT announced that there were 11 votes in favour of the amendment and 33 votes against it. He therefore declared that the amendment was negatived.

PRESIDENT: Now that both Mr LI's and Mr Frederick FUNG's amendments have been negatived, we are now back to the original motion.

Miss CHAN Yuen-han, you are now entitled to reply to the entire debate. You have a balance of three minutes 10 seconds out of your original 15 minutes.

MISS CHAN YUEN-HAN (in Cantonese): Mr President, after hearing the many speeches of today's debate, I have come to realize profoundly that Members who did not come from the grass-roots or who do not take the viewpoint of the grass-roots can hardly understand the present predicament and deep feeling of the grass-roots level, let alone speaking for them.

As a representative from the grass-roots, I can feel strongly that the employment problem is posing hardships for the livelihood of the working class, affecting the improvement and betterment of their quality of life. It is hard to imagine that such a prosperous society, boasting $400 billion exchange in reserve, can still have tens of thousands unemployed and underemployed workers struggling hard for a living and worrying for their unstable future. These tens of thousands jobless are members of the society who are unemployed involuntarily. They have contributed to the prosperity and progress of Hong Kong in the past through toil and mail. Today, they are down-trodden, victimized and outcast, as a result of the economic restructuring of Hong Kong and the slip in government policy. If society still pays no attention to this group of people and lets them run their own course, or refuses to provide them with reasonable protection and support for fear that they would "sit idle", I would consider it a disgrace for our society. The unemployed have their own dignity. Most of them do not want to accept charity or favour. Unless society denies them the opportunity to work, they would not easily resign their right to work and to earn their own living which they deserve. For the Hong Kong society which claims to uphold social justice, equality and human rights, the failure to protect the fundamental welfare of its workers, in terms of their right to work and to live, will leave it with no grand excuse to conceal its flagrant bullying and exploitation of the workers.

Lastly, I would like to reiterate that the Government should launch the Unemployment Assistance Scheme to relieve the pressing hardship of our unemployed workers. In view of the difficulties faced by the tens of thousands of unemployed and underemployed, I would like to ask those who claim they are standing on the side of the grassroots, and whose proposals have been negatived, to support the proposal of giving the jobless unemployment assistance for a short period to help them tide over their immediate difficulties in this last round of voting. We all understand that the present prosperity and progress of Hong Kong have been the result of hardwork of these workers behind the scene in the past years. They have contributed their golden age, toil and moil for the progress of Hong Kong. It is difficult to understand why we cannot be generous and kind enough to extend our helping hand when they are now having difficulties in making a living. Why cannot we put aside the many considerations and give them care and warmth? I hope that the colleagues in this Council will support my proposal. Thank you.

Question on Miss CHAN Yuen-han's original motion put.

Voice votes taken.

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

Mr CHAN Wing-chan claimed 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 selecting one of the three buttons below?

PRESIDENT: Before I declare the result, Members may wish to check their votes. Are there any queries? The result will now be displayed.

Mr Frederick FUNG, Mr LEE Cheuk-yan, Mr CHAN Kam-lam, Mr CHAN Wing-chan, Miss CHAN Yuen-han, Mr CHENG Yiu-tong, Mr CHEUNG Hon-chung, Mr CHOY Kan-pui, Mr IP Kwok-him, Mr LAU Chin-shek, Mr LEE Kai-ming, Mr LEUNG Yiu-chung, Mr Bruce LIU, Mr LO Suk-ching, Mr MOK Ying-fan, Mr NGAN Kam-chuen and Mr YUM Sin-ling voted for the motion.

Mr Allen LEE, Mrs Selina CHOW, Mr Martin LEE, Mr SZETO Wah, Mr Edward HO, Mr Ronald ARCULLI, Mrs Miriam LAU, Dr LEONG Che-hung, 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 Philip WONG, Dr YEUNG Sum, Mr Howard YOUNG, Mr WONG Wai-yin, Mr James TIEN, Mr Andrew CHENG, Mr Anthony CHEUNG, Mr Albert HO, Mr Ambrose LAU, Mr SIN Chung-kai, Mr TSANG Kin-shing and Dr John TSE voted against the motion.

THE PRESIDENT announced that there were 17 votes in favour of the motion and 29 votes against it. He therefore declared that the motion was negatived.

ADJOURNMENT AND NEXT SITTING

PRESIDENT: In accordance with Standing Orders I now adjourn the Council until 2.30 pm on Wednesday 29 November 1995.

Adjourned accordingly at fourteen minutes to Ten o'clock.